BarcelonaThe inheritance received and the strict economic control of the League are the two arguments used by Barça to justify the sale of assets. An action that the box office says is “totally necessary” to balance the numbers and be able to make a team with a face and eyes to compete for all the titles. The club has already sold 10% of the television rights of the League and will soon close the sale of the remaining 15%. The operation will be imminent and, as they explain at the Camp Nou, it could be this Thursday afternoon or Friday morning that the president, Joan Laporta, initials the contracts. Selling this asset means a rain of millions for the Blaugrana coffers, but it will also mean that they will stop bringing in a lot of money during the coming seasons.
LaLiga Impulse
Barça declined the agreement with CVC twice
Javier Tebas, president of the League, had put a lot of pressure on Barça so that the club signed up to the LaLiga Impulso project. In other words, to sell 10% of the television rights to the CVC investment fund for the next 50 years. However, Barça, who had already rejected the offer last summer – even if this meant giving up Messi – closed the door on CVC again and chose to negotiate the sale of the television rights on their own. The move went well for the club chaired by Joan Laporta. He secured an agreement that gave him a similar income (207.5 million in cash, 267 million at accounting level) but for half the time, 25 years. From a financial point of view, the move made it possible to balance the accounts of the 2021/22 season and close it with profits. And it also allowed the percentages of LaLiga Impulso to be avoided. That is to say, he could use the money to do what suited him, without the limitations (only 15% could be used for the staff) of that project signed by 39 of the 42 First and Second Division clubs.
Three levers
It only sells television and discards BLM and Barça Studios
The problem is that Barça’s debt was capital. Because of Bartomeu’s management, because of the effects of the pandemic and because Laporta, with the advice of Ferran Reverter, then CEO of the club, reformulated the accounts: devaluing the staff and making provisions for the pending litigations the club has. Therefore, the numbers were still in the negative and a second injection of millions was needed. One option was to get income from the sale of footballers, but pending whether the sale of Frenkie de Jong can be completed, the other exits are leaving few millions in the coffers. Thus, other avenues had to be explored. Which are, as Laporta called them in his day, the “levers”: television rights, BLM and Barça Studios. Of these, television will be activated imminently and BLM will be ruled out this year. On the other hand, that of Barça Studios, although the initial idea is not to sell it, appears as a wildcard that could be activated at the last minute.
15% of television
Barça pays 310 million to sign and clear debt
The sale of 15% of the League rights will follow the same pattern as the sale of the initial 10%. In other words, the same financial structure but changing the figures. At the treasury level, 310 million will enter the club’s coffers. And at an accounting level (for the balance sheet) they mean 400 million in capital gains. The Sixth Street fund also buys for 25 years and the club again makes a capital increase of more than 80 million to the third company that owns the rights. In the short term, then, Barça receives some money that it will mainly use to reduce debt and sign footballers. The debt corresponds, above all, to the famous deferrals he made with the players, since, during the pandemic, and as a result of the drop in income, the club had run out of cash to be able to meet some of the millionaire salaries of the footballers. Barça agreed, in some cases, on a salary reduction. But in others, a deferment to pay these outstanding amounts later. Money that is in the debt chapter and that the entity will pay in the coming months.
41 million less
Barça will no longer pay 25% of League rights
Selling 25% of the television rights means a shower of millions in the short term, but this income is not free. Basically because the club will now, and suddenly, receive the money it would have earned in the long term from the sale of these audiovisual rights. The example is best explained with the numbers in hand. This past season, Barça paid 165 million corresponding to the audiovisual rights of the League – not counting the Cup and Champions League, which are separate. In the future, during the next 25 seasons, Barça will continue to receive this money. However, since 25% will have already been sold to Sixth Street, he will no longer receive that percentage. Therefore, of the 165 million, 41.25 will go to the investment fund and the remaining 123.75 to the Blaugrana coffers. On the assumption that the television rights maintain the same value, it will mean that in 25 years Barça will have ended up paying Sixth Street around 1,030 million euros. Instead, the fund will have only paid in advance about 520 million, almost half. From the club they admit that the differential is very high, but remember that there is a risk factor assumed by Sixth Street: the forecast is that the rights will remain or rise, but if they go down the investment fund will be left without the profits that counted to have
The duties of the future
Balance the wage bill and reactivate pre-pandemic income
Beyond the economic “levers”, in the noble offices of the Camp Nou they recognized that it was necessary to cut spending to be able to deal not only with the signings of the present, but also with the uncertainties of the future. The fact that Barça will stop paying 41 million in the coming financial years means that, if the homework is not done, next summer the problems with signing up players will return and then there will be no assets left – or less left – to be able to sell. Mateu Alemany and Jordi Cruyff, the two visible faces of the football area, insisted on the importance of cutting the wage bill. This means establishing a new salary scale that is more in line with that of the big European clubs – Barça was, by far, the best payer for players – and, also, moderation in the price of signings to avoid amortization excessive Once expenses have been adjusted, and to compensate for the money that will no longer be received from television, Barça has set itself the goal for this 2022/23 season of recovering some of the pre-pandemic income that had fallen due to covid. This means, above all, the stadium – around 300 million were invoiced between match days, boxes, museum and catering – and also marketing. In fact, this last concept is key. As explained by the ARA, recovering the income from the sale of shirts – which correspond to BLM – would allow this company to be revalued if Barça finally has to sell it in the future to balance income.
The uncertainty of Espai Barça
The club will bill much less while in Montjuïc
Having sold the television and with the uncertainty of whether it will also be necessary to sell a percentage of Barça Studios, the club does not rule out that next season (2023/24) another asset will have to be sold, that of BLM. The reason is the construction of the new Camp Nou. In the future, this stadium will generate new income, but in the meantime Barça will have to do a year of penance in Montjuïc. Therefore, he will necessarily give up part of the 300 million that he can aspire to earn from ticketing this year. Considering that the club will have a high expenditure forecast – not counting possible signings – it is quite likely that this asset will have to be used to square the numbers. For this reason, BLM needs to be worth as much as possible and it is key to take advantage of this 22/23 season, and the impact of signings like Lewandowski’s, to maximize the value of the company. On the other hand, and once the works, valued at 1,500 million, have been completed, the club will have a world-class stadium and will significantly increase turnover. But, of course, he will have to return the loan to the fund that pays for the works – possibly Goldman Sachs. That is, a hundred million per year. At Barça, however, they claim to have done the numbers and say that, despite this payment, the benefits of the new stadium will be high enough for the operation to pay off.
