JUST A couple of months ago, Barcelona were supposedly staring into the abyss, broke, unable to keep their talismanic player and in a deep, deep crisis. Their story was a lesson to every over-ambitious and reckless football club and also, some assumed, an indication of the troubles to come for the industry. The perils of debt and overspending, that was the moral of the tale.
Barca have been in better places and they have certainly lost ground on their rivals at home and abroad. But what’s this we have here, some kindly bankers saving the club? It’s not a Spanish institution that has come to their rescue but Goldman Sachs, the US investment bank who, according to their then CEO in 2009, were very good at doing “God’s work”. Barca probably need celestial help at the moment, so why not hire Goldman to sort out the mess that has built-up at the club? One might suggest the Wall Street firm have provided a big vote of confidence for the Blaugrana.
Joan Laporta, who won the political battle to become president last year, claimed that “Barca are back” after acquiring Manchester City’s Ferran Torres for around € 50 million. With the club’s debts supposedly well over € 1 billion, people are naturally asking how they can suddenly afford such a signing. Laporta, who called Barca “a benchmark club” also insisted a new squad is under construction at the Camp Nou and boasted he will sign Europe’s hottest property, Erling Haaland from Dortmund in the summer. There has been talk of bids for Chelsea central defender Andreas Christensen and Juventus striker Álvaro Morata.
Barca were never going to become football’s Lehman moment precisely because they are Barca. Nobody was going to close them down and even if it did get to the 11th hour, Spain and Catalonia would never allow the demise of one of its biggest sporting entities and ambassadors. The public relations would be a disaster, the blow to Spanish morale would be ill-timed and the politics would also be very tricky to handle. Barca’s situation was undoubtedly caught up in politics, but it did highlight how badly they had been run for a long time.
Goldman Sachs have agreed a € 595 million loan that will run for 35 years but for the first five years, Barca will only have to deal with the interest. In that period, Goldman will work on the vital task of restructuring the club’s finances. The loan, of which € 100 million was available immediately, will allow Barca to stay afloat and also provide some much-needed breathing space.
Laporta, when he unveiled Torres, said Barca were recovering their status and warned the rest of the football world that “we are back as big players in the market”. Such a statement would appear a little premature and also tasteless given the publicity surrounding the club’s financial crisis in 2021. Borrowing money is not an achievement, but merely underlines the parlous state of their finances. A little humility would have served them better.
However, if a bank is going to lend to any football club, it would ideally be to one that can generate € 1 billion a year when the climate is right. With such a high cost base, the problem was that when conditions turned bad it exposed Barca’s fragile business model.
On top of being able to meet their running costs, the club also has its ambitious Espai Barca project in the pipeline. Barca’s members voted overwhelmingly to continue this scheme, which includes the Camp Nou and a new sports centre. The stadium, when completed, will cost around € 900 million, but Laporta believes additional revenue generation from the project will total € 200 million per year.
Barca suddenly seem to be in a better frame of mind than they were just a few weeks ago. Although they crashed out of the UEFA Champions League at the group stage, which must have been a seismic shock on so many levels, they now have “one of their own” in Xavi as coach, their seventh full-time appointment since Pep Guardiola departed in 2012. Only Luis Enrique has seemed anything like a comfortable hiring during that time. Xavi could be Barca’s Zidane, but he doesn’t have the squad the Frenchman inherited at Real Madrid. Xavi has been in charge for nine games and his win rate is 44%, but he will enjoy the luxury of patience from the Barcelona top brass.
Cynics believe Barca desperately needed some good news and Laporta is doing his best to stir things up in the media. He may well have cash that is burning a hole in his pocket, but competition will be fierce for Europe’s big names. How far can they go when they still have so many issues to solve?