Why Barcelona's TV rights sell-off is potentially CATASTROPHIC

Paul Macdonald

• 22 Jul 2022 11:04 BST
• 4 min read

Barcelona have announced that they have sold an additional TV rights deal to investment group Sixth Street.

It has been a necessary measure, according to president Joan Laporta, to ensure the future of the club in the long term, and service the crippling €1.4 billion debt that has been accumulated in the past few seasons.

Let's break down the deal and explain why it has happened - but also what the longer-term ramifications are for the club.

Barcelona sell TV rights: Explained

Barcelona have sold off 25% of their La Liga TV rights for the next 25 years.

They did so in two separate transactions, firstly selling 10% for €207.5m.

They then sold an additional 15% for €320m, bringing the total transaction to €527.5m in exchange for 25% of La Liga TV rights.

So how much money is this? Well in 2020/21, Barcelona earned €166m from their La Liga TV deal, more than any other Spanish club, including Real Madrid (€163m).

In simple terms, and if we assume that the €166m stays consistent (it won't, but more on that in a minute), it would mean that the club would be paying €41.5m to Sixth Street each and every season for the next 25 years.

Across 25 years at a consistent payment, that would amount to €1.0375 BILLION paid to Sixth Street. Barcelona have also confirmed that there is a 'buy-back' option within the deal which would allow them to reclaim their portion of the rights at a future point. There is also the option to join a Super League if the competition is ever revived.

Barcelona sell TV rights: What we don't know

Of course, TV rights deals have a habit of increasing over time - ie over a decade, let alone 25 years. The idea that La Liga's rights will retain a consistent value over time is nonsensical.

Even if basic inflation is taken into consideration, then the deal would be worth far, far more to Sixth Street than just the €500m profit they are seeking to generate.

What we don't know, however, is if there are any conditions placed on the revenue that could be generated. There are unconfirmed reports, for example, that there has been a % cap placed on the growth of the TV deals, meaning if the amount generated reaches a certain point, the figure is capped on an annual basis, limiting the amount Barca would have to pay.

We also don't know the circumstances in which Barcelona would be able to buy back their share of the rights, but we know that it will not be favourable to them. Sixth Street are taking a risk in providing this money up front and therefore for Barca to extricate themselves from the deal, it's going to cost them.

So #FCBarcelona have now activated their second “economic lever” by selling another 15% of their domestic TV rights to Sixth Street for 25 years, taking the total to 25% https://t.co/hNRDaSeXUY

— Swiss Ramble (@SwissRamble) July 22, 2022

And it's also unclear what happens if Barcelona default on any of these payments. How is the debt called in? This is a situation Barcelona fans may not want to think about.

Barcelona sell TV rights: What about the debt?

This would be slightly more palatable if the money raised was being used to service the club's huge debt, but, of course, it's not.

The signings of Robert Lewandowski and Raphinha for a combined €120m show that this isn't the case at all. And with other targets still in line, the transfer budget for the summer is reaching unfeasible levels.

This is all before the current wage bill is taken into consideration - the Frenkie de Jong situation is ongoing simply because Barcelona need to reduce his gigantic salary.

So while Barcelona have money to do deals for the here and now, the entire project is short-termism at its worst - and it could have manifest problems for the club in the years to come.