What Do Now??: Barcelona 2021-2022

rguilmar

Member
SoSH Member
Jul 16, 2005
1,610
Barca members board has approved the sale of up to 49.9% of merchandising (excluding the current Nike deal) and up to 25% of the television rights. It looks like the TV rights are from domestic games only, not Champions League and so on. Exact figures, who the buyers are, and how long these deals are for haven't really been disclosed. These deals will bring in 600-800 million euros allowing them to turn a profit for the 2021-2022 and possibly restore them to "normalcy". It will depends on some of the deferred payments, the exact sale prices, and when the money come in. At the very least they should be able to get to a 1:1 ratio in terms transfers.
 

rguilmar

Member
SoSH Member
Jul 16, 2005
1,610
I don’t have an account so I can’t read that article, but there two issues facing Barca. One is tied to the debt and is restricting transfer activity (either 4:1 or 3:1 in out:in transfer activity), and the other is wages. My understanding is that these measures by the Board go towards addressing the debt and opening up transfer spending.

Signing players to new contracts is a separate issue as there is a salary structure of sorts. I don’t want to call it a salary cap, but in general a club can only have a certain percentage of their revenue put towards wages, which is why Valencia has to sell over 30 million Euros in players to balance the books for 2021-2022. Barcelona’s problem here is that they restructured contracts in 2021-2022 that lowered wages for some players that have built in increases in 2022-2023. On top of that, by selling a portion of the tv rights for cash now will also result lower revenues. These La Liga rules apply to all teams and are not a punishment for Barcelona financials like the limits on transfer fees are.

So to buy Lewa for, say 20 million Euros, Barca in theory now would need to sell 20 million Euros worth of players (or similar savings) instead of the 60-80 million Euros. Actually signing him to a contract and registering him however is a different beast.

This is my understand based more on reading reports out of Spain. Of course I’m relying on the Spanish and the very little Catalan taught to me years ago by my grandparents so I’m not well equipped to completely understand everything. Things will be lost in translation for sure.

Right now though, we can’t draw any definitive conclusions because we don’t know much about the actual deals. I would expect the Board was in contact with La Liga about the necessary measures to ensure that they would go far enough in addressing the debt prior to bringing it before the Assembly for a vote.
 

67YAZ

Member
SoSH Member
Dec 1, 2000
8,730
I don’t have an account so I can’t read that article, but there two issues facing Barca. One is tied to the debt and is restricting transfer activity (either 4:1 or 3:1 in out:in transfer activity), and the other is wages. My understanding is that these measures by the Board go towards addressing the debt and opening up transfer spending.

Signing players to new contracts is a separate issue as there is a salary structure of sorts. I don’t want to call it a salary cap, but in general a club can only have a certain percentage of their revenue put towards wages, which is why Valencia has to sell over 30 million Euros in players to balance the books for 2021-2022. Barcelona’s problem here is that they restructured contracts in 2021-2022 that lowered wages for some players that have built in increases in 2022-2023. On top of that, by selling a portion of the tv rights for cash now will also result lower revenues. These La Liga rules apply to all teams and are not a punishment for Barcelona financials like the limits on transfer fees are.

So to buy Lewa for, say 20 million Euros, Barca in theory now would need to sell 20 million Euros worth of players (or similar savings) instead of the 60-80 million Euros. Actually signing him to a contract and registering him however is a different beast.

This is my understand based more on reading reports out of Spain. Of course I’m relying on the Spanish and the very little Catalan taught to me years ago by my grandparents so I’m not well equipped to completely understand everything. Things will be lost in translation for sure.

Right now though, we can’t draw any definitive conclusions because we don’t know much about the actual deals. I would expect the Board was in contact with La Liga about the necessary measures to ensure that they would go far enough in addressing the debt prior to bringing it before the Assembly for a vote.
The key points from the article to add to your description (which largely comports with the reporting): the Board needed to go to the Socios in order to get approval to finalize these deals, that why all this info is now so public. The deals aren’t done, and outside analysts are somewhat skeptical of the numbers that have been floated, suggesting that the actual value may end up being half. There are key financial reporting deadlines for La Liga coming up on June 30 and July 31, so there is intense pressure to get these deals done ASAP while also negotiating transfer moves on the continent belief that these deals will come through. Of course, this gives the media rights bidders and other clubs significant leverage over Barca. Stressful times at Camp Nou.
 

Mighty Joe Young

The North remembers
SoSH Member
Sep 14, 2002
8,401
Halifax, Nova Scotia , Canada
I don’t have an account so I can’t read that article, but there two issues facing Barca. One is tied to the debt and is restricting transfer activity (either 4:1 or 3:1 in out:in transfer activity), and the other is wages. My understanding is that these measures by the Board go towards addressing the debt and opening up transfer spending.

Signing players to new contracts is a separate issue as there is a salary structure of sorts. I don’t want to call it a salary cap, but in general a club can only have a certain percentage of their revenue put towards wages, which is why Valencia has to sell over 30 million Euros in players to balance the books for 2021-2022. Barcelona’s problem here is that they restructured contracts in 2021-2022 that lowered wages for some players that have built in increases in 2022-2023. On top of that, by selling a portion of the tv rights for cash now will also result lower revenues. These La Liga rules apply to all teams and are not a punishment for Barcelona financials like the limits on transfer fees are.

So to buy Lewa for, say 20 million Euros, Barca in theory now would need to sell 20 million Euros worth of players (or similar savings) instead of the 60-80 million Euros. Actually signing him to a contract and registering him however is a different beast.

This is my understand based more on reading reports out of Spain. Of course I’m relying on the Spanish and the very little Catalan taught to me years ago by my grandparents so I’m not well equipped to completely understand everything. Things will be lost in translation for sure.

Right now though, we can’t draw any definitive conclusions because we don’t know much about the actual deals. I would expect the Board was in contact with La Liga about the necessary measures to ensure that they would go far enough in addressing the debt prior to bringing it before the Assembly for a vote.
One of the points the Athletic article makes is that , because of La Liga rules , and the situation Barca has with its debt ,there is a 3:1 ratio for Outs vs Ins. That is , if they want to buy Lewa for 30m they would have to sell 90m worth of players.

Which, outside of FDJ and Gavi , is highly unlikely. They are basically utterly screwed until they get the payroll down.

This is because, besides the club’s historic debts, the squad’s ongoing salary bill remains way out of control. Barcelona’s total wage bill in 2020-21 (with Messi, Antoine Griezmann et cetera) was €617 million. Their budget for wages last season was €470 million, but in the end, the total came out as €90 million more than that — €560 million.

Romeu said last week that, ideally, the figure for next season should be €400 million — similar to that of 2021-22 La Liga and Champions League winners Real Madrid. La Liga’s next calculations, based on figures Barcelona say they will submit by the end of July, may mandate even bigger cuts.

The easiest way to lower your wage bill, and what happens at most clubs, is to sell a player, or multiple players. And Barcelona currently have a full XI of first-team squad members who Xavi is not counting on for next season. The problem is that Samuel Umtiti, Martin Braithwaite, Miralem Pjanic, Neto Maura, Clement Lenglet and company do not have much of a market, and are generally happy with their current lives, and hefty wages, in Catalonia.

Barcelona have made some progress this month, selling youth-team forward Ferran Jutgla to Belgium’s Club Bruges for €5 million. They could raise similar sums for squad players Oscar Mingueza and Riqui Puig, but this would not add significantly to the coffers, or make much difference to the wage bill.

A complicating factor is that, under La Liga’s rules, clubs who have broken their salary limits in previous seasons must devote the majority of any money raised to paying off existing liabilities.

La Liga president Javier Tebas reminded everyone this week of his organisation’s rule of one-to-three for teams in this situation — “If Barca sell players for €100 million, they can spend €33 million on new players,” Tebas said.
 
Last edited:

kenneycb

Hates Goose Island Beer; Loves Backdoor Play
SoSH Member
Dec 2, 2006
16,090
Tuukka's refugee camp
The selling of the rights is the ultimate “short term shore up finances move that’s going to screw us down the road” move, right?
 

rguilmar

Member
SoSH Member
Jul 16, 2005
1,610
The key points from the article to add to your description (which largely comports with the reporting): the Board needed to go to the Socios in order to get approval to finalize these deals, that why all this info is now so public. The deals aren’t done, and outside analysts are somewhat skeptical of the numbers that have been floated, suggesting that the actual value may end up being half. There are key financial reporting deadlines for La Liga coming up on June 30 and July 31, so there is intense pressure to get these deals done ASAP while also negotiating transfer moves on the continent belief that these deals will come through. Of course, this gives the media rights bidders and other clubs significant leverage over Barca. Stressful times at Camp Nou.
From what I can gather, they need some of these funds prior to 6/30 in order to balance the books for 2021-2022. Only one of these proposed deals would need to be agreed to by then, not both. The club seemed to hold out hope that they could do so without selling assets, but clearly that isn’t the case now.

One of the points the Athletic article makes is that , because of La Liga rules , and the situation Barca has with its debt ,there is a 3:1 ratio for Outs vs Ins. That is , if they want to buy Lewa for 30m they would have to sell 90m worth of players.

Which, outside of FDJ and Gavi , is highly unlikely. They are basically utterly screwed until they get the payroll down.
There really seems to be some gaps in the reporting here. The 3:1 ratio is a punishment for past spending but should revert to normal once the finances are back in line with La Liga rules. To oversimplify it, in American sports teams are punished for spending over the salary cap (draft pick, tax, whatever) only for seasons that they are over the cap. Once they go back under the punishments cease. The same is true in Spain, just that the “cap” for each team varies depending on projected revenues and that teams are held to account at the beginning of the season, unlike in the US where it’s handled mostly at the end of the season. Teams unable to hit projections then are punished with transfer restrictions. In Valencia’s case, they budgeted for an additional 30 million plus euros in revenues coming from player sales for 2021-2022. If they don’t sell players soon, then they too will end up with transfer restrictions.

Now, if the reporter is saying that Barca will have an unbalanced financial projection for 2022-2023 and will therefore still face transfer restrictions, that is something different. I guess I haven’t seen enough info about the deals to draw any conclusions from it. My assumption is that these deals do address the shortfall in 2021-22 and balance the books for 2022-23. Otherwise, why make the deals, specifically the TV rights? Overall I’m finding reporting on this to be full of unwarranted certainties. One reporter says this solves the problems, and another reports that it essentially does nothing. The fact is that we just don’t know the details of these deals. Like even the basics- the buyers, what they are getting, what Barca will receive, how long the deals are for. Again, to me there is no point to selling 25% of the TV rights unless this drastically improves the financial outlook, but I say that without knowing most of the details.

The selling of the rights is the ultimate “short term shore up finances move that’s going to screw us down the road” move, right?
Yes and no. We don’t know how long the deal is for and what specifically is included. Solid financial planning should limit the “screw us down the road”, though Barca have shown a penchant for doing the exact opposite of “solid financial planning”. One thing I’ve been slowly understanding through this process is just how massive mega clubs like Barcelona are. I mean, they look to be quickly raising around half a billion euros without selling any portion of the club, without hitting up the Culés for an infusion of cash, without bringing on more members. They in essence are mortgaging ancillary parts of the club to solve a short term problem.
 

67YAZ

Member
SoSH Member
Dec 1, 2000
8,730
Barca get one deal done today, deadline for some of La Liga’s financial accounting. The Athletic reports they’re selling 10% of their La Liga TV rights for 25 years to a US firm called Sixth Street Partners for €267m. A lot of projected numbers were thrown around, but this seems above average valuation based on various reported assessments.

Laporta is trying to raise €600m, and the socios approved the sale of up to 25% of the TV rights and 49.9% of the merchandising.
 

rguilmar

Member
SoSH Member
Jul 16, 2005
1,610
This had to get done in order to balance the books for 2021-2022. Now it’s a matter of the 2022-23 budget and wages. I imagine they’ll hold off on any other immediate sales until they have a better idea of the funds necessary. Laporta had indicated there would be multiple TV rights deals, and also stated that the sale of some of the licensing and merchandising would likely have taken place anyways. Many skeptics had questioned Barca’s valuation and how much they could actually raise, but this initial deal backs up the numbers Laporta promised when getting permission from the socios.

Sixth Street Partners have a history in doing business with La Liga teams, most notably Real Madrid.
 

Zososoxfan

Member
SoSH Member
Jul 30, 2009
9,209
South of North
Spurs reportedly have asked about Lenglet. TM has him valued at $12M (E) and he's owed $30M (E) over the next 4 years. At those numbers I think Barca will absolutely sell him for 12M since he's not even necessarily a starter, sitting behind Araujo, and Garcia, Mingueza, and Pique still on the squad. Umtiti is there too, but he's almost assuredly gone as well. Who knows re Christensen.
 

rguilmar

Member
SoSH Member
Jul 16, 2005
1,610
I’ve been working under the assumption that Laporta knows what needs to be done to get them registered. Either enough has been done or he has been in touch with La Liga enough to know what needs to be done in terms of the sale of assets and trimming of salaries to get them registered.

For Laporta, this is a legacy thing. He’s a Catalan and believes in the role Barca play in Catalan society, and he wants to go down as the man who saved Barca from itself. And he knows the price to him, his business, and his legacy if he makes matters worse. Presenting players he can’t sign certainly won’t help him.

I could be wrong, obviously, but so far his valuations have been spot on despite what the naysayers have said. He seems to know what he’s doing.
 

Zososoxfan

Member
SoSH Member
Jul 30, 2009
9,209
South of North
I’ve been working under the assumption that Laporta knows what needs to be done to get them registered. Either enough has been done or he has been in touch with La Liga enough to know what needs to be done in terms of the sale of assets and trimming of salaries to get them registered.

For Laporta, this is a legacy thing. He’s a Catalan and believes in the role Barca play in Catalan society, and he wants to go down as the man who saved Barca from itself. And he knows the price to him, his business, and his legacy if he makes matters worse. Presenting players he can’t sign certainly won’t help him.

I could be wrong, obviously, but so far his valuations have been spot on despite what the naysayers have said. He seems to know what he’s doing.
Oh I absolutely agree and I think Laporta is hugely beneficial to the club. No one's perfect and he certainly has many serious faults, but I agree with your assessment that he's leading the dig out of the Bartomeu hole for the club.

Lenglet should be signing for Spurs on loan soon, and there's already some smoke for Braithwaite to the EPL for around $8M (E). Dembele signing a new contract doesn't look great, and last I heard Gavi's deal is not signed yet although that may just be because he's still a minor and the club want to extend him for 4 years if you believe Laporta.

Finally, Barca are starting to reverse course and are saying that FDJ will stay. I think they likely want him gone for the money savings, but MANU is balking at the asking price. So I think this is just a case of Barca posturing and the deal is more than likely to go thru, but I would be thrilled if Barca tinker with a 4-2-3-1 next season with FDJ-Kessie as the double pivot:

MATS
Alba-Araujo-Pique/Christensen/Garcia-Dest
Kessie-FDJ
Fati-Pedri-Torres
Depay/Auba

Also, just looking at Barca's TM page, I didn't realize Trincao, Pjanic (at the Disco), and Collado had returned from loans. The first two will likely be sold/loaned again.