On Sunday, Barcelona lost to Real Madrid in the 256th edition of El Clásico. It was a close game — Barça twice took the lead, only for Madrid to roar back and win 3-2 on Jude Bellingham‘s injury time goal — and it’s always been too close to call between the two biggest teams in LaLiga.
Madrid have won 104 meetings between the two sides and Barça 100, with 52 draws. Carlo Ancelotti’s side look all-but-certain to wrestle back the league title from Barça, who were crowned champions last year. Los Blancos are 11 points clear of their rivals at the top of the league with six games to play as they chase a 35th championship; Barça, by contrast, have won 27.
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Off the pitch, however, a chasm has grown between the two. This summer, Madrid are expected to follow up the arrival of midfielder Bellingham, who signed from Borussia Dortmund for an initial €103 million, by finally completing a deal to bring in France and Paris Saint-Germain forward Kylian Mbappé, who would arrive as a free agent though with a sizable salary and signing-on fee.
Barça, meanwhile, are in dire financial straits: such is the state of things that they’re not even sure if they can register contract extensions for existing players due to LaLiga’s financial rules, let alone bring in new players this summer. It has been a familiar story in recent years, with player registrations often completed as late as the eve of a new season due to budget impositions from the league.
The most recent figures revealed that the Blaugrana‘s league-imposed annual spending cap for wages and the amortisation — the cost of a transfer is divided by the length of the contract to apply a book-keeping value to each signing — of transfer fees has been cut to €204m. They are in excess of that amount by over €200m — according to LaLiga’s calculations — and must work to get that figure down until they’re able to operate freely again in the transfer market.
By contrast, Madrid’s limit stands at an impressive €727m.
Barça’s success last year and their run to the Champions League quarterfinals, where they were eliminated by PSG, has come on the back of asset sales, famously dubbed “palancas“ (“levers” in English) that funded signings worth over €150m in 2022. Despite the sales of things like domestic television rights and a stake of in-house production company Barça Studios, they remain in a delicate financial position.
“The palancas are a case of bread today, hunger tomorrow,” one source said.
ESPN spoke to various people with in-depth knowledge of Barça’s finances to find out how bad the situation is, whether it has improved under president Joan Laporta and what can be done to steer the club back in the right direction. Could they pull more palancas? Will they have to transfer some of their best players? Will this fan-owned entity eventually have to consider selling a stake in the club to outside investors?
Barcelona declined to comment to ESPN for this story.
‘Monstrous’ debt
The more people you speak to, the more complicated the financial web becomes at Barça. Most, however, agree on the reasons the Catalan club find themselves in such an extreme situation: a wage bill that ballooned after winning the Champions League in 2015, the effect of the COVID-19 pandemic and mismanagement at board level.
Another factor this season is also the move to the 55,000-capacity Olympic Stadium in Montjuic during the redevelopment of their permanent home The stadium now called the Spotify Camp Nou is the largest in Europe, holding 99,000 spectators. This has naturally had an impact on ticketing and matchday revenue streams. “Barça had a wage bill closer to €700m and Madrid around €400m [pre-pandemic],” Marc Ciria, a financial adviser who plans to run for the Barça presidency in the next election, told ESPN. “Multiply that over time, and there you see [the difference between the two clubs].”
Jaume Roures, a Catalan businessman and former CEO of Spanish multimedia group Mediapro, has twice helped Laporta with Barça’s financial picture, first by contributing to the bank guarantee needed for him to become president, and later buying 24.5% of Barça Studios (the club’s in-house media wing) as part of those 2022 asset sales. He has since relinquished that stake.
“The management at Barça has historically been very bad,” Roures told ESPN. “When PSG signed Neymar for €222m [in 2017], Barça registered €32m in profit. The debt was already monstrous then. In any company, if you receive €222m [still the world record for a transfer fee] and have only €30m in benefits, you get fired.
“Admittedly managing a football club is not the same as any other business, [due to] the pressure you are subjected to and the emotions you are handling. Madrid, though, between [club president] Florentino [Pérez] and [CEO José Ángel] Sánchez, have had a little more luck and at the same time, they’ve been capable of building a good team. Bellingham and Mbappé have years ahead of them. They are not just players for a couple of seasons.”
Barça’s limit has been more up and down than a roller coaster. It dropped to a negative number during the pandemic, rose back up to around €600m after asset sales and has now been reduced again to just over €200m. Sources told ESPN that Barça are currently spending over double that cap, somewhere between €400m-€500m, and therefore they remain subject to significant financial scrutiny. It means they can keep the players they have, but are only allowed to spend a percentage of what they save in salaries or raise in transfer fees, with the percentage varying depending on how big the saving is.
“Looking at Barça’s evolution, [spending has] dropped to €500m-ish, so it’s going down,” a league source told ESPN. “They’re building a new stadium and will have more income. So they’re doing what they have to do to get out of where they were.
“Looking at costs, infrastructure projects and capacity for growth, they’ll sort out the situation. Another thing is the immediate impact. They have to be ‘in quarantine’ while they sort that out. Having a debt isn’t bad if it’s controlled within parameters. Looking at Barça’s project, they’ll pay the debt with the new income.”
European football’s governing body UEFA, meanwhile, fined Barça €500,000 last July for wrongly reporting profits in the 2022 financial year that were not considered as relevant income. UEFA has not said precisely what the profits wrongly reported by the club related to, but sources suggested to ESPN it was Barça’s inclusion of the sale of future TV rights as profit in their 2022 accounts.
Where Barcelona can make money
Progress in the Champions League has provided an additional income boost. For reaching the quarterfinals, Barça will receive around €50m in prize money, plus more from the television pool and the ticketing and match day revenue from knockout games at the Olympic Stadium. Some tickets for last week’s game against PSG were being sold via official channels for as much as €500; however, their European exit has denied them a place at the inaugural Club World Cup next year, which would have delivered an additional payday.
Barça will also look to move on members of the squad who do not play regularly and players who have spent these season out on loan. Sergiño Dest (on loan at PSV Eindhoven) and Ansu Fati (with Brighton & Hove Albion this season) are among those stars who could help them raise a transfer fee by leaving the club on a permanent basis.
In recent years, the club have also opted to add midseason and postseason friendlies to an already hectic schedule, playing in Australia, Japan and the United States. Each game has pocketed the club around €5m. They will return to the U.S. for preseason this summer — with a Clasico scheduled in Miami, home of former club stars Lionel Messi, Jordi Alba, Sergio Busquets and Luis Suárez — but a possible postseason friendly is complicated by the fact that Euro 2024 and the Copa América both take place in June.
Therefore, the reality is that tougher decisions will have to be made.
Libero, though, never fronted up the initial €40m payment, per sources, which left Barça’s financial predictions for the 2023-24 season short. It is not just the missing payment that is the problem; the valuation of the company, now officially associated to the club and included on their accounts as benefits, is €400m, 51% of which pertains to Barça. Therefore, some sources say a failure to find a replacement buyer for Libero before June 30, when the current financial year concludes, could create a shortfall north of €200m. Ciria says he believes Barça are seeking a buyer in Saudi Arabia, while Roures says the club are optimistic of solving the problem before June 30.
“There are over two months to go and a lot happens in football in that time — especially at a club of this dimension,” he said. “When we reach June 30, I will begin to worry if there is no news.”
Roures added that Barça Vision is now part of a bigger company that Barça hope will be listed on NASDAQ through a Special Purpose Acquisition Companies (SPAC). That company is valued at €1bn and includes everything Barça do related to in-house production, Web3 (a speculative next version of the internet), NFTs and everything in the digital sphere. Without the Libero payment, though, the NASDAQ listing has been delayed and Barça have been handed an extension to find another investor. It is all so layered and complex that even Eduard Romeu, who recently stepped down as the club’s economic vice president, alluded to it as “financial engineering.”
“For me, the possibility that Barça, even though through a SPAC, appear on NASDAQ with a valuation of €1bn is important,” Roures explained. “It puts the Barça brand on a level where no one in the world of sport is. As it’s through other investors and shareholders, there is also very little risk. It would be a great operation for the club, even more so in this delicate financial situation.”
