DBasia.news – FC Barcelona are still in the spotlight in the transfer market after bringing in Robert Lewandowski. Until now the Blaugrana have managed to have five new players.
Before Lewandowski arrived, Barcelona had signed Pablo Torre, Andreas Christensen, Franck Kessie and Raphinha. Torre was signed for 5 million euros from Racing Santander, Christensen and Kessie were free, Raphinha was signed for 65 million euros from Leeds United, and Lewandowski was brought in for 50 million euros from Bayern Munich.
According to Football-Espana, Barcelona is now the team that spends the most money in the 2022 summer transfer market in Europe. Barcelona spent 115 million euros, followed by Manchester City (108 million euros), Leeds United (105 million euros), and then Arsenal, Chelsea and Tottenham Hotspur.
What Barcelona did was quite surprising. How can a club that is in debt up to 1.3 billion euros purchase players? LaLiga president, Javier Tebas, was even skeptical of Barca’s chances of signing Lewandowski.
“The numbers are very easy, you have lost more than 500 million euros in the last two years, you have to recover it to sign players,” said Tebas some time ago.
“Lewandowski has one year left at Bayern, between what he wants to get and what Bayern want in return, I don’t see that at Barcelona.”
Nothing is impossible in football and sure enough, Lewandowski to Barcelona. Even Joan Laporta, President of Barcelona, insists the club transfer is not over.
“We want to make a competitive team, give Xavi the tools to have a good team and I think we are on the right track,” Laporta told Marca.
“I think (Director of Football) Mateu Alemany and (Sports Adviser) Jordi Cruyff are doing a good job. Now it’s time to work on defense. Xavi made us focus on a series of players and I hope the Catalans can be happier.”
Barcelona’s Risky Strategy
There are fears that Barcelona will return to the dark period of Josep Maria Bartomeu, the former president of Barcelona before Laporta. At that time, fans and clubs were spoiled by the arrival of big-name players, not to mention that Barcelona were spending money to recruit them.
Namely Philippe Coutinho, Antoine Griezmann, and Ousmane Dembele. Salary is too much. As a result, when Bartomeu stepped down from his post with controversy, Barcelona had a huge debt and became his legacy for the Laporta era.
Laporta, who had success in his first period in charge of Barcelona, slowly revived Barcelona. However, questions still arise, asking where Barcelona’s money is currently coming from when they have huge debts.
To begin with the implications of debt for a club of Barcelona’s caliber are quite different, especially when it comes to public entities. In 2021 Barca announced that they had successfully restructured their debt, around 700 million euros, from short term to long term.
Barca also received assistance from Goldman Sachs of 600 million euros, with a period of 5 years, they even helped finance the renovation of the club’s stadium in a 35-year plan (quoted from Reuters). The help made Barca somewhat financially stable.
In the span of 5 years, assuming the fans are back at the Camp Nou and money comes in from the game, Barcelona can slowly bring it back.
Not to mention the agreement between Barca and Spotify, plus other income from player sales, the potential for team success, all of which slowly provide stability for Barcelona.
But keep in mind also that all, plus the massive spending of Barcelona players at this time is a risky strategy. Like a gamble, Barcelona must achieve a certain level of success in Spain as well as Europe.
That way they can pay off their debts and cover their current big expenses. In short, Barcelona’s investment in players such as Kessie, Christensen, Raphinha and Lewandowski was made so that the club could return to success.
Debt can be covered slowly with smooth payments and while it is running, by digging a hole in the style of Barcelona, Barcelona must also be successful in Europe so that the same problem does not happen again.
The world is slowly moving on from the corona virus pandemic and starting to return to normal. There are many ways to make money for Barcelona, however, it must also be remembered that the way or strategy that Barca is currently doing cannot be done twice.
Ben Jacobs said that economic levers are a one-time solution. For example, if the rights to broadcast television are sold then it will be lost for 25 years and it cannot be sold again as a second solution.
Economic Levers and FFP Salary Limits
At this point it is quite interesting because basically transfer money and player salaries are two different things. Laporta has also often emphasized the term economic leverage to save Barcelona at the moment.
The first step of that economic lever was the sale of 49.9% of BLM, Barca’s company that handles licensing and merchandising, and that gave Barca 300 million euros. But Barca still retain control of the stock and the buyback option.
Then next is the sale of 25% of revenue from Barcelona’s LaLiga television in a period of 25 years. An agreement has reportedly been reached with Sixth Street, a US investment company, for 10%.
That brings in 207.5 million euros and negotiations are still ongoing with another company for the remaining 15%, which could give Barca another 400 million euros in income.
That’s what, according to writer at Barca Universal, Aaryan Parasnis, allows Barca to recruit players and register them. Tebas also once said that 500 million euros was enough to recruit and register players, according to FFP rules in Spain.
Wages
However, as Barcelona exceed their salary cap, they are sticking to the 1/3 rule where clubs can basically invest one euro for every three they save, in the event of a surplus like today with the use of economic leverage.
Rules that could allow for spending 1/4 of the money and this were relaxed a bit due to the pandemic. With that ‘help’, Barcelona aim to reach a point where their wage bill is directly correlated to the limited salary under La Liga rules.
In such cases, they are basically allowed to invest 1:1. One euro for each they save, as Barca maintain a recommended spending of no more than 60% of the club’s income on player salaries.
No doubt the performance of Mateu Alemany (Barcelona Sports Director) deserves appreciation. He is able to bring in the top players Xavi wants until Barcelona remains at Europe’s top level, the club can still find new sponsors and the revenue stream continues.
Player salary arrangements were changed in the Laporta regime. It’s no longer over the limit like Bartomeu, salary adjustments are now mandatory to reduce expenses when the club still has big debts.
The pandemic made the situation worse until clubs suspended or owed salaries to players as many team players received cuts of up to 70% of salaries so that Barcelona wouldn’t go bankrupt.
Gerard Pique, Jordi Alba, Sergio Busquets, Sergi Roberto, Samuel Umtiti are examples of players whose salaries have been cut. Dembele also received a 40% reduction from his previous salary after his contract was extended.
Barca have now reduced spending from the player’s salary by selling Philippe Coutinho and Antoine Griezmann, the two biggest earners. Plus several players were put on the list, have been sold, and returned to the club after loan spells.
The only dilemma right now is regarding Frenkie de Jong. The Barcelona midfielder is in demand by Manchester United and the two clubs have reached an agreement on a price, but the player wants to stay at the club, and so does Xavi.
The problem is that if he decides to stay until the transfer window closes, De Jong must want his salary to be reduced by Barcelona. No doubt it became a big dilemma.