In the 2021-22 season, Lionel Messi, arguably the best footballer to grace the sport, will for the first time, not be dawning the Barcelona Jersey while playing club football. Feels almost surreal doesn’t it? Fans of the sport are not used to seeing a club as massive a powerhouse as Barcelona succumb to the reality of losing the best player they have ever had, all because they couldn’t pay his wages. Barcelona is 1.4 Billion Euros in debt. This is the same club that regularly earned billions of dollars in revenue every year just a few years ago, the most popular sporting club in the entire world. How is Barcelona, a club that dominated Europe not long ago, now on the verge of bankruptcy? Lets find out.
Barcelona’s state of being billions of dollars in debt can be chalked down to 5 key factors, High risk-Low reward signings, a downright appalling wage bill, bad debt negotiation, poor performances on the pitch and finally, the thorn in the side of almost every sporting body on the planet, the Coronavirus. The root of the first four of these problems can be traced back to the actions of one man, more specifically, one administration. The Josep Bartomeu Presidency has supervised the orchestration of the worst period in Barcelona’s recent history.
An Abysmal Transfer Saga.
The start of Barcelona’s “ludicrous” behavior in the transfer market began with the departure of Neymar Jr to PSG in 2017, a world record transfer which brought in 220 Million Euros, a truly colossal amount. This was the turning point in Barcelona’s fortunes, if this sum of money is invested correctly, it could lead to the beginning of a new era of dominance for a football club, but if the opposite happens, it could lead one down to collapse, and that’s exactly what happened with Barcelona.
Barcelona have spent round about a Billion Euros in the last 5 years in signings which have either been complete failures or not lived up to the expectations, with the odd exception of one or two, being Frenkie De Jong and Pedri, who don’t even make up 1/10th of the total amount spent.
Bad decision making at the hands of the Bartomeu Administration has been at the forefront of these horrendous transfers. Grossly overpaying for players like Coutinho, Dembele, Griezmann and Pjanic (Collectively costing 445 Million Euros), who barely get any game time, to signings which are unequivocally unexplainable, like Paulinho, Vidal, Malcolm and Andre Gomes.
Coutinho (140m Euros), Dembele (125m Euros) and Griezmann (120m Euros).
One incident in particular sums up how dreadful Barcelona have been in the transfer market. Rolling back the curtain to a year ago, in 2020, as Barcelona went up against Bayern Munich in the 2019/20 Champions League Quarter Final, as their own player, in Phillipe Coutinho, playing on loan at Bayern, scored 2 and assisted 1 against his own club Barcelona, in what was a historically embarrassing night for Barcelona as they crashed out of the Champions League losing 8-2.
A wage bill for the ages.
Barcelona have the largest wage bill in world football, which made sense for a club bringing in the largest revenue 5 years ago, but now, despite having the largest wage bill, Barcelona nowhere near have the best squad. Most of Barcelona’s highest earners are of the Old Guard, players above the age of 30 like Pique, Busquets, and previously, Messi, who can’t contribute as much for much longer. And then come the elephants in the room, players like Coutinho, Pjanic, Umtiti, Sergi Roberto and even Griezmann who get fat pay checks without ever delivering performances that resemble them. All of these players make upwards of $118 Million Dollars every year. (Figures from Goal)
The President of the LaLiga, the league in which Barcelona plays, Javier Tebas has been stringent with his limited wage bill policy, a policy which, while being detrimental to big clubs like Barcelona, has kept a lot of smaller clubs out of bankruptcy. This maximum wages cap reduces Barcelona’s allowed wage bill from 671m Euros last year to 382.7m Euros this year, almost cutting it in half. This stringent policy of Tebas explains exactly why Lionel Messi had to leave. He alone makes more than a 100 Million Euros each year. Barcelona’s new wage budget is equivalent to Premier Clubs like Leicester City and less than that of Everton. (Figures from EuroSport)
Crippling Debt.
As it stands, Barcelona currently owe 1.4 Billion Euros in Debt. While a lot of other big football clubs have a higher debt to turnover ratio, their debts are more long term and secure, whereas Barcelona’s debts, 730 Million Euros of them, are all short term, meaning they are payable within a year, and failure to do so results in bankruptcy. Of these, 120 million euros are in unpaid transfer fees. Once again, the incompetence of the Bartomeu Administration comes to the forefront, for their pitifully bad debt structuring and negotiation, which stands as the primary reason for Barcelona’s dismal status quo. (Figures from the Athletic)
The Pandemic.
The pandemic has hit football hard. With matches being played behind closed doors, ticket revenues have disappeared into thin air, as all clubs in world football, specially those like Barcelona and Real Madrid have suffered greatly. But while their competitors have reduced their wage bills and signed fewer players, become more sustainable, Barcelona have shown no sign of slowing down.
A Stalemate.
In a precarious situation such as this, there are few ways for a club to navigate their way through it. One would obviously be to sell their players who aren’t performing, while the other being not signing new players and developing the ones you have. Barcelona, haven’t done either.
For the first, the reason Barcelona aren’t able to offload their high earning non-playing players is because these players, like Coutinho, Umtiti and Pjanic earn fortunes and have no incentive to leave their long term contracts, while other clubs similarly have no incentive to buy players for whom they’d have to pay such ridiculously high wages.
As for the second, despite being capped by a maximum wage clause, Barcelona are still ignorantly signing players like there’s no tomorrow. With the signings of Agüero, Depay, Eric Garcia and Emerson despite being good signings in isolation, just add to the massive wage bill Barcelona have, without the club offloading any players.
“It’s as though they’re like road runner, running off the cliff avoiding their fate until they’re finally suspended mid air” – Dermot Corrigon, a writer for the Athletic.
The Pitch.
As things look like they’re on an all-time low for Barcelona off the pitch, not much better can be said about their performances on the pitch either. Not having even come close to the Champions league in 6 years accompanied with truly humiliating exits, as well as Domestic successes being few and far between, Barcelona have lost millions of euros in revenue because of their dropped performances at the highest level.
Where do we go from here?
Barcelona find themselves in a deep chasm of financial and reputational ruin which they themselves dug. Even with Lionel Messi’s departure, Barcelona still stand way and above the maximum wage cap they need to adhere to. Still, despite how grim the situation is for the club, there are a few things it can do, first would be ventures like the previously proposed European Super League which doesn’t seem likely given the immense backlash; next would be going public, doing which would bring in a lot of money but would cause a rift between the socios who currently run the club.
Despite how truly grim the situation looks for the FC Barcelona, the change of Presidency to Joan Laporta in 2020 does bring with itself some home for the club and its fans, as Barcelona try to rebuild and traverse their way through arguably the worst period in the club’s recent history.
~ Prabhpreet Singh
Sources
The Athletic
Goal
Business Insider
B/R Football
Eurosport
New York Times
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