You can see it everywhere. The work that the board and the technical staff are doing this transfer window is amazing. Might be historic. Xavi gave a list of players that he wanted to sign, and he’s about to get (pretty much) every player on that list. Meanwhile, others who are not financial experts are talking about how Barcelona sell its future for immediate success.
Naturally, for people outside the club and the Barcelona fan base, it’s hard to see that the club are doing so well. People are choosing to believe that Barcelona owe players money, the club is on the verge of bankruptcy, and the club are “selling its future for immediate success”.
However, the fact is that not only the club isn’t on the verge of disappearing, it’s quite the opposite.
On one side: People from the football world like Gary Neville that don’t know how Barcelona suddenly have the money to buy players. Moreover, they talk about how Frenkie should file a lawsuit against the club. I do think that the club could handle the Frenkie story better. But don’t act like negotiating the terms of your contract is illegal. We spoke a lot about the financial story of the club here.
On the other side: The Barcelona board and the financial experts of Goldman Sachs, Spotify, Sixth Street and other organizations that invest in the FC Barcelona brand.
Who should we believe? I think that the answer is easy.
Keeping the team competitive
One solution that the club could decide to do was to sign free transfers and rely on La Masia players. But in the long term – It would cost the club more money. FC Barcelona can’t become AC Milan, or Arsenal. It could harm the club’s long term vision, as not competitive = Less fans. Less fans means hurting the brand of the club.
The power of the FC Barcelona Brand
In May, Forbes magazine published a list of the most valuable football clubs in the world. In the first place we have both FC Barcelona and Real Madrid.
In other words, even after 3 bad years, FC Barcelona is still the most prestigious football club in the world. It’s a value close to the biggest companies in the world.
This fact only is enough to make big organizations and companies want to invest in the club. Big names like Goldman Sachs and Sixth Street would never invest in the club, if it wasn’t worthwhile to them.
The club also has the Camp Nou, which is the biggest stadium in Europe. When the club does well, the stadium is full. And when it’s full, the revenue increases.
The Power of Social Media
FC Barcelona is the club with the most social engagement in the world. Most people follow them, and most people engage the posts of the club.
Spotify, as a Social Media player, wanted to invest in FC Barcelona because of the influence that the club has worldwide.
Financial troubles are real
It’s true, the last couple of years were difficult for our club. The irresponsible handling of the club by the former board led the club into financial mess. At one point, the club had to take a loan in order to keep the club functioning.
The board took a refinance loan from Goldman Sachs and the short term debt became long term debt. Moreover, the return rate is very good (Less than 2%). It allowed the club to have cash flow, and be able to sign players.
The other problem is the FFP, and there’s still work to do there. But it’s never easy to make people give up part of their salary. The current board had to sell players, give up on Leo Messi, and ask players to take a wage cut. Therefore, the current problems with Frenkie de Jong. He can stay and ask to fulfill his contract. But it looks more likely that he’ll either reduce his salary, or leave.
Selling assets of the club?
First of all, I would like to say that it always makes me laugh to hear other clubs talk about how Barcelona are selling the club in the long term. Most of these clubs have owners, while Barcelona is a members club. Moreover, other teams sold their TV rights. All La liga teams sold their TV rights for 50 years last summer. Real Madrid sold 100% of their TV rights in 2006 for 7 years.
And if we take the 25% of the La Liga TV rights sold – It’s up to 5% of the total yearly revenue of the club. We’re talking about very small risk there.
And even if the most catastrophic scenario arrives, the club can sell 49% of the club to an outside owner. So the worst case of Barcelona is to have an owner, like other clubs.
It’s no secret that the club kept a buy-back clause on all the economic levers. The reason for that is the club is building on something great, and it will allow Barcelona to have bigger revenue in a few years.
The Espai Barca project will take the area of the Camp nou and will turn it into something else: We will see a venue full of stores, tourist centers, sport activities and more – and the area will allow more people to be there every day. That would increase the revenue by a lot of money.
Moreover, the collaboration with Spotify will continue in the new Camp Nou. We can expect the biggest stadium in Europe to have big events and concerts in it. That would also increase the revenue of the club.
The club’s financial troubles are not over yet, and they won’t be over until the salary structure if what the board wants it to be.
However, if you compare the financial status of the club to what it was a year ago – It’s a lot better now.
And in the long term – Us FC Barcelona fans can be pretty optimistic.
And the fact that fans from other clubs hate us again, can mean one thing: They are afraid that Barça is back!