TA: Barca squandered Neymar sale money that could have improved their finances

The Athletic provided an in-depth analysis of Barcelona's financial situation, with football economics expert Chris Weatherspoon pointing out that Barcelona is burdened with huge debts, and reopening the Camp Nou stadium to meet payment needs is now urgent.

At a recent Barcelona members' meeting, a voting member admitted he completely misunderstood the financial report presented by financial director Ferran Oliver. Chris Weatherspoon, a football economics expert at The Athletic, echoed this sentiment when analyzing Barcelona's recent financial situation, describing it as "like facing a hydra" (the multi-headed monster in Greek mythology, whose heads would grow back after being cut off; Heracles ultimately defeated the hydra). Weatherspoon attempted to clarify and understand Barcelona's financial predicament.

The article points out that Barcelona's financial problems began with mismanagement after Neymar's departure. The €222 million Neymar transfer remains the highest player transfer fee in football history, and should have strengthened Barcelona's finances, but subsequent decisions only worsened the situation. Weatherspoon stated, "They not only failed to invest this money in the long term, but they immediately spent it all, even more."

The article states that the signings of Dembele, Coutinho, and Griezmann, along with Messi's four-year, €500 million contract extension, were the main factors contributing to Barcelona's rapid financial deterioration. The pandemic exacerbated the situation, with matchday revenue plummeting and the club forced to postpone payments totaling €389 million in player salaries.

At that time, the club began applying for credit support from financial institutions such as Goldman Sachs. After Laporta returned to power, the credit line increased further to €595 million. Coupled with an annual operating loss of €200 million and a €160 million devaluation of some players, Barcelona recorded a loss of €555 million in the 2020-21 season, arguably the worst financial record in the history of a football club.

To cope with the crisis, Laporta adopted a so-called "leverage" strategy, selling some assets in the short term to generate immediate cash flow. The most important move was the sale of 25% of the television broadcasting rights, valued at €667.5 million. This funding enabled Barcelona to complete the signings of Lewandowski, Rafinha, and Koundé, but also meant that the club forfeited a significant amount of long-term revenue. Chris Weatherspoon stated, "Even if the value of the La Liga broadcasting rights stagnates until 2047 (when the agreement expires), Barcelona will still have a potential loss of €1 billion from this deal."

Furthermore, the sale of a 49% stake in Barça Studios (now renamed Barça Vision) brought in €200 million. Weatherspoon noted that these operations (including the television broadcasting rights and Barça Studios) generated an accounting profit of €801.5 million in the 2022-23 season, but not all proceeds were received in cash. Moreover, due to auditors' recommendations, the book value of Barça Studios has been revised down from €401 million to €178 million. Despite operational profitability in the past two fiscal years, the club ultimately ended with losses due to asset impairment.

Experts believe that while the club's financial situation has improved with increased revenue, Barcelona still faces a severe debt problem, with total debt reaching €1.45 billion, the highest level in global football. Nearly €30 million in interest payments annually are dragging down the club's financial performance. Chris Weatherspoon stated, "If we add the €907.7 million debt from the Espaín Barça project to other smaller loans, the total debt comes to €1.45 billion. This figure will continue to rise as the Espaín Barça project progresses." Barcelona is gradually integrating the assets and liabilities of the Espaín Barça project into its financial statements, as some construction work has been completed.

The relocation to the Montejuchi stadium has also dealt a heavy blow to the club's finances, making a return to Camp Nou imminent. Chris Weatherspoon pointed out, "Delays will only exacerbate the financial impact. The Espaín Barça project cost approximately €1 billion, but this does not include the revenue lost by the club due to moving from Camp Nou."

The key to resolving the financial issues and repaying the loans lies in achieving the expected revenue after the new stadium is completed. Barcelona anticipates that the new stadium will generate €250 million more revenue each season than currently, a crucial sum. The article also mentions that the €424 million debt from the Espaín Barça project has been restructured, while the club continues to seek new revenue streams, such as friendlies. The article concludes, "It's too early to declare that Barcelona has fully recovered from the abyss of a few years ago."

Chris Weatherspoon believes that Barcelona should continue to adhere to its youth training model and avoid squandering huge sums on transfers, as this was the root cause of the club's severe financial difficulties over the years.