EXPLAINER

Is there hope for Barcelona's 'Sapa' chronicles?

The Catalan club has been a shadow of its former self, but might have had a temporary route out of the 'trenches' after all

Is there exactly a way out of Barcelona's financial hurdles?

By now it’s certainly no secret that the current state of things at Barcelona is far from good-looking or stable.

A house in utter financial disarray was met by new president Joan Laporta after the previous board, led by Josep Maria Bartomeu, managed to build an infamous reputation of flexing the club's funds like a 'directionless charity organization', leaving the former with too much to do.

Even Laporta admitted his shock on his return to lead the club, with the club neck-deep in the most disastrous financial situation in its history.

Apart from Bartomeu's reckless spending, the former president was also involved in questionable transfers, as well as a series of social media slander campaigns against the club's own players.

Not to mention his abject neglect of Barca's academy players, and poor managerial hires, just to mention but a few.

However, Barca fans need to realize that the issues that president Laporta is desperately trying to resolve to this day, are the economic consequences of the Bartomeu-led administration.

'You don't know the exact economic numbers until you take over the club.'

'We knew it was bad, but not this bad. Salaries were deferred back then.'

'And we're not talking about normal ones. We're talking about extremely high salaries that we cannot pay anymore.' , Laporta admitted last month.

Suffice to say Barca wasted a lot of money on players that they didn’t need, nor weren't the right fit to reach the highest of levels at the Camp Nou.

Not only through their ridiculous transfer fees, but also long-term contracts with absolutely disproportionate salaries.

Bartomeu actually gave out salaries like there was some secret well of money that never stopped flowing, whether or not the player was deserving of the numbers or not.

In short, many players in other clubs would have been fasting for months praying and hoping to get a call from Bartomeu, if they knew about the 'mammoth wages giveaway' ongoing under his leadership.

Although new sporting director - Mateu Alemany, has been trying to offload players for the better part of a year, it has proved far from being an easy an task with some players refusing to leave and reportedly determined to prove themselves at the club, while buyers for the others are seemingly hard to come by of recent.

Alemany has also made efforts to lower the salary bill with the club managing to sell off Brazilian star Philippe Coutinho to Premier League side Aston Villa for €20 million, and also loaning out rrench attacker Antoine Griezmann to La Liga rivals Atletico Madrid, with a mandatory option to buy for €40 million.

Coutinho's sale must've no doubt hurt the club as well as Barca fans as he was sold for over £100 million less than the total fee the club paid to prize him away from Liverpool in 2018.

This duo were the two highest-earning members of the squad after Lionel Messi's shock exit in 2021 and failed to live up to the fee that was paid to acquire them in the first place.

Other Bartomeu signings like Martin Braithwaite, Samuel Umtiti, Miralem Pjanic, Neto, all have long-term contracts with high salaries that seem to currently turn off any team that would ever be interested in their services.

Even with the departure of players with hefty salaries, Barça’s La Liga financial fair play salary limit was set at a ridiculous €98m at the start of the season.

Compared to their eternal rivals - Real Madrid’s €739m limit, just a clear picture of how terrible Barcelona’s accounts have been in the last four years.

However, it even got worse last season for the Blaugrana.

Champions League qualification was in serious danger, with the the club struggling to catch a break in the league.

Barca was forced had to make 4 winter signings to ensure the team’s competitiveness and that the Catalans didn't embarrass themselves and miss out on the apex European club football showpiece next season under new manager and club legend Xavi.

However, it wasn't as simple as acquiring players for free or an a cheap, as Barca were unable to initially register these players as their arrivals meant the salary cap limit would no doubt be exceeded with La Liga reporting that Barcelona were the only Spanish club with a negative salary limit.

Regardless, the new year arrivals proved successful with the Catalan giants finishing second in the league, even though they were miles off eventual league champions Real Madrid on points differential.

Amidst Barca's economic saga, Laporta dropped a shocking revelation upon his return to the presidency, that the club was currently running on a loss of €481 million.

However, what fans couldn't understand was how the previous season, Barcelona under Bartomeu, reported losses of about €97 million following the COVID pandemic in 2020.

With salaries still on the rise, and a full season with COVID protocols and closed stadiums in football, the Blaugrana couldn't generate enough revenue to balance their books.

Barcelona had also sent account closure report to La Liga on the 30th of June 2021 confirming that the club had also completely depreciated the net book values of their players including Philippe Coutinho, Matheus Fernandes, Umtiti, Pjanic and Neto.

Over the past couple of months, president Laporta has consistently brought up a phrase to the media that has left people anxious to know how exactly Barcelona will salvage something from its precarious state.

Laporta has always referred to Barcelona as being ready to pull ‘economic levers’ that would guarantee short-term income.

These 'levers' will solve the club’s Financial Fair Play limitations for next season.

What this means is that, Barcelona can actually make big-money moves through the sale of some of the club’s valuable assets.

Barca's board of directors have been and are still in conversations with multiple companies for quite some time,.

The Catalans hope to seal a deal involving partial sales of ‘Barça Studios’, ‘Barça Licensing & Merchandising’ (BLM), and a percentage of the club’s audiovisual rights for the coming years.

Funny enough, this proposed move was authored by Laporta's predecessor as the ‘Barça Corporate’ project in 2015, despite his messed-up reputation.

The project reportedly turned out to be successful following its launch in 2020.

Barca's previous administration also reportedly considered selling 49% of the entire Barça Corporate setup for around €100m, matching their valuation.

However, the current board under Laporta are currently looking to complete a much more beneficial deal in the coming weeks even as Catalan publications, continue to claim Barca can close the deal in time to balance their books as well as fund their transfer budget.

According to reports, 49% of BLM alone, the division that manages the commercialization and licenses for the club’s official products, is set to bring around €320m in total income.

‘Fanatics’ and ‘Invest Industrial’ will reportedly pay a combined €200m for a percentage, while the other €120m is still being negotiated with other large companies in that sector as per Barca Universal.

Unlike the sale of Barca Studios, this sale, will have to be approved by the club’s members in the next general assembly coming up this June - this week precisely.

The club hopes to close a similar deal for the partial sale of Barça Studios, which was already approved by the assembly in October 2021.

It's also in Barcelona's interests to complete the sale of these assets before the end of June.

Reporting the proceeds from the sale as ‘extraordinary income’ would bring a significant amount of FFP space in order to help the club register signings for players like Franck Kessie and Andreas Christensen who have already agreed deals with the Spotify outfit this summer.

The other complicated operation for Barcelona is the partial sale of their audiovisual rights to a foreign investment fund.

Last year, La Liga president Javier Tebas introduced the ‘La Liga Impulse’ project.

The new project would give ‘CVC Capital Partners’ ownership of 10% of each La Liga club’s audiovisual rights for the next 50 years.

However, for different reasons, Barcelona decided not to sign the deal last year.

But now, the club has been forced to seriously reconsider amidst their struggle to sustain the club's financial structure.

President Laporta recently stated that they have managed to work out slightly favourable and fairer terms for Barcelona in the CVC deal, but he remained surprised about the lack of fairness overall in the deal.

Laporta till now continues to be skeptical regarding the deal, mainly because it is not considered as ‘income’ by La Liga as only 15% of that money would be computed into the FFP system.

Regardless, this operation can still be very important to the short-term financial future of the club, especially if talks for the sale of Barça Corporate’s divisions ultimately break down.

If all goes well, Joan Laporta and the Barcelona board will finally be able to sign players in the summer transfer window and most certainly leave the 'trenches' regardless of how temporary it might seem.

However, such crucial economic operations require pending approval from the socis - who are reportedly expected to vote this June.

The partial sale of valuable assets, which count as extraordinary income, as well as the possible sale of audiovisual rights to a foreign investment fund, will give the club the much-needed breathing space in the wage bill and also allow the registration of multiple transfers (both pending and proposed).

One big name Barcelona fans are excited to see at the Spotify Camp Nou next season is Polish striker Robert Lewandowski, who has reportedly agreed to a €16 million gross salary per season in a three-year contract with Barcelona.

If Bayern Munich let him leave for a fee of around €40 million, then the amortization quota would be fixed at around €13.33 million.

In Lewandowski's case, Barcelona would need to build up €30m in fair play for his transfer.

The 49% sale of BLM for €320 million would guarantee €106 million in salary margin, more than enough to register him and the other signings that have already been completed.

A last resort amidst Barca's resolve to balance their books and generate revenue, is the sale of important players.

Selling players with high market values can also give the team a positive balance and is an option that shouldn't be underrated or overlooked in times like this.

Dutch midfielder Frenkie de Jong's future continues to be up in the air as reports confirm that Manchester United have began talks for a possible summer switch despite Barcelona finding their opening bid as quite 'insultive'.

De Jong is one of the highest earners in Barca and If Manchester United eventually succeded in signing him for a fee of around €80m with his current wage of €16 million gross per season, Barça could net about €56m from his sale.

To do this they would deduct the pending €40m amortization in his contract from the transfer fee, and also add the positive balance gained from offloading his wage to generate figures of around €19m in fair play.

Still, depending on the economic levers Barcelona decide to pull this summer, Barca fans need not worry about the team’s possibility of signing players as it is still very much possible if the deals can be brokered in time and Barca might not even need to sell De Jong.

Despite how awful the situation might look, the Catalan club’s assets remain extremely valuable and is largely in their favour.

To begin with, let's be clear - the sale of Frenkie de Jong will be a major sacrifice to the sporting project no doubt.

He remains one of the best midfielders in the club and the Spanish league generally.

Unfortunately, Barca are currently unable to play hard-ball and turn down a much improved offer for one of their star players, due to the significant amount of money he would bring in and also considering the club’s long-term health.

If Laporta can do it with Lionel Messi, then your guess is as good as mine.

The Barca board are working to complete pending transfer deals as soon as possible and allow Xavi to identify his targets so as to bring them in and build a competitive team.

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