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THREAD: Barcelona's finances under the loop
Like, RT's & feedback appreciated.
Like, RT's & feedback appreciated.
The COVID pandemic has affected a majority of the clubs, big or small, and Barcelona are no stranger to this. In this thread, I will look at a few aspects of our finances.
As always, I don't claim to be an expert - these are my own views.
As always, I don't claim to be an expert - these are my own views.
Revenues are a big part of Barcelona, given we have amongst the highest revenues in the world. We benefited in 19/20 73M from player sales alone. These include to the outgoing transfer of Arthur, Malcom, Abel Ruiz and Cucurella. This is a fairly low amount compared to usual.
In comparison, Atlético have earned 136M from player sales in 19/20, while Real Madrid earned 101M from player sales. Barcelona lags behind with only 73M. Just like many other clubs, Barcelona depend a lot on player sales to increase revenue and make profit, and we even more so.
Our earnings before Tax, Depreciation, Interest & Amortization fell to ~100M, which means only ~30M were excluded from player sales. It's ~70M less than 2019, the year with the most of these earnings in the last decade. The club projected 100M more if it weren't for COVID.
Our commerical revenues obviously fell, just like anywhere. In 2019, we stood at the highest in Europe, ahead of money giants like PSG and Manchester City. We earned ~380M in commercial, and we've seen a drop of 40M in these revenues in 2020(-11%!).
With ~280M made alone from TV rights, we stand the highest in La Liga - Madrid had ~250M. It's reassuring, given only Liverpool has a barely higher - and that is while EPL clubs have a lot more TV rights due to the PL's smart marketing La Liga doesn't have.
P R O B L E M S A R I S E
Seems all good, doesn't it? Revenues are no problem. There may have been a drop, but nothing indicates a major problem in the financial departments, doesn't it? Let's look at the losses and our debt.
Seems all good, doesn't it? Revenues are no problem. There may have been a drop, but nothing indicates a major problem in the financial departments, doesn't it? Let's look at the losses and our debt.
Our revenues fell by 97M, the biggest in La Liga's top three (RM had 0, ATM had a loss of 2M - basically nothing). Barcelona are amongst the highest 'losers' of this pandemic, and not only in La Liga, but in the world's "top" club. Only Everton, both Milans and Roma are ahead.
(By that, I mean about losses in 19/20, after paid Tax.)
Without any surprise, player amortization has risen by ~30M to reach 174M. What does this mean? Amortization means that the club doesn't instantly pay the other club for the transfer of the player.
Credits for edit: BEIN
Without any surprise, player amortization has risen by ~30M to reach 174M. What does this mean? Amortization means that the club doesn't instantly pay the other club for the transfer of the player.
Credits for edit: BEIN
Instead of paying instantly the former club of the incoming player, the club decides to pay the player's fee over the length of the contract (Especially when it's a 3-4 years deal). Again, we have the highest amortization in La Liga: 192M, in comparison to Madrid or Atlético.
While it doesn't seem of a big issue, Barcelona haven't stopped doing it. Many clubs are waiting to be paid back, including players we've already re-sold or let go. In the latter case, Bayern MĂĽnich are still waiting waiting for us to complete Vidal's payment.
Denis Suarez, Malcom are other examples of players that are not in the club anymore (Denis went to Villarreal, Malcom to at Zenit). Nonetheless, clubs are still waiting to be paid, no matter how long they have stayed at the club. The debt builds-up, more and more.
The problem with this is that the club has been using this methods too much, often because the players were "planned" to stay for longer periods. Most of the players, as mentioned before, had a contraxt for three or four years, thus harming the short-term.
The problem with amortization is that it's a short-term debt. That means money has to be paid back very quickly, per financial year (these end in June, for us). A perfect example to run away from this problem is the Arthur/Pjanic swap.
There was no high outgoing sale possible in the months before June, so the club swapped. As such, 70M were earned (Inflation of Arthur's "sale"), while the payment of Pjanic was pushed back to the next financial year (the one we're in and that ends in June).
We are still due to pay Braga for Trincao, Griezmann's bonuses to Atlético, Las Palmas for Pedri, even Liverpool for Coutinho and also Rey Manaj's former club. I think you get the idea: Lots of clubs are waiting to be paid back, some that are waiting over three years already.
With all this short-term payments adding up, we owe ~200M in the financial year to all these clubs - together, they combine a total of 21(!) clubs. 40M of these are for Coutinho's purchase from Liverpool. Generating the necessary money - 200M - is very hard in COVID times.
We also failed to reduce expenses. Most of you know how hard it was to reach a deal with players to reduct wages. Our revenues fell dramatically, while we also failed to reduce our expenses. With this said, you forcefully make huge unsustanaible losses in the future.
Even worse, not only did our amortization translate into a 200M debt that we will have to pay back in five months - but we also need to ask banks to delay the payment we owe. If you build it also up, we're at 400M debt in the short term.
That's not all. We already owe ~90M to banks like Goldman Sachs or Allianz - they've been asked to delay repayment, but obviously, that's just postponing the drama. A new president is needed for multiple reasons, but more importantly, lots need to be repaid and quickly.
It remains to be seen how we'll manage to get out of it - but as of now, if we combine short and long-term debt, we've reached the billion debt. Fairly concerning, given the uncertainty in the sporting planning - you earn move if you're the Champion or reach UCl semi-finals.
However the latter seems very unrealistic as of now. There were lies without surprise from Josep Maria Bartomeu who claimed Barcelona were doing well.
Thanks to @SwissRamble for lots of the data I used, and @fgarriga for showing the amortization amounts.
Thanks to @SwissRamble for lots of the data I used, and @fgarriga for showing the amortization amounts.
It's not about competing anymore, it's about survival. The fact is that we're seeking to not go bankrupt, and not about being champions. All your "Haaland to Barca" claims are no priority, but irrealistic dreams. End of thread.
