The latest period has been exceptionally turbulent both on and off the pitch for the mighty FC Barcelona. In late 2020, the now former president of FC Barcelona, Josep Bartomeu, resigned after a six-year reign, and Joan Laporta was appointed as president and the person in charge of getting the club out of the most critical financial situation in its history.
Barcelona president Joan Laporta has agreed that the club is currently in the rebuilding phase following the departures of Lionel Messi and Antoine Griezmann this summer. Due to the financial crisis, the Catalan giants were not able to offer Messi a new deal which resulted in him joining Paris Saint-Germain on a free transfer.
Joan Laporta, Barcelona’s president, explained in August 2021 that the club’s debt was €1.35bn. It was this level of debt that forced the Catalans to let the best player in its history, Lionel Messi, tearfully walk out the door. For free.
Barcelona was forced to reduce its salary commitments by La Liga to ensure the safety of the club. Even playing for free wasn’t an option for Messi as Barcelona had to shed even more from its wage bill. No player is ever bigger than their club and never has that sentiment been more true than at Barcelona.
That financial mess led to plenty of confusion surrounding Barcelona’s playing squad at the beginning of the 2021/2022 season.
Barcelona continued signing players despite not having the room in the salary cap. Key signings like Memphis Depay were left sweating over their place on the roster. Eventually, senior players were asked to take pay cuts to allow the club to register new players.
- Financial Situation
Barcelona’s situation is exactly the sort of thing the Spanish league authority was trying to prevent. However, fingers have been pointed at La Liga for the lack of flexibility and understanding given the downturn in revenue due to Covid. Key figures on the Barcelona board wanted the rules to be relaxed for the 2021/2022 season but La Liga wasn’t having any of it.
In hindsight, the summer of 2020 was a warning sign that the Barca board should have heeded. Barcelona was forced to release or sell several players to balance the books, including gifting Luis Suarez to Atletico for peanuts. Suarez’s transfer stung Barca even more after the striker helped Atletico win La Liga with 21 goals.
- Financial Statements
Despite high levels of expenditure, Barcelona’s spending has, in part, been justified by revenue. Barcelona has hauled in serious commercial revenue allowing the Catalan club to spend big. Financial mismanagement has put the club in danger from a previously stable situation.
|Year||Revenue €m||Expenditure €m|
- Why Barcelona Got Into Debt?
Barcelona’s debt was caused by overspending on wages and transfer fees. Lionel Messi’s final €555m contract cost approximately €139m per season. That wage plus the other expensive contracts meant Barcelona was spending more than it was earning. With so much money going out, the debt kept racking up.
|Year||Gross Debt €m|
This data indicates things were going well for Barcelona until its revenue began to dry up in 2019. While the revenue loss is largely due to the pandemic, there is no doubt that overspending on wages has contributed to the situation.
- Road To Recovery
Looking forward, Barcelona said it will present a budget for the 2021-22 season with €765m of income, 21 per cent higher than last season. The increase is mainly due to the recovery of income from the stadium thanks to the reopening of the club’s facilities, and particularly matches at Camp Nou, where a progressive return to full capacity is planned. The other area contributing the increase is commercial due to the reopening of retail facilities.
Along with the shock exit of Lionel Messi to Paris Saint-Germain, this summer has also seen the likes of Antoine Griezmann depart to former club Atlético de Madrid. Barcelona said it expects to end the 2021-22 financial year by posting a profit after tax of around €5m.