When Debt Becomes an Unwanted Star: Barcelona’s Bold Quest to Escape a Financial Gordian Knot

Crisis and Comeback: Barcelona’s Financial Struggle

Barcelona is navigating a financially perilous phase, juggling massive debts with efforts to reorganize its economy to ensure long-term stability.

The crisis didn’t arrive yesterday; it built up over years of questionable financial management, culminating in a debt load unseen in football.

Nevertheless, the club keeps pressing forward with a mix of financial measures and new projects, including plans to reopen the Spotify Camp Nou stadium.

During a recent general assembly, one member admitted he did not understand a word of what Ferran Oliví, the club’s chief financial officer, presented about the numbers.

The sentiment is echoed by Chris Weatherspoon, a sport-economics expert, who in a piece for The Athletic broke down the club’s finances and described his task as “facing Hydra”—a mythical multi-headed monster that grows two new heads whenever one is cut off.

The paper noted that Barcelona’s economic troubles began with poor management after Neymar’s 222-million-euro departure, the highest transfer fee in football history. Those funds were expected to bolster the Catalan economy, but instead they spurred deterioration due to immediate spending and a lack of long-term investment, as Weatherspoon explained: “Rather than investing for the long term, they spent Neymar’s money on the spot—and then some.”

The article also pointed to the signings of Ousmane Dembélé, Philippe Coutinho and Antoine Griezmann, plus lavish contract renewals, and especially Lionel Messi’s 500-million-euro deal over four years, as major factors in the rapid deterioration of the finances.

With the Covid-19 pandemic, matchday revenues fell and the club delayed payments to players amounting to 389 million euros.

At that stage, Barcelona activated credit lines with Goldman Sachs, and under President Joan Laporta, the debts climbed to 595 million euros.

With operating losses up to 200 million euros per year and a fall in the value of some players by about 160 million euros, the club finished the 2020-21 season with a record loss of 555 million euros—the worst financial result in football history.

Asset sales as a temporary fix

To cope with the crisis, Laporta resorted to what were called “financial levers,” partial asset sales to secure short-term revenue.

Among the standout moves: selling 25% of the club’s broadcasting rights for 667.5 million euros, funding acquisitions like Lewandowski, Raphinha, and Kondi, though at the cost of reduced future revenue streams.

Weatherspoon noted that even if league rights stay the same until 2047, the amount Barcelona surrendered could reach a billion euros.

Another move involved selling 49% of “Barça Studios” (about 200 million euros), another heavy financial burden, according to Weatherspoon. These operations (broadcast rights and Barça Vision) yielded accounting profits of 801.5 million euros in 2022-23, but cash flows were not received in full, and Barça Studios’ book value was written down from 401 million euros to 178 million euros following auditors’ recommendations.

Although the club posted operating profits in the last two seasons, the asset devaluations still meaningfully hit the bottom line.

Weatherspoon sees some improvement in the financial picture thanks to revenue growth but warns of a massive debt load—about 1.45 billion euros—the largest in world football, with interest eating roughly 30 million euros a year.

“If you add 907.7 million euros of the Espai Barça project debt to a string of smaller loans, you’re looking at total debt of 1.45 billion euros, and it’s likely to rise if the project continues,” he said.

Barcelona continues to merge Espai Barça’s assets and liabilities in its books as parts of the construction are completed, even as moving back to Montjuïc has hurt the numbers, making a return to Spotify Camp Nou urgent.

Weatherspoon notes that delays have only amplified the financial impact. He puts the Espai Barça project at about one billion euros, not counting revenue losses from moving the club away from Camp Nou.

Plans to bolster resources and ease debt

The club’s strategy to raise revenue and pay down loans rests on the expectation of higher post-opening earnings. Barcelona hopes to generate about 250 million euros in additional revenue this season compared to last, once the stadium is open, and Weatherspoon called that money essential.

The article also notes that 424 million euros of Espai Barça financing has been refinanced, and the club continues to seek new income streams, including friendlies.

The economy expert concluded it is still premature to declare Barcelona fully out of the financial deep crisis it faced years ago.

Weatherspoon ends with a reminder: the club should keep relying on its academy model and avoid over-spending on mega-signings, which were the principal cause of the crisis in the years past.

PUNCHLINE 1: If football debts were scored goals, Barça would be chasing the back-heel tap at the world championships. PUNCHLINE 2: When life gives you hydras, you don’t cut one head—you finance the stadium to buy a bigger head of lettuce to feed the dragons in the box seats.