Why Are Barcelona in so Much Debt? [ANALYSIS]

FC Barcelona is one of the biggest football clubs in the world but it’s going through a tough time right financially. Many businesses have suffered due to the pandemic, and Barcelona is no different.

With a loss of revenue, Barcelona appears to be on its knees financially, but how is this possible? Most other professional teams also suffered financial losses yet they don’t appear to be in as much trouble as Barcelona. So, why are Barcelona in so much debt?

Why Are Barcelona Broke?

Barcelona has gone broke due to overspending on playing staff and extortionate wage commitments. Eventually, the wage bill spiralled out of control and Barcelona was paying out more than it earned in revenue. That level of spending isn’t sustainable and eventually the money ran out at Barcelona.

Spending money responsibly has always been a tough ask for football clubs. Barcelona took that spending to new levels following the 2017 sale of Neymar to PSG for £190m. In an attempt to remain a force on the field the board spent £289m during the ‘Neymar window’ and eventually it caught up with Barcelona.

Joan Laporta, Barcelona’s president, explained in August 2021 that the club’s debt was €1.35bn. It was this level of debt that forced the Catalans to let the best player in its history, Lionel Messi, tearfully walk out the door. For free.

Barcelona was forced to reduce its salary commitments by La Liga to ensure the safety of the club. Even playing for free wasn’t an option for Messi as Barcelona had to shed even more from its wage bill. No player is ever bigger than their club and never has that sentiment been more true than at Barcelona.

That financial mess led to plenty of confusion surrounding Barcelona’s playing squad at the beginning of the 2021/2022 season.

Barcelona continued signing players despite not having the room in the salary cap. Key new signings like Memphis Depay were left sweating over their place on the roster. Eventually, senior players were asked to take pay cuts to allow the club to register new players.

Barcelona Financial Situation

Barcelona’s financial situation at the start of the 2021/2022 La Liga season is not good. The club’s debt is €1.35bn and Barcelona has slashed the overspending on player wages. Barcelona was once spending 102% of its income on wages but needs to spend smartly over the coming years to survive.

The writing had been on the wall for Barcelona’s Bartomeu-led board for quite some time. Pre-pandemic, the club was spending money like it was going out of fashion and didn’t seem to consider the consequences.

Sure, Barcelona’s commercial revenue streams are impressive but when the pandemic hit panic began to set in at the Nou Camp. According to the FT, Barcelona became the first sports club in history to surpass $1bn in revenue before it all blew up in its face

In 2013, La Liga introduced a salary cap for clubs depending on their financial situation for the good of the clubs. Barcelona blames La Liga’s tough financial rules on the departure of Messi, and its own salary mess, but the Catalan club agreed to these restrictions.

Barcelona’s situation is exactly the sort of thing the Spanish league authority was trying to prevent. However, fingers have been pointed at La Liga for the lack of flexibility and understanding given the downturn in revenue due to Covid. Key figures on the Barcelona board wanted the rules to be relaxed for the 2021/2022 season but La Liga wasn’t having any of it.

In hindsight, the summer of 2020 was a warning sign that the Barca board should have heeded. Barcelona was forced to release or sell several players to balance the books, including gifting Luis Suarez to Atletico for peanuts. Suarez’s transfer stung Barca even more after the striker helped Atletico win La Liga with 21 goals. 

Barcelona Financial Statements

Despite high levels of expenditure, Barcelona’s spending has, in part, been justified by revenue. Barcelona has hauled in serious commercial revenue allowing the Catalan club to spend big. Financial mismanagement has put the club in danger from a previously stable situation.

YearRevenue €mExpenditure €m
2009/2010415487
2010/2011473473
2011/2012495441
2012/2013490443
2013/2014530472
2014/2015608581
2015/2016679630
2016/2017708677
2017/2018914882
2018/2019990973
2019/2020855955
Source – Statista: Revenue + Expenditure

How Barcelona Got Into Debt

Barcelona’s debt was caused by overspending on wages and transfer fees. Lionel Messi’s final €555m contract cost approximately €139m per season. That wage plus the other expensive contracts meant Barcelona was spending more than it was earning. With so much money going out, the debt kept racking up.

YearGross Debt €m
2011154
2012137
2013104
201474
201555
201627
201754
201868
2019272
2020480
Source: Swiss Ramble

This data indicates things were going well for Barcelona until its revenue began to dry up in 2019. While the revenue loss is largely due to the pandemic, there is no doubt that overspending on wages has contributed to the situation.

Many blame Barcelona’s financial woes on the former president Josep Maria Bartomeu. Under his stewardship the club spent wildly and in the end, Bartomeu, along with his board, was pushed out. Barcelona found its way to the top of the football club debt list in a hurry.

The club’s new president, Laporta, is taking an honest approach with supporters. Laporta is doing everything he can to shred the expenses of the club, including making the tough decision to say goodbye to Messi. Unfortunately for Barca fans, it might take a lot longer to sort out the financial mess their club is in.

Barcelona vs Real Madrid Debt

The two largest clubs in La Liga both struggle with their finances. Off the field, Barcelona and Real Madrid’s debt levels rival each other. Real Madrid’s net debt is €354m while Barca’s net debt is €488. However, Barcelona’s short term debt is much greater which puts the Catalan club more at risk.

Debt isn’t exclusive to the two La Liga Giants, however. There are plenty of Premier League teams in debt too, which suggests the problem with finances is not easy to fix. Especially when considering the huge income every Premier League team receives through broadcasting rights.

Can Barcelona Go Bust?

Any business can go bust, and Barcelona is no exception. Due to a loss in revenue caused by the pandemic Barcelona was forced to cut its wage bill by La Liga. If Barcelona had continued to overspend there was a risk of going bust if future revenues do not recover.

SeasonTotal Transfer Spend £m
2014/2015150.05
2015/201645.90
2016/2017112.28
2017/2018337.05
2018/2019126.99
2019/2020270.90
2020/2021100.80
Source: Transfermarkt

Those spending sprees are enough to make even the most wealthy football execs envious. All of that money spent on players has resulted in Barcelona winning the Spanish league four times during the period. However, those glorious moments on the field put Barcelona in serious financial danger.

With its finances in such a sorry state of affairs, it’s easy to see why Barcelona hasn’t yet committed to withdrawing from the European Super League. According to Marca, each participating Super League team was set to earn €3.5bn as a welcome present. That could certainly fix much of the financial troubles at Barcelona, or any other ‘European Super League’ club like Real Madrid for that matter.

Connor Doyle

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