FC Barcelona presidential hopefuls pledge to restore finances – and keep Messi
A week that began with a police raid on the offices of FC Barcelona will end with a change of management within the Spanish football club plunged into crises on and off the pitch.
The Catalan institution votes on Sunday its 140,000 members to elect its next president.
Three candidates – former club president Joan Laporta, tech investor Victor Font and lawyer Antoni Freixa – are trying to succeed Josep Maria Bartomeu, who resigned last year after a spectacular break with the biggest player in Barcelona, Lionel Messi.
Bartomeu was stopped alongside the club’s general manager and his main lawyer on Monday. Police are investigating a scandal dubbed “Barçagate” – allegations that the club corruptly hired outside groups to defame Bartomeu’s opponents on Facebook.
Bartomeu could not be reached for comment but has consistently denied the wrongdoing. The club said it had offered its “full cooperation to the judicial and police authorities”.
The candidates admit the deal is damaging the club’s image, but speaking to the Financial Times ahead of the vote, they discussed how they would tackle potentially bigger issues: returning Barcelona to profits after the pandemic; tackle a growing debt of 1.1 billion euros; and convince Messi to stay.
Another financial blow came on Thursday after Barcelona and three other Spanish clubs were ordered to repay millions euros received as state aid. The EU’s highest court has declared the advantageous tax provisions they have enjoyed for a quarter of a century illegal.
Laporta, 2003 club president for seven trophy-laden years, said he would, once again, make Barcelona “a benchmark [point] in the world of football ”. Freixa, a former club manager, said that [is] perfectly possible if we make the right sporting decisions ”.
Font offered the harshest assessment, claiming years of overspending on players, spiraling debt and coronavirus-induced revenue shortfall of just over € 200m last season have created “a perfect storm”.
“The old economic model of FC Barcelona [has become] obsolete, ”he said.
Barcelona had been admired in world football as a model of success. Since the turn of the century, his team of stars have won the Champions League, the biggest club tournament in Europe, four times.
All of this was done under the ownership of the members, rather than a wealthy individual or group to fund the team. Instead, Barcelona have profited from the rise in media rights contracts and trade deals, with sponsors seeking to be associated with the winning side.
In the 2018/19 season, he became the the most income-generating club in the world with 840.8 million euros – an increase of almost 500 million euros compared to ten years earlier.
Barcelona’s stated ambition was to be the first football club to achieve annual sales of over € 1 billion. The pandemic shattered that notion.
The top teams, from England Manchester United to Italian Inter Milan, have suffered sharp drops in income with spectators absent from the stadiums. But Barcelona were among the hardest hit, falling to a € 100m loss before tax last season.
The prospects for quickly turning to growth once fans return are bleak. Broadcasters across Europe have announced that they will forgo paying ever higher amounts to broadcast top football. The value of transfer market players of 5.6 billion dollars collapsed, as clubs reduce their spending on teams.
This has left Barcelona in a precarious position. The spending translated into huge borrowing: the club’s total debt topped € 1.1 billion, with creditors including banks, players, tax authorities and rival clubs. The majority of this debt is short term, with repayment due this year.
Barcelona Square as cultural institution, generously supported by the business class of Catalonia, has led to believe that the club will be bailed out of its financial situation.
“Imagine if [people] said Queen Elizabeth II was going to go bankrupt? said a senior executive at a Spanish bank. “She’s not. Barcelona have intangible assets that will never go away. ”
Club leaders are in talks with lenders over debt refinancing, but the leadership vacuum has stalled talks. “There are plans A, B, C, D,” said a person close to the management team. “[But] nobody wants to make a decision. “
When Christian Seifert, general manager of the German Bundesliga football league, attacked plans for a separatist European “super league”, he chose clubs like Barcelona for pushing ideas that concentrate wealth among the elite of the world. football without first solving their own financial problems.
“These so-called super clubs are in fact mismanaged money-burning machines that have not been able, during a decade of incredible growth, to come close to a business model in somehow sustainable ”, Seifert Told the recent FT Business of Football summit.
Sunday’s election was called by the resignation from Bartomeu in October. His downfall began a few months earlier, when Messi asked to leave after a humiliating 8-2 loss in the Champions League quarter-finals to Bayern Munich. The loss was the latest in a string of heavy losses in the later stages of the competition in recent years.
Bartomeu blocked the movement. Messi, six-time winner of the Ballon d’Or, the sport’s highest individual honor, has chosen to see his contract, which runs until June, rather than start a dispute with the club.
Refuse to sell at a price. Spanish newspaper El Mundo cited leaked documents to reveal Messi’s four-year contract was worth € 555m, including the easily-obtained salary and performance bonuses that make him one of the highest-paid athletes in the world.
The Messi slot machine
Yet Barcelona presidential candidates consider him value for money, vowing to persuade the player to stay at the club – but perhaps on reduced terms.
Laporta, who has garnered more nominations than any other candidate, argued that Messi allows the club to generate bigger sponsorship deals and attract high profile VIP guests to the games.
“Messi costs 8% of the club’s total income,” he said. “[But] Messi generates around 30% of [that] Income.”
Font said he would offer the player “a contract for life”. His plan calls for the Argentinian to suffer a pay cut in the years to come, but then enjoy financial security for decades. The club would benefit from the current association through future marketing agreements.
While offering hymns to Messi, the candidates had buns for the club’s former administration.
In particular, they support the record costs of € 222m The sale of Brazilian striker Neymar to Paris Saint-Germain in 2017 was wasted on inadequate substitutes – such as midfielder Philippe Coutinho and winger Ousmane Dembélé – acquired on transfer fees and significant salaries.
During the 2017-18 season, Barcelona’s payroll jumped almost 50% to around 640 million euros, paying more in player salaries than any world football club. His payroll has remained at similar levels, absorbing three-quarters of the club’s income.
Each of the candidates suggested he would spend less on players, with a greater reliance on young people developed in his famous La Masia academy, from which Messi once graduated.
Font said he would bring in Xavi Hernández, a legendary former player and academy alumnus, and give him sweeping powers, similar to Manchester United’s Sir Alex Ferguson or Arsenal’s Arsene Wenger – former managers who have coached the first teams but had broad control over sporting matters.
Freixa focuses on strengthening the team, seeking to acquire “two or three better players”. This would be funded by spending the proceeds of a proposed deal to sell a stake in Barça Corporate, an entity that contains activities such as its merchandising arm and “innovation hub“.
Laporta has pledged to inject liquidity into the club following the likes of Inter Milan and Tottenham Hotspur to raise liquidity in the bond markets. “I have enough experience to talk to banks face to face, to explain the situation, to explain our potential jobs, our potential in terms of sporting success,” he said.
But Font insists the club can’t afford to keep ramping up debt to facilitate further spending. Instead, the tech entrepreneur – in a move Laporta is backing – called for a review of a € 1 billion plan funded by US investment bank Goldman Sachs to redevelop its Camp Nou stadium from 100,000 places, seeking to reduce the cost of the project.
Club members – each a shareholder and staunch fans – must decide who can best leave Barçagate, while retaining Barcelona’s place as one of football’s financial and sporting champions.
“I would like to send a message of calm,” said favorite Laporta. “FC Barcelona has enough assets, sufficient resources to reverse this situation.”