Bankrupt Barça: How has the club been able to raise money to sign new players?
Barcelona have been very active so far in the summer window, but how have they managed to get cash to sign?
It’s that time of the year when soccer fans are looking forward to having their teams back in action, especially if those clubs have acquired big names or have built competitive squads.
Many would have expected to see clubs like Real Madrid, Manchester City or Manchester United doing the big business this summer, grabbing the headlines with big names, but against all odds, most of the attention has been on FC Barcelona.
The Catalan giants have signed five players so far, and most of them are no strangers to fans: Andreas Christensen, Franck Kessié, Raphinha, Robert Lewandowski, and Jules Koundé.
How can Barcelona sign players if they are bankrupt?
“We will move out of intensive care into a ward where we can receive more treatment, and soon leave the hospital,” said Barcelona president Joan Laporta at the beginning of the summer.
What did he mean by saying that? In other words, his plan to slowly get back to recovery was linked to a ‘levers’ solution that would send immediate cash to the club for investment in new players for this season.
To make it possible, the club activated the so-called first “lever” by selling a 10 per cent share of the club’s future TV rights to the American investment company Sixth Street for the next 25 years.
In order to have money enough to bring big names to Camp Nou and free up their LaLiga salary limits, Laporta agreed to sell another 15 per cent of their future television rights to the same company in the second economic lever.
Barcelona piled up around €522million through TV rights sales, with Sixth Street getting 25 per cent of Barcelona’s TV income as members of LaLiga.
Third lever activated to allow player registrations in LaLiga
To make sure all the new signings will be registered in LaLiga, Barcelona just activated their economic third lever, which was required in order for the club to be able to register its five signings, by selling a percentage of Barça Studios to the cryptocurrency platform Socios.com.
“An agreement has been reached for the sale of 25 percent of Barca Studios for €100 million. We have authorization from the assembly for 49 percent and we have done 25 percent with Socios.com,” said Laporta.
After the three levers, Barcelona got a sizeable amount of money that will certainly help the club get back in contention for titles, but the Catalan club have little margin for error now and can’t afford to spend €522million as they did with Coutinho, Griezmann, Dembélé, De Jong and Malcolm in the past.
Despite accumulating revenue this summer, Barcelona are losing potential sources of income for the future.
It was reported in Spain that the sale of the 25 per cent portion of their TV rights could mean a €40million negative impact on next season’s balance, but Barcelona chiefs hope to find alternative sources of revenue by boosting their commercial appeal if they get the expected on-field results soon.
Before the third lever arrived, the priority for the Blaugrana was to find a solution for the LaLiga wage limits. Depending on the club’s reported budget, they are assigned a certain limit to register the gross salaries and the possible amortization quota of the entire squad in the course of a season. The figure is obtained by subtracting the costs and debt from the club’s income.
In case a club goes over the limit, it’s restricted with its possibilities of signing new players. To make it possible, the institution has to find new sources of ‘extraordinary income’ through sponsorships, investment funds, or offloading players that take up space in the wage bill.
Not following the rule could see LaLiga impose multiple fines, or relegate the club to a lower division.
Making more cash by selling players
Players such as Neto, Samuel Umtiti, Riqui Puig, and Martin Braithwaite were not included in the pre-season tour of the United States. The club asked them to consider other offers as they will not have a guaranteed spot in coach Xavi’s squad for the upcoming campaign.
Memphis Depay and Frenkie de Jong are two of the players that were present on the US tour but they are expected to leave the club. Barcelona would be happy to sell the Dutchman to Manchester United, especially knowing the transfer could offer the Catalans around €70-80 million.