An insight into the financial chaos happening at FC Barcelona this summer

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FC Barcelona’s president Joan Laporta has revealed the club are in €1.35 billion worth of debt and pinned the root of the problem on the old regime under Josep Maria Bartomeu. 

It is no secret that Barcelona find themselves in the worst financial position which they have ever been in, as years of neglecting how much they spend on transfer fees, player wages and staff have all caught up with them.

Add the constraints of the pandemic to that and you have a recipe for disaster, one so significant that it could shape the future of the Spanish outfit for some time. The bottom line is that the Blaugrana are in desperate need of money, with many reporting that the damage runs so deep that the club are technically bankrupt.

From the outside looking in, player sales may seem like the logical way to generate funds and navigate their way out of these troublesome circumstances, but it’s easier said than done. As we’ve seen with other clubs in this transfer window, it can prove taxing to trim the deadwood within the squad, especially when they are unwilling to take a pay cut in order to be moved on.

Letting the wage structure become so disproportionated is one of the defining factors to why they find themselves where they are, and is one of the decisions which they are quickly scrambling to fix, with many of their key players being forced to reduce their weekly salary if they wish to register new signings.

No matter how bleak the reality is for Barcelona, one man who seems set on turning their fortunes around is newly appointed president Laporta. The 59-year-old is amidst his second stint in this role at the club and will need to harvest all of his experience to ensure the long-term future is stable.

So what is actually going on in Catalonia?

From losing their best-ever player on a free transfer to being unable to register new signings, this week has perhaps been one of the most challenging in the club’s history. Laporta was the first to recognise this in his latest press conference on Monday evening, in which he outlined not only the reasons behind the mess but how he plans on fixing it.

“Our salaries represent 103 per cent of the club’s total income. That’s 20-25 per cent more than our competitors. The first thing we had to do when we arrived was to ask for a loan of €80m because otherwise, we could not pay the salaries. The previous regime was full of lies.

“We found the wage policy in the form of an inverted pyramid – veterans on long contracts and youngsters on short deal. There were no wages cuts – lies.

“Barcelona has a negative net worth of €451m – it is a terrible inheritance. What has been happening is very worrying.

“Bartomeu’s (open) letter is an effort to justify management that is unjustifiable. It is an exercise in desperation. They are responsible for everything until March 7. They will not escape their doing.

“The situation is dramatic, but we have good news,” said Laporta. “The strategic plan based on our credibility and experience, on the assets that Barca have, makes this situation temporary. I think that in a couple of years, the club’s economy will be healthy.”

The Spaniard also pointed to the old regime for making sizeable payments to intermediaries, some of which weren’t even player agents, and perhaps the most worrying of all was a scout receiving an €8 million a year salary to track talent in South America.

It’s no wonder that the severity of the situation has reached this point, as the clear disregard shown by the club’s hierarchy over the past decade has been apparent, which ultimately led to them paying the price when it comes to Lionel Messi.

Having committed his whole career to Barcelona, the 34-year-old was willing to do it all again, but this time with a reduced salary of 50%. The contract was all signed and ready to be processed, however, his boyhood club were unable to register him, due to their wage bill not complying with La Liga’s rules.

It was a cruel ending for their greatest ever player, arguably the greatest to ever play the game, and signified just how much trouble they are actually in.

Although the decision was partly out of his hands, Laporta showed that he only had the best interests of Barcelona at heart as trying to shoehorn Messi into the current wage structure would only plunge them into further financial difficulty, and it will take many more tough decisions like this to get them back to where they once were.

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Amidst the chaos surrounding Messi’s transfer to Paris Saint-Germain, is the repercussions with their new signing Sergio Aguero. The former Manchester City man revealed his main desire to make the move to the Camp Nou this summer was to play alongside his compatriot, but with that out of the question, his relationship with the club is already thrown into doubt.

Another unsolved enigma heading into the final few weeks of the transfer window is the future of Philippe Coutinho, whose €19 million a year contract is a big part of why Barcelona’s wage bill is the highest in world football at €442 million. His time in Catalonia has been far from smooth, having gone out on loan since his move from Liverpool, while also struggling with multiple injuries it means potential suitors are few and far between.

The Brazilian isn’t the only first-team star with an uncertain future with the likes of Ousmane Dembele, Antione Griezmann and Miralem Pjanic all deemed surplus to requirements if the correct bid comes in. So far, any deals for these players are yet to materialise and it looks unlikely that the situation will change between now and the end of the transfer window.

Away from the struggles of shifting unwanted players, one of the factors which have been a big contributor to the chaos is spending too freely, especially after the sale of Neymar to PSG in a record transfer fee of €222 million. After such a big loss, naturally, the club felt as if they needed to bring in several marquee signings to fill the void, but looking back this turned out to be the root cause of their financial trouble.

By the end of that summer, they had already spent the whole fee which they received for Neymar, with the majority going on Coutinho and Dembele. As a result of this and making other signings, Barcelona still owe €174 million in instalment fees for previously completed deals, some of which have already been and gone from the club.

Undoubtedly, this has a knock-on effect on other factors, putting their plans to build a new stadium on hold in the meantime. The idea was to renovate their already iconic stadium, to not only increase the capacity but to give it some much-needed maintenance.

So with the amount of work Barcelona need to do within the next couple of years to change the fortunes of the club going forward, will Laporta be the man to do so?

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