Barcelona face €1 BILLION financial Armageddon

Karan Tejwani

Updated: 26 Oct 2022 20:10 BST
5 min read

Barcelona are out of the Champions League.

Their fate was confirmed before they even kicked a ball on matchday five, as Inter's thrashing of Viktoria Plzen in the early Wednesday game meant the Italians joined Bayern Munich in the last-16.

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It is a sporting and financial disaster for Barcelona.

The Blaugrana took big risks and activated economic levers – the sale of club shares for immediate cash against percentages of future profits – to sign players and it hasn’t paid off.

There was an expectation that they had to get to the quarter-finals of the Champions League to be in a stable financial position, and that hasn't happened.

Not even winning the Europa League would help them in that regard, and there could be further trouble for Barcelona from an economic perspective in the next few months.

Barcelona could be in financial turmoil again

Just earlier this month, President Joan Laporta announced at the club’s Annual General Meeting: “together we have saved Barca,” referencing how they were almost bankrupt about a year prior, but while things have slightly improved since, there’s still a bleak future ahead for the club.

Barcelona’s accounts this year went from a loss of €555 million to a profit of €124 million, largely due to the activation of economic levers, but those debts will be taken apart from the club’s future profits, which, over the space of it’s 25-year limit, will be a mammoth amount.

READ: Barcelona told to get finances in order ahead of next season

Over €1 billion will be taken from the club in that time period, but the club are adamant that this was better than the deal La Liga were offering them with investment firm CVC earlier in the year. In two separate deals, Barcelona have to pay American investment firm Sixth Street €414 million and €621 million.

The payment of those levers starts this year at an estimated €41 million-a-season from their La Liga TV income, and if those levers can’t go against the club’s profits, they have to be paid back in some way, and losing crucial Champions League revenue is far from helpful.

Last season, it was estimated that going out in the group stages of the Champions League in the group stages cost them €12 million, and that could rise further this season. Add in the fact that they’ve spent more this year and have higher wages to pay, and this could be a financial stranglehold on them as a club.

That means #FCBarcelona will pay more than €1bln over the life of this agreement, but financial vice-president Eduard Romeu said the deal was better than La Liga’s CVC agreement (8.2% over 50 years), as that had no buyback option and prevented the club joining a future ESL. pic.twitter.com/ENifXte6Ic

— Swiss Ramble (@SwissRamble) October 24, 2022

The Champions League hasn’t gone to plan for Barcelona – they took risks, activated these levers, signed players for big sums with the hope of having the performances to match it, but from the off, it hasn’t worked out.

Barcelona won’t go bust with this Champions League exit. If they win the Europa League in 2023, they will hail it as a great success, and then try to push to sign Lionel Messi, who is reportedly their top target, but the financial effects of it will be strong.

Laporta and his cabinet agreed to the financial levers because he wanted to give Barcelona a chance at making a mark in European football again. His ambition perhaps can’t be faulted, but he took a chance on the club’s future. He probably won’t be in charge in 25 years, but whoever succeeds him could just have their hands full because of him.

Read more about: UEFA Champions League, Barcelona