It has been a tough few weeks for everyone at Barcelona. Elimination from the Champions League quarter-finals by Paris Saint-Germain was followed by a Clasico defeat to Real Madrid that ended any realistic chance of retaining their La Liga title.
The focus quickly turned towards planning for next season, particularly after head coach Xavi reversed his decision to leave this summer.
“It’s time to plan and we’ll keep talking with (sporting director) Deco and the president (Joan Laporta),” Xavi said after the 4-2 defeat to Girona this month that handed Madrid the title. “We’ll see what we want to do and we’re able to do.”
The backdrop was Catalan press speculation about possible moves for players such as Bayern Munich’s Joshua Kimmich, Manchester City’s Bernardo Silva, Nico Williams of Athletic Bilbao and former La Masia talent Xavi Simons, now at PSG.
Barca’s financial issues and their potential difficulties loom large, and discussions with La Liga and UEFA are on the agenda.
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In recent years, many around Barca have become used to that contrast — knowing the club is battling debts of more than €1billion ($1bn; £859m) and financing a €1.5bn redevelopment of the Camp Nou but feeling the need to spend to compete for the biggest trophies.
Laporta’s creative financial policies, including the ‘levers’ of summer 2022 — when Barca sold off chunks of future revenue to companies in exchange for instant income — have succeeded in staving off the serious consequences of that historic debt.
But more decisions are due over the coming weeks, which could lead to repercussions. La Liga rules mean Barca must fill a €130m hole in their accounts for this season by the end of June if they are to bring in any new players this summer — even on free transfers or loans.
Barca face difficulties in adding to their squad this summer (Joan Valls/Urbanandsport/NurPhoto via Getty Images)
Last summer, La Liga lowered Barca’s official permitted salary limit from €648m in 2022-23 to a new figure of €270m for this campaign.
Barca’s real squad cost for 2023-24 — the total of salaries and transfer amortisations — is officially budgeted at €492m.
The difference in these figures is down to those ‘levers’, which raised hundreds of millions of euros by selling off assets, such as TV revenues and parts of its non-football business activities, but left the club with liabilities in the future.
After La Liga clubs voted to change their rules in November 2022, most such once-off ‘lever’ money could not be counted in salary limit calculations.
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Soon after the January transfer window shut, La Liga publicly confirmed that Barca’s permitted salary limit had fallen further — to €204m.
This was due to a shortfall of €40m in Barca’s budget for this year, after the non-payment of money expected from German company Libero for a share in the Barca Media scheme was announced in August 2023.
Barca say they have taken legal action against Libero through the German court system to force payment of this €40m. Club executives are actively looking for other investors to assume Libero’s share of the Barca Media spin-off, which the club initially claimed would be floated on the NASDAQ stock exchange in New York with a $1bn valuation in November 2023.
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Mountain&Co, the Swiss financier that is Barca’s partner in the scheme, has twice postponed the closing date of the ‘SPAC’ (special purpose acquisition company), which is now November 2024.
No significant progress has been made either in forcing Libero to pay or finding someone else to pay, according to sources who have been involved in the scheme — who, like all spoken to for this article, requested anonymity so they could speak more openly.
Another deadline looming is June 30 — when crypto company Socios and production company Orpheus were each due to pay Barca another €30m under the initial Barca Studios lever deal in summer 2022. That combined €60m was factored into La Liga’s salary cap calculations for the 2023-24 budget.
Barca say they are still expecting this €60m to arrive — whether from the original partners (Socios and Orpheus) or from another company who could take over the commitment and gain a share of the Barca Media spin-off.
Laporta has put on a confident face in public (Josep Lago/AFP via Getty Images)
There is confidence that the ‘outstanding’ €40m from Libero last summer will be recouped by the end of June, when the club’s financial year ends.
Mountain&Co, Libero, Socios and Orpheus all declined approaches for comment. Other industry sources with close knowledge of the situation see difficulties in finding anybody to pay this €100m — given how the Barca Media SPAC deal has struggled.
The potential — or likely — €100m gap in Barca’s 2022-23 accounts is before including a further €30m shortfall due to lower-than-expected revenues for the season, mainly due to poor matchday income from their temporary home ground, the Estadi Olimpic Lluis Companys — where the average attendance of 40,067 this term is less than half of last season’s 83,498 at the Camp Nou.
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Costs for the Camp Nou renovation project stand at €900m. Barca have said they plan to return in time for their 125th anniversary in November at two-thirds capacity, although Laporta has said this will be in December.
Barca have to find approximately €130m to fix holes in their accounts for this season — which La Liga say they must do before they can add any new players.
Laporta has still spoken confidently about the possibility of signing players, while insisting his club will “break even” for La Liga and be allowed to spend all extra revenues they generate on improving the squad (known as the 1:1 rule in Spain, referring to the ratio).
“We’re working to achieve the 1:1 rule to sign new players,” Laporta said in April. “La Liga has told us we are on the right path.”
There is nothing unusual in Barca and La Liga discussing such situations — talks are taking place between league staff and all 42 first and second-division clubs about their budgets and salary limits for next season.
La Liga president Javier Tebas is always clear that rules must be followed, but executives at other clubs have complained about Barca’s apparent leeway.
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Still, barring an unlikely arrival of significant money owed from its Barca Studios ‘lever’, the only way for them to have any budget for signings this summer would be to raise significant money in player sales between now and the end of June.
La Liga is not the only organisation keeping a close eye on Barcelona’s financial dealings — UEFA is monitoring those with the club’s licence to play in next season’s Champions League up for decision in the coming weeks.
Last July, European football’s governing body found Barca guilty of “wrongly reporting, in the financial year 2021-22, profits on disposal of intangible assets (other than player transfers), which are not a relevant income under the regulations”.
This was UEFA’s club financial control body (CFCB) disagreeing with Barca’s inclusion of €267m raised by selling 10 per cent of future La Liga TV rights to investment firm Sixth Street in that financial period. By the CFCB’s reckoning, Barca’s accounts should have shown a significant loss — and it imposed a €500,000 punishment.
Barca appealed that decision but in November, the body’s appeals chamber confirmed the punishment.
This precedent should be of great concern to Barca, as their 2022-23 accounts have included even more money from two further levers. These are the €400m deal with Sixth Street (later in summer 2022) and the €200m booked from Socios and Orpheus for 49 per cent of Barca Studios.
Including this €600m as ‘revenue’ means Barca could claim a net profit of €304m for that 12-month period, even though they have yet to receive most of the Barca Studios money.
Financial levers have helped Barca sign players including Lewandowski (Alex Caparros/Getty Images)
The 2022-23 accounts included a further ‘asset’ of €208m — a valuation of the remaining 51 per cent stake, based on the price agreed with Orpheus and Socios in summer 2022 (even though, again, most of that money has not been paid).
“We could call it financial engineering, but it’s nothing more than applying the accounting plan,” Barca’s then-financial vice president Eduard Romeu told club socios, or members, who queried this way of putting together their accounts before last autumn’s Barca AGM.
Romeu resigned from his position in March, with Barca saying it was due to his other professional commitments. But a source close to him told The Athletic Barca’s continuing financial problems motivated him to leave.
UEFA has tweaked its financial sustainability and licensing rules before 2023-24, but the ban on including profits made on disposal of intangible assets in club’s profit and loss calculations has been maintained. These calculations are done over a three-year period and only allow for losses of €60m (up from €30m) over that time.
It looks inevitable that UEFA’s financial control body will again find Barca in breach — given they again need to use ‘lever’ income not to show more substantial losses. Indeed, without counting the €867m ‘levers’ money, Barca’s losses for 2022-23 are almost certain to be the largest by any European club ever.
CFCB rules say that committing a similar offence within three years of a past offence counts as an “aggravating circumstance” and merits a more serious punishment.
There are precedents of serious sanctions for clubs who breach UEFA’s financial fair play rules. Manchester City were banned for two seasons in 2020 but overturned that at the Court of Arbitration for Sport. Juventus accepted their punishment after negotiations and were not able to take their place in the Europa Conference League this season.
Barca’s difficult relationship with UEFA — they continue to promote the European Super League — does not make it easier to find resolutions.
In December, a report in Germany said that Barca’s likely offence was so serious that it could mean exclusion from next season’s Champions League. UEFA told The Athletic that no decisions on this are made until after this campaign. Barca say they are not concerned about what calls may be made.
Barcelona have known about their financial problems for years but have continued to live beyond their means.
Their wage bill continues to be among the highest in world sport, even after the departures of stars Lionel Messi, Gerard Pique and Sergio Busquets. They have used the money from those recent levers to make signings such as Robert Lewandowski and Raphinha in 2022 or bring in players on hefty salaries including Ilkay Gundogan, Joao Cancelo and Joao Felix last summer.
The club have been working on traditional ways to grow their revenues. The dispute with kit supplier Nike was aimed at increasing income. They have added new sponsors such as Crypto company WhiteBit and extended their partnership with car maker Cupra until 2029. Extra VIP and merchandising opportunities will bring a significant leap in matchday revenues when the Camp Nou is completed.
But their financial planning keeps hitting obstacles — they had budgeted a cost of €87m for playing at the Lluis Companys, but the hit will be even greater due to lower-than-expected attendance figures. A place in the 2025 FIFA Club World Cup in the United States could have been worth €50m, but their Champions League exit meant they missed out. The focus over the last few weeks of this season has been on finishing ahead of Girona in second place and qualifying for next year’s Supercopa de Espana (Spain’s version of the Community Shield in England, which would be worth at least €6m to Barca).
Pushing the Barca Media SPAC deadline as far as November has given the board breathing space — but the issue is not over.
Were the scheme to fail completely, the SPAC’s €400m valuation in the accounts would have to be written off. Even if Barca come up with a replacement, it would be unlikely to have the same valuation.
This would have further consequences for their salary limit in 2024-25 and their UEFA calculations before the 2025-26 European campaign. Barca sources say such far-off consequences are not under consideration, as their focus is on finding investors to do the deal as initially announced.
Barca’s Champions League exit meant they missed out on the Club World Cup (Adria Puig/Anadolu via Getty Images)
In the meantime, Barca are back doing what most clubs — sooner or later — do when they find themselves in financial difficulties.
“We’ve received offers for (Frenkie) De Jong, Fermin (Lopez), (Alejandro) Balde, Gavi, Pedri and (Ronald) Araujo, but we don’t want to sell,” Laporta said in March. “With those names, we could get close to €1bn. That would fix the club’s finances but ruin our sporting project.”
Even recent signings face an uncertain future.
Vitor Roque signed from Athletico Paranaense for an initial €30m, with €31m due in potential bonuses, in January and was registered with La Liga as an emergency replacement for long-term injury absentee Gavi. But the 19-year-old striker will be automatically ‘unregistered’ on June 30 and cannot be ‘re-registered’ until more space is freed up. The salary he was paid while sitting mostly on the bench in recent months has been subtracted by La Liga from the total available for 2024-25.
It looks clear that some players will leave in the summer, with the centre-back Araujo the most likely to bring in significant money. Catalan reports have suggested Barca would look for €100m for Araujo and the website Transfermarkt values him at €70m.
There are doubts over other big earners, including De Jong, Lewandowski, Raphinha and goalkeeper Marc-Andre ter Stegen. Much of the money from any sales will be swallowed up by the holes in the club’s accounts — meaning a likely dip in the team Xavi coaches next season. The biggest fear for Barca fans is that bids for youngsters such as Lamine Yamal would be impossible to turn down.
June 30 and the closing of the 2023-24 accounts should be the next big date circled in all Barca fans’ calendars.
The pain of missing out on La Liga to Madrid and bowing out of the last eight of the Champions League could soon be dwarfed by the future hurt the club faces.
(Top photo: David Ramos/Getty Images)
