FC Barcelona are undoubtedly in one of the toughest situations in football at the moment. Reckless decisions, poor transfers, and huge wages have dumped them in what’s been reported as over £1 Billion of debt. That being said, they still remain active in the transfer market. Having secured the signature of Raphinha from Leeds last week, they have now confirmed their acquisition of Bayern’s Robert Lewandowski for a further £40 million deal with ad-ons.
But with players being owed millions in wages and the club’s financial situation still no closer to being stabilised the motive behind the huge spending is still a mystery. And with even football insiders admitting they have no idea how Barcelona can afford this, how are they doing this? Where is this kind of money coming from?
In simple terms, Barcelona have decided to sell a cumulative 25% of their television broadcasting rights to outside companies to raise funds. The decision has also been taken to sell 15% of the rights of their clothing company.
This gives them some capital to work with in an attempt to bring big names to the club, hoping that success on the field will restore the club to its past glory and solve their financial issues. This is also a bargaining strategy used to gain a more favourable wage allowance from La Liga, as they now have proof of funds after effectively re-mortgaging the club.
Another way they’re looking to further this strategy is through the sales of some of the club’s star players that are deemed non-essential. One of the names being thrown around is of course Frenkie De Jong who has been rumoured to be joining Manchester United for upwards of 80 million Euros. But due to disputes over wages owed to him by Barcelona (In excess of 17 million) they can neither afford to keep him or sell him.
But is this clever business from the Catalan giants and will this contribute to fixing their problems? In short, no one knows but all signs point to no. It seems to be a completely unsustainable strategy that will only come back to bite them in the end.
These new signings commercial value is severely depleted due to 15% of the shirt sales from their new stars, vanishing immediately. The lucrative TV deals will take enormous chunks out of their revenue each year, especially taking into account the scale of Barcelona’s crisis. Meaning that they will most likely have had to accept deals well below market value due to the severity of their situation.
It’s a process that will likely take years to pay dividends and represents a massive risk that will be unavoidable and present itself every season until it’s resolution. Perhaps a more intelligent strategy would be to protect the club, trust in the youth and rebuild from the bottom. But the higher the risk the higher the reward, and let’s just say the reward must be pretty huge.