‘Not worried about Barcelona’s financial crisis,’ says league president Javier Tebas as club heads for bankruptcy
“Big clubs like Barcelona are heavily indebted because they depend on ticketing and museum revenue, which they simply couldn’t generate last year. However, even in Barca’s case, the situation is n isn’t as bad as some headlines suggest,” Tebas said.
New Delhi: FC Barcelona are a mess, and it’s not because they’re third on the LaLiga points table or that their most legendary player in recent history is probably on his last tour at the club. The Catalans face potential bankruptcy, with mounting debts, growing expenses and few signs of new sources of income.
A recent report in the Spanish daily El Mundo put Barca’s total debt at €1,173m, €730m of which is short-term. The club also owes €266m to banks (to be paid by June 30) and €196m to other clubs for various transfers, including the high-profile acquisitions of Philippe Coutinho from Liverpool and Frenkie de Jong. of Ajax.
La Liga president Javier Tebas, however, is confident the league powerhouse will pull through. Easing concerns raised by the media in a virtual press conference, Tebas said “debt means nothing” if the club’s revenue-generating capabilities are strong.
“If you look at the balance sheets of some of the largest multinational companies, there will be thousands of dollars in debt. But debt means nothing if you have income… what matters is debt versus the ability to get income.
“I think Barcelona have a very acceptable debt-to-income ratio. It’s good to say that Barca have a debt of a million, but their net debt is much less. It would have been a problem if their ability to generate income had declined,” he said.
The LaLiga calendar, like most sporting events last year, went haywire due to the COVID-19 pandemic. The league suspended the season in March 2020 and action resumed behind closed doors in June, but a lack of gate money and stadium sales has added to the misery of bigger clubs such as Real Madrid and Barcelona. Spanish clubs have introduced pay cuts to counter mounting losses, and recent reports suggest Barcelona – perhaps symbolic of world football’s financial woes – have not paid their players since December.
Tebas defended the club. “FC Barcelona has its method of payment. They don’t pay monthly; they pay in January and June. Clubs like Real, Atletico and Barca have done pretty much what every big business in the world has done. They fired their staff when there was no action, but now I guess most clubs have 100% their squad back.
More than finances, Tebas felt Barcelona’s biggest concern was the lack of leadership. Josep Maria Bartomeu resigned as Barca president in October amid mounting public pressure, leaving a trail of economic chaos. His interim successor, Carles Tusquets, has limited decision-making powers. To top it off, he reportedly had a furious exchange of letters with presidential favorite Joan Laporta over the signing of Manchester City defender Eric Garcia, even as the election was postponed from January 24 to March 7.
“I think the biggest problem for them is to organize presidential elections which have been delayed. It is important for them to have a president and executives to make decisions. Financially, they have more than 700 million euros in income, the highest in the world. So if I had to manage Barça with 700 million euros, it would not be a problem. Many clubs in the world are the worst placed than Barcelona,” Tebas said. .
“Big clubs like Barcelona are heavily indebted because they depend on ticketing and museum revenue, which they simply couldn’t generate last year. However, even in Barca’s case, the situation is n isn’t as bad as some headlines suggest. I believe your debts should be in line with your income.
“I think they (Barcelona) have a billion in debt, but they also generate some of the highest income in the world. When the pandemic is over, I hope things will get easier for them. It hasn’t been easy. The stadiums are empty, the museums are vacant, the sponsors are checking their contracts because there was no exhibition, and it is undeniable that all this affects the clubs.
Moreover, Tebas credited LaLiga’s economic reforms with softening the financial blow on smaller clubs. The reforms, introduced seven years ago, are allegedly aimed at creating economic parity between Spanish clubs to ensure a level playing field.
“LaLiga’s plan is simple and applies to all clubs,” said the 58-year-old. “The plan is to make club-friendly decisions, ensuring that clubs spend as much as possible on wages while respecting our economic control. These regulations have actually helped clubs. Many people wonder why Barcelona are not recruiting new players. Well, it’s not because they don’t want to, it’s because they have to follow certain economic regulations that benefit them in the long run. So, I would like to repeat that the situation at Barcelona aren’t that bad, yes they have a debt of more than 1 billion, but they also have a revenue of 700 million euros.
Contrary to Tebas’ claims, Spanish media suggest that Barcelona’s wage bill is currently 74% of their income, while league guidelines recommend a cap of 70%.
Financial issues aside, Spain is currently battling what experts consider to be the third wave of coronavirus. On January 27, the country recorded the daily coronavirus positive count of 15,660, while the total number of cases in the country is over 26 lakh. Tebas conceded the situation is worse than it was last year when the league resumed after a three-month hiatus.
“Times are much tougher than they were when we took over the league last year. There is also a new strain and people are more likely to catch the infection. I think the effectiveness of our security protocols and the way we have run the league means that to date we have not suspended any games.
“Directing matches in such a situation is very, very complicated. This week, we had to change the protocol twice; testing and security measures have been intensified. We are constantly studying the situation and adapting,” he concluded.