Even European super powers like FC Barcelona have not been immune to the effects of COVID and its restrictions on crowds amidst the pandemic. The Spanish soccer factory, with a record 75 domestic titles to its name, has just finalized a loan from an American investment firm so they can repay wages owed to players since January.
The €100M loan is just the latest financial setback which has resulted in the club’s gross debt to soar to an astronomical €1.2B. Since lockdowns began, Barcelona players have agreed to a variety of pay cuts, and deferrals in an attempt to help keep the club financially solvent. Yet even with the players’ sacrifices, the club has continued to struggle to keep up with its financial obligations.
Newly elected club president Joan Laporta immediately ordered an internal audit of the clubs finances when he assumed the role in March. Roughly €365M is currently owed to banks and amortization fees by the end of June, with insiders having genuine concern that the club may not be able to meet deadlines.
Which is why FC Barcelona’s enthusiasm for the breakaway Super League (which ultimately failed to gain traction) suddenly makes so much sense. Various reports suggest Barca was set to receive a cash injection of approximately €350M for its participation in the league. A figure which would go a long way towards helping a currently cash strapped organization.
It also sheds some light on why Argentine superstar Lionel Messi abruptly announced that he wanted out of Barcelona in August of last year. Many pointed towards Barca’s lack of on field success (it was the first time the club failed to win a trophy since 2007) as the cause of Messi’s discontent. However with the club’s financial peril now coming to the public’s attention, perhaps there was more to the story than the average fan was aware of at the time.
Laporta is currently mulling over a variety of options to generate positive cash flow for the organization, with everything from naming rights, to outright sales of facilities on the table. While FC Barcelona would love to avoid shedding salary in the form of letting big name players go in the offseason, one has to wonder which roster spots may suddenly open up as casualties of the financial situation they find themselves in.
So while the recent loan may buy the Spanish behemoth some time in the short term, at some point some tough decisions are going to have to be made. And when you’re talking about figures in the billions when it comes to debt, everything and everyone is going to be on the table for discussion. Even generational talents like Lionel Messi.
-Kyle Skinner
Twitter: @JKyleSkinner