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- Once més que un club, now not so much: why is Barcelona stuck in a never-ending financial crisis? 💰☹️
Once més que un club, now not so much: why is Barcelona stuck in a never-ending financial crisis? 💰☹️
ISSUE 009
Julian From Plei
July 21, 2023
The Blaugrana were once the most feared club on planet earth; nowadays they are easily disposed of in the UCL. 🗑️
Their fall from grace is typically attributed to their ongoing financial crisis, struggling to retain and sign key players. 😅
This is the story of Barcelona’s economic struggles, and how it has severely impacted several aspects of the club! 👇
Lionel Messi’s departure 2 years ago marked a definitive end to an era that is inarguably Barcelona’s greatest chapter in their 100-year history.
But the decline was already underway long before the greatest player in the world had no choice but to say goodbye.
This dire financial situation that the club has found itself in has been in the works for years; Messi’s exit only brought global attention to it.
It’s quite the scenario that Barcelona is facing: once a club rooted in their long-standing identity of being more than a club and setting the example for the rest of the world in what it means to not only play beautifully but also operate beautifully, they have now become almost the complete opposite.
All while still proudly boasting that same club motto, despite their failures to live up to it recently.
Massive changes have occurred at Barcelona from the inside out. What’s more is that while the whole world is now aware of these financial struggles - with the club being the laughing stock of the football community following two group stage UCL exits in back-to-back seasons – nobody seems to know the specifics of it all.
Why exactly is Barcelona, historically one of the greatest football clubs on the planet, suddenly not able to keep up with their European rivals? And why, despite their money problems, have they still been splashing the cash on the likes of Lewandowski, Raphinha, Kounde and Vitor Roque?
🤔 Shady business?
If there’s one thing that can be said about Barcelona from a business perspective, it’s that time and time again they have proved the world wrong.
They have a history of coming out victorious in the most unlikely scenarios, and one of those moments came in 2013 with the signing of Neymar.
It was a complicated deal, and at one point, Real Madrid were close to getting his signature for a hefty fee worth $149.8 million. But eventually, the Brazilian opted for Barcelona, and the rest is history.
Controversy sprouted from this transfer, though. Reports revealed that, although Barcelona officially paid just $56.9 million, there were many undisclosed payments that helped seal the deal as well.
Barcelona’s president at the time, Sandro Rosell denied any wrongdoing in securing Neymar’s signings. The club was accused of misappropriating funds, and to avoid any further accusations and embarrassment, Rosell stepped down.
Up next in the presidency? Josep Maria Bartomeu.
🗓️ Where the economic struggles began
With MSN leading the line in a new and improved Barcelona, the club would go on to see much success.
But it’s almost as if the trophies that followed overshadowed everything that was going on behind the scenes.
Neymar’s shock departure from the club in 2017 would unintentionally send Barcelona down a rabbit hole that as of today they still have yet to climb out of. Although they would make over $242 million from their business with PSG, the club was left without their second-best player, and they had to do something about it.
With that, a new era began, and Barcelona got straight to work to look for Neymar’s replacement. They found it in Ousmane Dembele, bought for about $114.6 million. Just 5 months later, they reinforced the squad even further, signing Coutinho for over $182 million.
Over the next few seasons, many more millions were spent on other transfers, few of which were actually able to live up to their price tags. Between the money being splashed on new players and huge contract extensions being handed out to some of the club’s veteran players like Messi, Alba and Busquets, Barcelona's future financial problems were slowly sprouting.
Players like Coutinho, Andre Gomes, Yerry Mina and Lucas Digne would struggle to make a long-term impact in the team and justify their signings, and they would all eventually be shipped out for less than what they were bought for.
This is essentially the story of Barcelona during these seasons: bad recruitment and mismanagement which would ultimately lead to consistent failure in the Champions League, one of the largest avenues of revenue for European clubs.
😬 Consequences Arrive
In short, Barcelona have been spending more than they are making, way more in fact.
What’s important to understand is that the best football clubs in the world spend. There’s no debate or issue surrounding that. The whole idea behind spending money is to attain new, talented players while also retaining key pre-existing players. Ideally, these investments then lead to results on the pitch, and eventually, trophies.
The problem at Barcelona is that, with all the money they have been spending, they simply could not translate any of it into glory. Normally, after a couple lackluster seasons, any given club would naturally take a step back and perhaps play the long game of rebuilding, like Arsenal have in recent years.
But Barcelona seemingly had no time to waste.
Year after year, their wage bill continued to increase, and the COVID-19 pandemic came around to kill them off once and for all.
Countless clubs struggled during the pandemic, but perhaps none more than Barcelona. Their previous spending was starting to come back to bite and, like everyone else, they could no longer rely on income from sources like matchday sales thanks to the empty stadiums.
What they could rely on, though, was a very odd player swap with Juventus. Completely out of the blue, it was announced in late June 2020 that Barcelona would be swapping Arthur Melo for Miralem Pjanic. The transfer had absolutely nothing to do with football, it was simply a deal that would help the Blaugrana balance their books.
Barcelona paid $66 million for Pjanic, Juventus paid $80 million for Arthur.
Before the shutdown, the Catalan giants were 2 points clear at the top of the La Liga table. Unfortunately for them, Real Madrid were a revitalized team after the restart, and they went on to steal the title, finishing 5 points clear.
That 8-2 loss against Bayern to crash out of the UCL in the quarterfinals didn’t help the mood at the club, either.
📉 Record Financial Losses
Despite Barcelona convincing a number of their highest earners to cut their wages, there was growing unrest within the club, which had much to do with Messi very nearly leaving in August 2020. The fans felt it, too, and soon enough, a movement began for Bartomeu to resign from his presidency once and for all.
In a last act to save face, Bartomeu announced Barcelona’s commitment to a nonexistent Super League, citing that the competition would help the club’s finances. And then he resigned.
Barcelona were left without a president for much of the 2020-21 season, until former president Joan Laporta took over to begin his second tenure.
It seemed like healing would finally begin at the club, and Laporta even went as far as promising fans that Messi would extend his contract, due to expire in the summer of 2021.
But they simply did not financially recover in time, and the Argentine had no choice but to leave.
In the same year, they calculated losses of $617 million, the worst ever recorded by a football club. Their total debt last year was even worse; over $1.3 billion.
🤑 Levers to the rescue!
What was slowly building up over a span of 4-5 years had now reached a new low. Barcelona were officially in a crisis.
But someway, somehow, they managed to sign the likes of Robert Lewandowski, Raphinha and Jules Kounde last year.
This is where the ‘lever-pulling’ comes into play. In simple terms, an economic lever is a means of making quick money by selling away assets in order to alleviate financial pressures.
Laporta activated quite a few of these levers last summer, which saw them gain enough funds to make these signings.
In total, over $700 million has been raised by selling off club assets like TV rights and parts of their production and licensing businesses. A new deal with Spotify to put the music streaming service’s logo on their kits as well as renaming their stadium to “Spotify Camp Nou” have also been crucial.
⏳ New Chapter Approaching
While Barcelona’s financial struggles continue as the 2023-24 season approaches, it’s fair to say that they’re somewhat in an improved state.
But we can’t help but feel that they could have already been out of this crisis had they played the long game and resolved their finances more organically. Sacrifice that hunger for rapid success, and rebuild from the ground up, prioritizing La Masia and giving Xavi more control of the growth and restoration of the club’s identity.
For now, Barcelona has some ways to go. Although it has been at the expense of their reputation, it seems like they’ll climb their way out of debt. Whether they fully return to their old ways of beautiful football and living up to their ‘Mes Que Un Club’ motto remains to be seen.
One thing’s for sure, though: sooner or later, Barcelona will be back.