Creativity is a skill only a few could boast of, but creativity in accounting is a whole new skill only legends like Mateu Alemany and Joan Laporta can boast of.
This off-the-roof accounting that has seen a cash-strapped Barcelona beat clubs like Chelsea and Arsenal to the signing of some of Europe’s hottest footballing properties is just jaw-dropping.
In Spanish, these acts will be referred to as “Legendario.”
Despite being mired in debt, Barcelona have taken their summer transfer spending past the £100m mark.
All these done on the order of head coach Xavi Hernandez requesting a strengthening to the current squad.
Still faced with very minimal exodus, the question of “how Barcelona have been able to get signings over the line” persists.
A question we will be answering in this piece.
How can Barcelona sign players?
With former president Jose Maria Bartomeu’s exit which left the club groaning in debt, came the return of former president Joan Laporta. A return which has surely not been rosy financially and honestly, the effects of the covid pandemic has not helped. Now putting things into perspective;
The last two summers since Laporta’s return have seen Barcelona tighten spending. But not overly so. They managed to qualify for next season’s Champions League but took a £50m hit on Ferran Torres and the big wages of Pierre-Emerick Aubameyang to do so.
In a bookkeeping sense, Barcelona have been spending more than they were earning. Much more. And at the start of this year, it became apparent the club needed cash fast. They had already loaned out Antoine Griezmann and Miralem Pjanic to ease the wage bill the previous summer. And La Liga’s Financial Fair Play rules meant Barcelona could not make any new player signings – even free deals – unless they raised money in other ways.
Indeed, debt in itself isn’t necessarily a problem. The issue is the Financial Fair Play (FFP).
Remarkably, Barcelona’s salary limit – which covers transfer fees, amortisations, and wages – was at a staggering €-144m. That means they needed to overhaul this before they can spend again.
Servicing the debt of previous transfers and a spiralling wage bill means signing players is near-impossible.
Being the only Spanish club with a negative salary limit, there was an urgency to therefore free up opportunities to spend… they needed to raise money.
Hence the drastic and ridiculous pay cuts most players in the team have had to take so as to drive down the club’s wage bill and ensure it is well under the La Liga cap. Though these players are now owed millions by the club that they may never get back. At least not anytime soon.
Also, Barcelona have had to raise “extraordinary income” through sponsorship deals, agreements with investment funds, and selling players – Mostly youngsters.
The activation of multiple economic levers has ensured Barcelona stays afloat this summer window.
The club can now use 1/3 of any money raised this way to pay for new players. And so Laporta agreed to sell 10 percent of the team’s Spanish league television rights for the next 25 years in exchange for $207.5m (£176m).
This rather miraculous cash in the bank appears to have been what got the signings of both Raphinha and Lewandowski over the line. Though getting Lewandowski required some accounting trickery in the halls of the Nou Camp.
Still stocked with a squad no one else wants, Joan Laporta will hope his magic can somehow get out these players off their wage list.