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From bankruptcy to Lewandowski: how FC Barcelona bailed out its cash

Spreading out payments, sale of assets, contract with Spotify… Debted to the tune of 1.35 billion euros a year ago, FC Barcelona has reversed the situation and has become one of the most view of the summer transfer window of European football, notably by recruiting Raphinha and Robert Lewandowski. In March 2021, the club was “in a situation of accounting bankruptcy”, with an abysmal debt, cash flow problems and a huge wage bill, according to then Barça general manager Ferran Reverter who resigned last February. Today, Barça extended Ousmane Dembélé for two years, managed to attract Franck Kessié and Andreas Christensen for free, as well as Raphinha for 70 million euros, without forgetting especially Lewandowski for 50 million euros.

With 25.5 million euros brought in by departures against around 120 million spent on recruits, the balance is however negative by 94.5 million euros, a problem initially alleviated by spreading the debt. Barça’s biggest problem was not so much the debt, but its urgency: it had to repay it before June 30, 2021. But Joan Laporta, elected president four months before, and his management team negotiated with their creditors the smoothing of this debt over several years, a way of saving time. But part of it is not scalable, Barça had to take out a new loan from another bank, Goldman Sachs, for 595 million euros. The loan contracted with Goldman Sachs also allowed FC Barcelona to have cash to carry out the club’s day-to-day operations, such as paying late salaries, or making a few moves during the winter transfer window, such as the signing of Ferran Torres for 55 million euros.

But to gain even more cash quickly, the Catalan giant has started selling shares of its assets. The club thus sold 10% of the income from the TV rights of the Spanish championship to the American company Sixth Street for 25 years, in exchange for 207 million euros immediately. And the five-time winner of the Champions League plans to separate another 15% in exchange for 330 million euros. In the pipes for several months, the sale of 49.9% of the shares of its Barça Licensing and Merchandising franchise, approved by the socios (supporters-shareholders) in mid-June, could also pay off big. Finally, the sponsorship contract agreed with Spotify, which notably includes the “naming” of the future renovated Camp Nou, will bring in around 435 million euros for Barça. This is the biggest sponsorship deal in the club’s history.

But by selling assets over long periods in exchange for a large sum of money up front, Barca are burying the dust under the rug, and only pushing the problem away. However, it is still among the clubs that generate the most revenue in the world (582 million euros according to Deloitte in January 2022). Its capacity to absorb its debts is therefore established. And thanks to these new cash inflows, combined with a drop in payroll, the Catalan club hopes to see its salary limit raised in order to be able to register its new recruits with LaLiga. Because for the moment, Kessié, Christensen, Raphinha and Lewandowski cannot play an official match in the Blaugrana jersey.

From Ligt to Bayern

Still on the transfer window side, Matthijs de Ligt, Dutch central defender of Juventus Turin, will be transferred to Bayern Munich for a fixed amount of 70 million euros and an additional 10 million euros in variables, said the German daily Bild and the German sports news site Sport1. The two teams had already been in negotiations for several weeks over the young 22-year-old Dutch central defender. Over the past weekend, Bayern executive director Olivier Kahn confirmed those talks in an interview with Bild.

On the other hand, Australia, South Korea, Indonesia and Qatar are candidates to host the 2023 Asian Football Cup after China’s withdrawal due to the Covid-19 pandemic. , the Asian Football Confederation announced yesterday, which will announce its choice on October 17. Of these four countries, only Indonesia has never hosted this competition: Australia did so in 2015, South Korea in 196, and Qatar, which is organizing the World Cup at the end of the year, in 1988. and 2011. The competition, of which Qatar is the title holder, is organized every four years.

Source: AFP

Spreading out payments, sale of assets, contract with Spotify… Debted to the tune of 1.35 billion euros a year ago, FC Barcelona has reversed the situation and has become one of the most view of the summer transfer window of European football, notably by recruiting Raphinha and Robert Lewandowski. In March 2021, the club was “in a situation of accounting bankruptcy”,…

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