La Liga has confirmed that Barcelona’s total spending this summer has risen by €800m. The astonishing rise has been linked to the massive liquidation of asset pursued by the club in the wake of the financial crisis that engulfed the club.
The figures revealed by La Liga may not be surprising to football analysts who followed up on the drama as it unfolded in the just-concluded transfer window. Barcelona President Joan Laporta manager Xavi Hernandez came together to take a bold step toward arresting the brewing financial crisis that had overtaken the club.
Two targets were on the radar. Barcelona needed to reinforce the squad after a disappointing 2021/22 La Liga campaign. They finished far below arch-rivals Real Madrid, losing the La Liga title. They also crashed out in the Champions League group stages and were bundled out of the Europa League by Eintracht Frankfurt, who went on to win the competition. Laporta and Xavi needed to re-strategize to weather the misfortunes by infusing fresh and brilliant legs into the squad.
Another ugly specter had to be obliterated – mounting debt and the La Liga Fair Play Rule’s threat. Barcelona was sitting on a huge debt estimated to be over €1b. Bringing in new players with the current debt profile will certainly bring them into collision with La Liga Fair Play.
The Spanish giants had to spend on the transfer market. Hence some of the club’s assets had to be liquidated as the safest navigable route between avoiding sanctions by La Liga and augmenting transfer spending.
The club’s General Assembly, the apex decision-making body, reached a resolution to sell some of the club’s assets to leverage over crippling debt and also fund transfer spending. On June 30, 2022, Barcelona announced that they had sold 10% of the club’s TV rights to Sixth Street, an investment firm, and have generated a capital gain of €267m for the current 2022/23 football season.
Also, the club announced that it had sold 24% of its in-house production to Orpheus Media, generating €100m in an attempt to meet La Liga requirements for its summer signings.
Barcelona made some heavy-sum signings in the 2022 summer transfer window despite the financial crisis. Robert Lewandowski was signed from Barcelona for €45m, Raphinha from Leeds for €58m, Jules Kounde €50m; Franck Kessie, Andreas Christensen, Hector Bellerin, and Marcos Alonso all arrived on a free transfer. Sergio Robert and Ousmane Dembele renewed their contracts with a resulting impact on the club’s wage bills.
Barcelona almost collided with La Liga with all the summer signings not being able to register for the La Liga due to a limited spending cap set by La Liga through Fair Play Rules.
Barcelona were able to register all of their new signings before the start of the La Liga except Jules Kounde, who was written later in the season. This was possible after the club successfully liquidated some of its assets.
The increase in the spending cap by €800 is not unrelated to the economic levers activated by the club during the financial crisis. It is a good development for the club. However, this should leave no room for complacency. The Catalans must keep an eagle eye on its wage bills to check on piling debts.
