Updated: 22 December 2021
Barcelona is said to be in debt to the tune of more than one billion Euros, which is a massive sum when you consider all of the marketing and all of the brand value that Barcelona has. Nonetheless, the club’s financial condition has deteriorated, and no greater example of this can be found than the Messi Gate crisis and, subsequently, the transfer market.
Barcelona has been unusually quiet in the transfer market this offseason, preferring to let go of players rather than add new ones. While they continue to throw their names into the hat for players such as Erling Haaland and a probable return for Neymar, the fact is that the club cannot afford large-scale contracts or large transfer prices in the current market.
FC Barcelona’s Financial Crisis Explained
Barcelona & Lionel Messi
The declaration that Lionel Messi, the greatest player to ever don the Barcelona jersey, would be leaving the club owing to an inability to reach an agreement on a new contract is additional evidence that Barcelona is no longer the club they once were. So, how awful is Barcelona’s financial situation? What was the cause of the debt?
Barcelona Financial Situationa
A story from The Athletic claims that Barcelona was severely affected by the Covid-19 epidemic and suffered damages of 203 million euros, which were split down as follows: Stadium upkeep costs €67 million, television costs €35 million, marketing costs €72 million, and transfers cost €29 million. A total of 267 million euros is expected to be lost by the club in 2021; this will result in a combined loss of 470 million euros in only two years.
When you include in what the club owes in salary, which according to sources amounts to 74 percent of Barcelona’s financial budget, the debt only continues getting worse and worse. Catalonia has been estimated to be in debt for the next 12 months, bringing their losses to €731 million, making them the team with the highest short-term debt in European soccer.
Barcelona Financial Mess
Even worse is the fact that Barcelona did not have the financial resources to complete the signings of Sergio Aguero, Eric Garcia, Memphis Depay, and Emerson Royal in the first phases of the transfer window, owing to their total debt of € 1.2 billion at the time. To make these moves possible, the club had to put aside more than €200 million in savings. Every club in La Liga is subject to a rigorous salary ceiling, which limits how much they can spend on their first-team players, reserves, academy players, and other personnel.
Barcelona has cut their wage budget in half this season and is working to free up cap space to accommodate their new signings, but it was not enough to fit Lionel Messi, whose contract contained a significant salary reduction as well as compensation for other duties inside the club. Finally, Barcelona just lacked the financial resources to satisfy Messi’s contract obligations. As previously stated, Barcelona not only has financial losses as a result of bad expenditure, but the club also has bank debts that it must repay, which has prevented the club from achieving any financial improvement.
Barcelona’s financial collapse has been attributed mostly to mismanagement and overspending; it has been alleged that even their present sponsorship arrangements have been lowered as a result of the club’s failure to adhere to the terms of some of the contracts.
Final analysis About Barcelona Crisis
Barcelona is mired in a financial crisis that can only be characterized as arrogant and poorly handled. Barcelona has gotten itself into a hole that might continue for quite some time if they don’t improve their financial management in the next years, thanks to a combination of high transfer fees, bank loans, and high player salaries.