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Barcelona football club mortgages its future for a quick resurrection

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Suffocated by debts and with a team that could no longer rub shoulders with the greats of Europe, the leadership of the Barcelona decided that he only had one alternative after seeing the real Madrid celebrate the shaft titles last season.

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They decided to spend hand over fist.

Barça faces the season with the immediate objective of reviving its laurels after the signings of striker Robert Lewandowski, defender Jules Koundé and winger Raphinha to reinforce an irregular squad made up of young promises and several discards.

The three signings, at a total cost of 160 million euros ($163 million), have left Barcelona as the club that has spent the most this summer in Europe. But they represent a larger outlay that will increase the burden on the Catalan club over the next quarter century.

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With Barcelona about to close last season with financial losses for the fourth year in a row and with no money to spend on transfers, president Joan Laporta decided that the only way to stop the team’s downward spiral was to mortgage its future.

After receiving the support of Barcelona’s partners, the board approved the sale of 25% of the television rights that corresponded to the contract with the Spanish La Liga for the next 25 years, an amount of 667 million euros (US$ 679 millions). Money in hand, they shook the pass market.

“It is true that I would have liked not to sell the percentage of television rights”Laporta said last week from New York, where the club completed a preseason tour of the United States.

“But the situation was complicated and we needed to be brave and make decisions, because football doesn’t wait and our fans, who are very well used to it, deserve a club like Barça to compete”.

The azulgrana waste could not have finished. He has just sold 25% of Barça Studios, his audiovisual production company for another 100 million euros.

They have committed a third of that income to the signing of new players, a third to increasing reserves and another third to pay their debts, which despite efforts to reduce it remains at 1,000 million euros.

The sacrifice of future income comes after Barcelona sold the naming rights to Camp Nou. Europe’s largest stadium will bear the name of Spotify, the pro-streaming music platform, which will also be emblazoned on the shirts when they open the season against Rayo Vallecano on August 13.

Laporta, who found himself a club in debt when he returned to the presidency last year, has also maintained his support for Madrid president Florentino Perez’s project to launch a European Super League.

But not even partnering with Spotify and getting rid of the salaries of Lionel Messi, Luis Suarez, Philippe Coutinho and Antoine Griezmann for next to nothing in recent years have balanced the books.

Mismanagement under his predecessor Josep Bartomeu, combined with the impact of the COVID-19 pandemic, left the club with a staggering $1.3bn in debt and the most expensive squad in football.

The financial disaster has gone hand in hand with a succession of poor results.

They have not won the league for three seasons after being crowned champions in eight of the previous 11. They haven’t lifted the European Cup since 2015, when they won the Champions League for the fourth time in a decade. They won absolutely nothing last season after Messi left for Paris Saint-Germain.

In short, the almighty Barcelona is now the talk of the town for its economic stagnation, the scandals involving Bartomeu despite the fact that he denies having done anything wrong, letting Messi go and many embarrassing defeats, such as the historic 8-2 setback against Bayern Munich.

For Laporta’s detractors, the announcement of the sale of a second package of television rights, just when they were in Las Vegas to face Madrid in a preseason classic and that the azulgranas won 1-0, served to highlight the present .

For voices like retired English player Gary Neville, selling the rights shows a desperate club.

“Why is Barcelona still looking for the Super League? Here is the explanation! A desperate club with £1.2bn in debt selling off future sources of income to spend on players today in the ‘hope’ it pays off. It’s rolling the dice in a giant club.”Neville wrote on Twitter.

Laporta argues that he had no choice. The alternative was to keep piling up flops, lose fans, and generate less revenue.

Advocating unprecedented measures in June, Laporta informed members that a club had been found on the verge of bankruptcy when he assumed the presidency after winning the club’s elections in March 2021.

“We had no liquidity for payroll. We were dead”Laporta said. “We restructured the debt, we controlled spending, although we have reduced the sports payroll substantially, but not enough, getting new income and sponsors, we will go from being dead to the intensive care unit and then we will return to normal life”.

In any case, even with the most favorable analysis, the decision has been painful.

“From a financial point of view, it is never good news to sell assets”commented the economist Marc Ciria, who in 2015 was part of a failed presidential candidacy headed by Laporta and who now has no link with the president.

“The asset of television rights is by definition the asset that is always growing, but I also understand that Barça, due to its size, needs to compete and cannot afford another year like the last one”he added.

Source: Gestion

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