Madrid, Feb. 18 (BNA): Barcelona returned to the second tier of the European Football League after nearly two decades of competition among the elite in the Champions League, which is a blow to its prestige and another blow to its dire financial situation.
He made his Europa League debut against Napoli on Thursday, 18 years after his last appearance in the European Cup. He has reached the knockout stage of the Champions League every time since then, winning the competition five times.
The Associated Press said that the rapid demise of the Catalan club is directly linked to its recent financial struggles, which ultimately led to Lionel Messi’s loss to Paris Saint-Germain last summer.
Here’s a look at how Barcelona’s financial struggle began and what the club is doing to try to recover and reclaim its place as a major competitor in Europe.
what happened?
Most of the blame for Barcelona’s financial problems has been tied to former president Josep Bartomeu, who resigned in 2020 – denying any wrongdoing – amid accusations of wrongdoing in his administration and fallout with Messi.
The COVID-19 pandemic has also affected the club, but the increasingly high salaries of the first-team squad are causing the most problems. Barcelona had the highest salaries in all sports at the end of Bartomeu’s administration, according to the Global Sports Salary Survey. Spending on players exceeded the club’s total income when new president Joan Laporta arrived last year.
Laporta recently handed over to prosecutors what he described as evidence of wrongdoing by the former president.
The club’s debts amounted to 1.3 billion euros (nearly $1.5 billion), including nearly 390 million euros ($443 million) related to player salaries and more than 670 million euros ($761 million) owed to banks.
About 40 million euros ($45 million) were linked to membership losses, while the impact of the pandemic was 91 million euros ($103 million). The club – owned by more than 137,000 members – incurred a loss of 481 million euros ($547 million) and a net worth of negative 451 million euros ($512 million). The club’s revenue for 2020-21 was 631 million euros ($717 million), 26% lower than the 855 million euros ($972 million) from the previous year.
Players’ salaries
Salaries have risen 61% in the past five seasons and Laporta said they would have amounted to 835 million euros ($949 million) – nearly 110% of the club’s revenue – if no action had been taken. Among the players with Messi’s highest salary – with a deal said to be 138 million ($156 million) per season – were Antoine Griezmann, Philippe Coutinho and Ousmane Dembele, the only one still in the squad after turning down offers to leave in the winter. Window. Laporta also accused Bartomeu of paying agents commissions that were higher than usual, sometimes as high as 30%.
salary cap
High salaries have made it difficult for Barcelona to put their squad together because La Liga has strict fair play regulations mostly linked to the clubs’ financial health. Each club has a different maximum salary that is calculated based on factors including revenue, costs and debt.
It is proportional to approximately 70% of the club’s revenue. Barcelona’s ceiling fell in 2021-22 to 97 million euros ($110 million), making it seven times smaller than Real Madrid.
Barcelona’s difficulties have already forced the league to reduce its ceiling from 671 million euros ($763 million) in the 2019-20 season to 382 million euros ($434 million) last season.
What has been done
Laporta refinanced the club’s debt and cut salaries by about 200 million euros ($227 million), increasing the focus on promoting young players to the first team, which is what happened with the likes of Pedri Gonzalez, Jaffe Pez and Nico Gonzalez. The key was also to cut the salaries of some of its highest-paid players and sign free agents who were the cheapest on the market.
salary cuts
The club began significantly reducing the salary cap space last year by renegotiating the salaries of players such as Gerard Pique, Sergio Busquets and Jordi Alba.
This year also cut Samuel Umtiti’s salaries and continued to make way for the departures of Coutinho and Youssef Demir, allowing the club to sign Ferran Torres, Dani Alves, Adama Traore and Pierre-Emerick Aubameyang.
Griezmann’s loan to Atletico Madrid last season partially helped the Catalans sign Memphis Depay and Eric Garcia. Luis Suarez was given up the previous year – as well as to Atlético – to cut costs.
the future
Laporta has drawn up a five-year restructuring project for the club’s finances. It included refinancing the club’s debt with Goldman Sachs in a loan of more than 500 million euros ($568 million) “to give the club some breathing space and not take anything out of the members’ pockets”.
Last year the General Assembly also approved a financing package of up to 1.5 billion euros ($1.7 billion) to renovate the Camp Nou and other facilities, a project that had already started but was changed under Laporta.
The club is also said to be close to a new sponsorship and naming rights agreement with streaming company Spotify to begin at the end of this season to replace Rakuten, who paid 55 million euros ($62 million) for his first four seasons with the club before extending it. Reportedly for 30 million euros ($34 million).
Playing in the Europa League means Barcelona will receive less prize money than if they had advanced in the Champions League, but there have been signs of better times in the 2021-22 budget, which forecasts an income of €765 million ($870 million) – up From 631 million euros ($717 million) last season – and debts decreased from 1.3 billion euros (about 1.5 billion dollars) to 784 million euros ($891 million).
insult