Barcelona president Joan Laporta announced on Monday that the club has sold a 25 percent stake in its audio/visual production company to Socios Digital Services for 100 million euros ($102 million), as the Spanish giant ramps up efforts to generate revenue for contracting and player registration. Newcomers under strict Spanish regulations.
Laporta said at a press conference to introduce newcomer Jules Conde from Seville that Sosios will be Barcelona's technical partner under this agreement.
And press reports said last Saturday that Barcelona needed at least 100 million euros ($102 million) in order to be able to register its new players and comply with the requirements of the Spanish Football League.
Enlightening 💙❤️ pic.twitter.com/B9CqTu0OVh
- FC Barcelona (@fcbarcelona_ara) August 1, 2022
Barcelona is on the right track
Javier Tebas, president of the Spanish League (La Liga), responded to reports that confirmed that Barcelona would not be able to score his latest deals due to the strict rules of La Liga regarding financial fair play, by emphasizing that the Catalan team is on the right track this season to register its new players before the start of the season. , and that he is missing a small step to be able to do so.
Barcelona signed Andreas Christensen from Chelsea, and Ghanaian Franck Kessier from Milan, in two free transfer deals.
He also signed the Brazilian Rafinha from Leeds for about 67 million euros, in addition to winning the services of Polish striker Robert Lewandowski from Bayern Munich in a deal estimated at 50 million euros, after Six Street bought the first 10 percent stake.
The Catalan club succeeded in renewing the contract of its French striker, Osman Dembele, and finally succeeded in contracting with Seville defender Jules Conde before Chelsea, so how did Barcelona manage to make all these deals that financially stable clubs were unable to do?
How did Barcelona contract with all these stars despite debts?
In order to understand the extent of the Barcelona crisis, we review the statements of Laporta, who headed the club in one of his best periods between 2003 and 2010, in August 2021, in which he said that the club’s total debts of 1.35 billion euros, of which 673 million are owed to banks.
There are many questions that arise, including how a club that owes more than one billion euros, and with a limited salary ceiling set by the Spanish League of 144 million euros, can include all these stars at this cost?
Will the Association allow them to do so?
And how can a club described by its vice president as “financially dead” when it took over the management of the club from the previous administration, during which the club was about to collapse?
Standards for financial play in the Spanish League
A report by the American "ESPN" website stated that the answer, in short, is that they cannot;
New players cannot be registered because Barcelona does not meet the criteria for financial play in La Liga;
This is because the budget deficit prevents new players from officially joining the team.
The report indicated that the phrase “they cannot” is not the final answer, although the situation currently appears to be the case, because other factors are taken into account such as the club’s ability to achieve budget targets, as well as the club’s ability to meet the association’s criteria for signing players and this is the most important now, It includes the specified salary, which is the amount determined by the Spanish Federation after analyzing the club's accounts, and which is allowed to be spent on the first team.
The reason for setting salaries for Barcelona at 144 million euros was because of higher costs compared to expectations, and bearing some losses from last year, and this figure is not the actual number at the moment, it is not fixed and changes all the time depending on the amount of money in and out, and the next figure will be determined at a time Later this summer, this means that Barcelona will have to make 144 million euros before it reaches zero, and then it will not have what to spend on players.
Selling stars and assets
To get past this financial situation, Barcelona need to cut costs and make money quickly, especially by selling players for a lot of money or letting big wage earners leave.
But neither is easy, as players are opposed to cutting their salaries or leaving clubs where they earn a lot.
There are other ways to increase incomes, such as sponsorship deals and increased game-day marketing revenue, and these are called "economic levers";
There was a deal to sell up to 25% of the TV rights for up to 25 years, as well as sell up to 49.9% of BLM, which is responsible for managing the club's marketing.
However, it may not be a good idea as you are giving away a portion of future profits, but there was no other solution and you have allowed Barcelona to achieve some budget targets, and make a profit in the current financial year, which closed on 1st July.
Barcelona now hopes to be able to sell another 15% for about 400 million euros, and achieving this goal is not easy, but if they do so, they will make a total of 600 million euros in revenue, which means that they can sign and register players, according to the 1:1 rule that It means that whenever you guarantee 1 euro revenue, you can spend 1 euro signing up with players.
Barcelona uses many mechanisms to increase its revenues in order to compensate for losses, reduce debts and meet the rules of financial fair play in the Spanish League.
The sale of 25 percent of Barcelona's audio-visual production company to Socios Digital Services for 100 million euros, after the club sold another 15 percent of its television rights to the American group Six Street last month, which gave this group a 25 percent stake. cent.
The club also signed a shirt and home sponsorship deal with Spotify in a €280 million deal and agreed financial plans in December to renovate the Camp Nou.
Adjustments to the wages of Barcelona players
The administration of President Joan Laporta is seeking to make adjustments to the wages of the club's current players in order to reduce costs while agreeing with the new players on "reasonable" wages, away from the wage ceiling that was approved by the previous administration that caused financial troubles for the club, however, it still has to The club cut costs dramatically.
The report stated that Laporta insisted in the past few days to remind that despite everyone's desire to build the team that coach Xavi Hernandez wants, as well as his personal desire to fulfill his promise to bring in Lewandowski, the decisions taken must be balanced with financial standards, as there is still Lots of players who cost the club big expenses, and a way out of this situation must be found and ways to reduce costs, without affecting the team's improvement plans.
And he believed that doing this is not easy, "As they say, it is not possible to inhale and exhale at the same time, as Barcelona has set a target of 200 million euros in expenses, so not all deals can be signed, the rules will not allow that."
The report concluded by saying that many rumors circulated about the fact that Barcelona and other clubs are allowed to sign players as they wish;
Some claim that they have been allowed to continue spending, repeat past mistakes and record more deficits and debt, and have been accused of having gotten away with their poor financial management, allowed to continue and not forced to face the consequences, and if there is some truth in the first allegations , the latter is not correct.