Monday, November 29

Bartomeu’s Barça: improvisation, lack of control …

Improvisation, uncontrolled, lack of planning… “. With these adjectives the general director of the FC Barcelona, Ferran Reverter, the management of the previous board of directors chaired by Josep Maria Bartomeu. And this is what emerges from the ‘due diligence’ entrusted to Deloitte, which shows losses of 481 million euros last season and a equity hole of 451 million with a directive that he signed without knowing if he would have the money to pay. According to Reverter, who has had a meeting with economic means, the negative net worth will last at least five years. In any case, it highlights that Barça is a “resilient” club that has come out of many crises,

The accounting analysis will be followed in a few weeks by the publication of another report ‘forensic‘intended to determine if there are criminal evidence in the management of the club, he explained. The club is in a situation of technical bankruptcy, but has launched a viability plan that has allowed it to obtain financing for 595 million over 10 years and at an interest rate of 1.98% which, according to the manager, has attracted the attention of other European sports entities due to its conditions in the current circumstances.

According to the club’s top executive, the current board found itself not only in a technical bankruptcy situation, but also with difficulty paying payroll, the need for urgent refinancing, the limitation for the registration of new players and a precarious situation in both the stadium and from the sports city. Reverter claims that they imagined the situation to be bad, but not its magnitude. In fact, the entity has a total debt and future commitments of 1,350 million.

The analysis of the accounts reveals that in the 2016/17 season it was decided to change the liability accounting criteria, following the one set by LaLiga, which does not include debts with the administrations or with players, which madeand if it’s undervalued. In any case, it went from 159 million in the 2017/18 campaign to 673 million today, but with commitments to players and other liabilities it reaches 1,350 million because there are concepts such as the deferral of payment to players that rises to 389 million . The schedule for the amortization of commitments reveals that between March of this year and June 2022 the club will have to face payments of 470 million, 35% of the total debt.

Buying and selling

Investing in buying and selling of players was the main cause, with 306 million, as well as the works of the Barça space, which should already be finished and only 5% executed. The increase in indebtedness was carried out without requesting the authorization of the general assembly of partners. In the stage that began in 2016/17, three of the five most expensive players in history were bought. With 4 players, there is a debt of 1,400 million for four years, which represents an average cost of more than 300 million per year, he explained to demonstrate the level of liability acquired and that must be renegotiated.

Due diligence reflects a 61% increase in the wage bill in three years, 56% in management expenses yard600% in financial expenses by the way of operating and of doing it without planning. The contracts with players were made “at high prices” and with new remuneration concepts that increased future expenses. If following the same staff, the salary mass in the current season would have amounted to 835 million, 108% of recurring income. Despite the fact that the covid has had its effects, the losses for this concept were 43 million in the 2019/20 season and 65 million in the first nine months of 2020/21.

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The first initiatives of the current management team were to obtain a temporary loan of 80 million to cover the 90-day treasury obligations and the negotiation of temporary waivers with the main funders. In August, 595 million were refinanced with US entities, which have allowed reduce “very significantly the average cost of the club’s financial expenses“. The loan related to Espai Barça is also being renegotiated, waiting to be submitted to the approval of the shareholders’ meeting on October 17. At the same time, a general review of the project has been carried out.

The 2021-2026 strategic plan is aimed at increasing revenue, with the sale, for example, of 49% of Barça Studios and greater control of sports and management salary costs. So far it has managed to reduce the wage bill by about 155 million. It has also reached several agreements to dejudicialize the club and carried out emergency works for about two million euros “to solve structural pathologies in the stadium that did not allow the return of the members once the public restrictions due to the pandemic had ended.” Organizational structures are also being reviewed. Annual operating cash flow.

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