By Gabriel Landrein
Joan Laporta (photo credit: New York Times)
In the last installment of this two-part series, we saw how ex-president Josep María Bartomeu steered Fútbol Club Barcelona into financial disaster. Now, we will see how new club president Joan Laporta is attempting to remedy the situation, and why his gung-ho strategy is very risky for the team.
Laporta has said repeatedly that a club of the stature of Barça cannot endure a ‘rebuild’ season, and must strive for silverware every single season, regardless of the club’s internal issues. This means that despite a crushing debt, Barcelona is nonetheless spending freely to attempt to win their various competitions for the upcoming season. This translated to Barça being the highest-spending Spanish team this offseason in terms of transfers, spending a total of €155.7 million. This can be broken down into three player acquisitions: Raphina, a skillful and shifty Brazilian winger, was acquired from Leeds United (England) for €60.7 million. Promising young French center-back Jules Koundé was bought from direct rivals Sevilla (Spain) for €50 million. Finally, veteran Polish striker Robert Lewandowski, with over 600 goals for club and country, was acquired for €45 million from Bayern Munich (Germany). In addition to these expensive signings, Ivorian midfielder Franck Kessié and Danish center-back Andreas Christensen were signed on a free transfer deal.
Robert Lewandowski, Barça’s marquee summer signing (photo credit: Barça Blaugranes)
On the other side, Barcelona have made a concerted effort to shed their deadweight, but have only managed to make money on two departures. Brazilian winger/midfielder Philippe Coutinho’s transfer to Aston Villa (England) brought in €20 million (a staggering €140 million less than what they paid for him), and Portuguese winger Francisco Trincāo’s loan move to Sporting CP (Portugal) brought in €3 million in fees. Barcelona got rid of ten other players, through free transfers and loans, but none of these netted the club any revenue whatsoever. Therefore, Barcelona’s transfer deficit this summer totals -€132.7 million, a concerning amount for a team already shirking the edge of bankruptcy.
However, Joan Laporta has managed to find a way to miraculously finance these signings, despite the monstrous debt of over €1 billion the club is currently dealing with. Laporta has activated several financial ‘levers’ (assets) that Barcelona has access to. The first of the four is the sale of 24.5% of Barça Studios, Barcelona’s audiovisual and content-creation branch, to Orpheus Media for €100 million. The second is a further 25% of Barça Studios sold to the crypto company Socios.com, also for €100 million. The third and fourth are the sales of 10% of the club’s television rights to Sixth Street, who also keep 10% of the club’s TV rights from LaLiga for the next 25 years, for €207.5 million, and a subsequent sale of 15% for €400 million. Through these four levers, Laporta managed to raise €807.5 million dollars in capital for the club, which largely covers the club’s spending in summer transfers, as well as reduces the long-term debt.
Barça’s newly christened stadium, Spotify Camp Nou (photo credit: FC Barcelona)
These deals have many pros and cons. On the positive side, this immediate injection of capital allows the club to make their debt more manageable, while still signing players and being more competitive in the upcoming season. Laporta hopes that by significantly strengthening the squad, Barça will be able to go farther in competitions such as the Champions League and Copa del Rey, and also compete for the LaLiga title. Success in these competitions leads to an influx of cash to the team through prize money. Additionally, Laporta believes that with a more competitive team, fans will be more eager to see Barcelona play at the newly-christened Spotify Camp Nou (Barça’s stadium), therefore bringing in more revenue from ticket and merchandise sales on gameday.
Current Dutch midfielder Frenkie de Jong at Barça Studios (photo credit: MKT Esportivo)
However, activating these financial levers also holds high risks for Fútbol Club Barcelona. After the new signings Barcelona was able to make, anything less than winning LaLiga and la Copa del Rey, as well as advancing significantly in the Champions League, will make the season a failure. The fans’ massive expectations will be let down, and the club will fail to gain important capital from these competitions, in which case the investment into new players will have been for nought. Additionally, the sales of assets such as Barça Studios and the club’s LaLiga television rights, despite netting vast short-term gains, will mean significant losses in the future, which some have projected could equal over €1 billion. This means that, despite having stabilized the current financial situation, Barça still faces the same problems, only now they have been pushed further down the road.
Joan Laporta has bet big on Barcelona competing on all fronts this season, and only time will tell if his bet will pay off. His actions entail significant risks for the club, but also massive potential for success and righting the sinking ship. A storied club of Barcelona’s stature deserves to be considered among Europe’s football elite, and Laporta’s decisions may well have set them on the path to glory once more.
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