Yes, Barcelona are going for the one
Posted on October 15, 2019
BARCELONA are closing in on their target of € 1 billion in revenues by 2020, a figure that will create a new record for the football industry and place them ahead of their peer group. With their Camp Nou stadium redevelopment and a commitment to technology and youth development, Barca’s ambition is very clear. The only dark cloud on the horizon is the eventual loss of Lionel Messi. Real Madrid have shown, to a certain extent, how the departure of an icon can leave a big gap, but just how huge a chasm will be left when Messi goes?
Barca’s 2018-19 financials show record revenues of € 990 million, although to get a true picture of their relative strength, transfers and other fees have to be subtracted. This gives Barca revenues of € 852 million, a substantial increase on the € 690 million generated in 2017-18. Over the past five years, revenues have grown by some 60%.
Barca spend a lot, though. Their expenses run in at € 973 million and their net profit after all things have been considered was just € 5 million. They had a wage bill in 2018-19 of around € 542 million (up by 2% in 2018-19), the highest in world football by some distance, in fact the highest in professional sport. According to capology.com, Lionel Messi has a base salary of more than € 70 million. No surprise that Barca have a very high wage to revenue ratio, more than 75%.
With such a high cost base, it is no wonder the club is also heavily reliant on the income it generates from player sales. In 2018-19, this amounted to € 101 million, compared to € 200 million-plus in 2017-18. They also maintain an aggressive presence in the market, paying huge fees for players they have earmarked for their squad. In the summer of 2019, they spent € 255 million on players, including € 75 million for Ajax’s Frenkie de Jong and € 120 million on Antoine Griezmann of Atlético Madrid.
Transfer income aside, all of Barca’s revenue streams were up in 2018-19. The stadium generated € 212 million (+6%), TV and media was up by 33% to € 298 million and commercial income rose by 24% to
€ 325 million. Ticket sales amounted to € 71.6 million, an increase of 17%. Barcelona topped the La Liga attendance table, with an average of 75,600 at the Camp Nou, an increase of 13.5%. Real Madrid, by comparison, saw their crowds fall by roughly the same percentage with an average of 66,600, possibly partly due to Barcelona’s domestic dominance – eight La Liga titles in 11 years.
Barca are focused on the overhaul of the Camp Nou – the Espai Barça development – which will raise the stadium capacity from 99,000 to 105,000. The work will cost just under € 700 million and includes making the stadium the first 5G-enabled in Europe. The club will recoup some of that through a naming rights deal for which there will surely be no shortage of takers. Barca increased their net debt to € 217 million by launching a series of bonds and other securities, totalling € 197 million.
Barca have 142,000 members of which 131,000 are in the city and across Catalonia, but the club is also committed to growing Barca’s global footprint and is pursuing a digital initiative in China, which has seen the consolidation of the club’s presence on Weibo and WeChat. Social media is an important tool in spreading the word and Barca has over 300 million followers on the main channels, including 137 million Facebook friends and 84 million on Instagram.
Barca have offices in high growth areas like New York and Hong Kong and have opened the “Barca Experience” in Haikou, a retail centre and museum, among other things Barca. The club also has 50 Academy schools worldwide and have also recognised the potential of eSports by investing in this growing area where technology meets the game. In fact, the club has also launched an “Innovation Hub” which will drive the investment in technology and data. President Josep Maria Bartomeu consider the hub is the club’s most important project.
Unless something goes badly wrong, Barca will reach their € 1 billion revenue target in 2019-20. In some ways, they are ahead of their rivals in so many areas, but as the club continues its strategic plan to upgrade the Camp Nou, they will also have to ensure competitiveness on the field. The gorilla in the room, though, is what will they do post-Messi?
In Spain, it should not be too difficult to maintain momentum, but Barca also have their eyes on another UEFA Champions League title. The past two seasons have seen them go out after letting slip substantial leads, capitulating to Roma and Liverpool. They’ve got a tough group this season, but Barca will still be the team to beat – at home and abroad.