Distribution of payments, sale of assets, contract with Spotify … With a debt of 1.35 billion euros a year ago, FC Barcelona has reversed the situation and, given the summer transfer window, has become one of the largest, especially through recruitment by Raphinha and Robert Lewandowski.
In March 2021, the club was “in an accounting insolvency situation,” with horrendous debt, liquidity problems and a huge wage bill, according to then-Barça boss Ferran Reverter, who resigned in February.
Barça today extended Ousmane Dembélé by two years, Franck Kessié (AC Milan) and Andreas Christensen (Chelsea) on a free transfer and signed Raphinha (Leeds) for 70 million euros, not to mention Lewandowski (Bayern Munich) for 50 million euros.
However, with 25.5 million euros reported by departures versus approximately 120 million spent on recruits, the balance is negative 94.5 million, a problem initially alleviated by the distribution of the debt.
Barca’s biggest problem wasn’t so much the debt as its urgency: they had to repay it before June 30, 2021. But Joan Laporta, elected president four months earlier, and his management team were negotiating with their creditors to settle that debt over several years, a way to save time.
But part of it is not scalable, Barça had to take out a new loan of 595 million euros from another bank, Goldman Sachs.
Contract with Spotify
The loan, arranged with Goldman Sachs, also allowed FC Barcelona to have cash to take care of the club’s day-to-day operations, such as Torres (Manchester City) for 55 million euros.
But in order to make even more money quickly, the Catalan giant has started selling shares of its fortune.
The club sold 10% of the revenue from the TV rights of the Spanish championship for 25 years to the American company Sixth Street in exchange for an immediate €207 million. And the five-time Champions League winner wants to part with another fifteen percent for 330 million euros.
The sale of 49.9% stake in Barça’s Licensing and Merchandising franchise, approved by the Sozios (supporter shareholders) in mid-June, could also pay off for several months.
Finally, the sponsorship deal agreed with Spotify, which includes in particular the “baptism” of the future renovated Camp Nou, should bring in around 435 million euros for Barça. This is the largest sponsorship deal in the club’s history.
A stormy rush?
Thanks to these new cash inflows coupled with a drop in payroll, the Catalan club are hoping to raise their salary cap to be able to register their new recruits in La Liga. Because at the moment Kessié, Christensen, Raphinha and Lewandowski can’t play an official match in the Blaugrana kit.
But by selling assets over long periods of time for a large sum of money upfront, Barca bury the dust under the rug and only push the problem away. The club is banking on the post-Covid-19 economic recovery and future earnings from its new stadium to repay its creditors: its debt, the Goldman Sachs loan, the agreement with Sixth Street…
But also the loan of 1.5 billion euros granted for the renovation of the Camp Nou. A loan to be repaid in 30 years, using only the excess revenue from running the new stadium.
Barça is following a trend with the sale of its assets: in Spain, for example, 17 La Liga clubs have reached an agreement with the CVC investment fund and Real Madrid have sold 20% of the operating income of their future Bernabéu stadium on Sixth Street in exchange for 360 Million Euros.
In addition, FC Barcelona is still one of the top-selling clubs in the world (582 million euros according to Deloitte in January 2022). Your ability to take on debt is therefore given.
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