LaLiga: ‘Not worried about Barcelona’s financial crisis,’ says league president Javier Tebas as club inches towards bankruptcy

New Delhi: FC Barcelona are a mess, and that’s not because they are placed third on the LaLiga points table or their most storied player in recent history is likely into his last lap at the club. The Catalans are staring at potential bankruptcy, with surging debts, growing expenses, and little signs of fresh revenue streams.

A recent report in Spanish daily El Mundo puts Barca’s total debt at 1,173 million euros, of which 730 million are short-term. The club also owes 266 million euros to banks (ought to be paid before 30 June), and 196 million euros to other clubs for various transfers, including high-profile acquisitions of Philippe Coutinho from Liverpool and Frenkie de Jong from Ajax.

LaLiga president Javier Tebas, however, is confident that the league powerhouse will pull through. Allaying concerns raised by mediapersons in a virtual press conference, Tebas said that “debt doesn't mean anything” if the club’s revenue-generation capabilities are sound.

“If you look at the balance sheets of some of the biggest multi-national companies, there'll be thousands of dollars in debt. But debt doesn't mean anything if you have revenue… what is important is debt in relation to the ability to get revenue.

“I think Barcelona have a very acceptable debt-revenue ratio. It's great to say that Barca have a million in debt, but their net debt is way less. It would have been a problem if their revenue-generating capacity would have gone down,” he said.

LaLiga’s schedule, like most sporting events last year, went haywire due to the COVID-19 pandemic. The league suspended the season in March 2020 and action resumed behind closed doors in June, but the absence of gate money and in-stadia sales compounded the misery of bigger clubs such as Real Madrid and Barcelona. The Spanish clubs introduced pay cuts to counter mounting losses, and recent reports suggest that Barcelona – perhaps symbolic of global football’s financial woes – have not paid their players since December.

Tebas defended the club. “FC Barcelona have their method of payment. They don't pay monthly; they pay in January and June. Clubs like Real, Atletico and Barca have done pretty much what every big company around the world has done. They sent their staff back when there was no action, but now I guess most clubs have got their 100 percent workforce back.”

More than finances, Tebas reckoned the bigger concern for Barcelona is the absence of leadership. Josep Maria Bartomeu resigned from Barca presidency in October amid mounting public pressure, leaving a trail of economic chaos. His interim successor, Carles Tusquets, has limited decision-making powers. To top it all, he reportedly had an irate exchange of letters with presidential frontrunner Joan Laporta over the signing of Manchester City defender Eric Garcia, even as elections have been postponed from 24 January to 7 March.

“I think the bigger issue for them is to conduct presidential elections that have been delayed. It is important for them to have a chairman and executives to take decisions. Financially, they have over 700 million euros in revenue, the highest in the world. So, if I were to manage Barca with 700 million euros, that wouldn't be a problem. A lot of clubs in the world are worst-placed than Barcelona,” Tebas said.

“Big clubs like Barcelona are in heavy debts because they depend on revenues from ticketing and museums, something that they just couldn't generate last year. However, even in the case of Barca, the situation is not as bad as some headlines suggest. I believe your debts should be in line with your revenue.

“I think they (Barcelona) have a billion in debt, but they also generate among the highest revenues in the world. When the pandemic is over, I hope things will become easier for them. It has not been easy. The stadiums are empty, the museums are vacant, the sponsors are checking their contracts because there has been no exposure, and there' no denying the fact that all of this affects the clubs.”

Further, Tebas credited LaLiga’s economic reforms for softening the financial blow on smaller clubs. The reforms, introduced seven years back, purportedly aim to create economic parity among Spanish clubs to ensure a fair playing field.

“LaLiga's plan is simple, and it applies to all clubs,” the 58-year-old said. “The plan is to make decisions that are suitable to clubs, making sure the clubs spend maximum on wages while being in line with our economic control. These regulations have actually helped the clubs. A lot of people are wondering why Barcelona are not signing new players. Well, it is not because they don’t want to, it is because they have to adhere to certain economic regulations that are good for them in the long run. So, I would like to reiterate that the situation in Barcelona is not that bad. Yes, they have a debt of over a billion, but they also have revenues of 700 million euros.”

Contrary to Tebas’ assertions, reports in Spanish media suggest that Barcelona’s wage bill currently constitutes 74 percent of their income, while the league’s guidelines recommend a 70 percent cap.

Financial troubles aside, Spain are currently battling what experts believe is the third wave of coronavirus. On 27 January, the country recorded the daily coronavirus positive count of 15,660, while the total number of cases in the country is over 26 lakh. Tebas conceded that the situation is worse than what it was last year when the league had resumed after a three-month hiatus.

“The times are much difficult than what they were when we resumed the league last year. There's a new strain too and people are more vulnerable to catch the infection. I think the efficiency of our safety protocols and the way we have managed the league means that to date, we have not suspended any matches.

“Conducting matches in such a situation is very, very complicated. This week we had to change the protocol twice; the tests and safety measures have been ramped up. We are constantly studying the situation and adapting,” he concluded.

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