Barcelona financial crisis deepens as LaLiga cut €300m from the spending cap.
Barcelona’s financial problems has worsened when LaLiga reduced its spending cap by another €300 million ($349 million),
allowing six teams in Spain’s top division to spend more than them.
The operational cost ceiling for the 2021-22 season has been lowered to €97 million,
almost €650 million less than Real Madrid, whose ceiling has been set at €739 million.
Last season, Barca’s budget was €382 million, up from €600 million the season before (prior to the epidemic).
The Catalan club’s restriction,
which is lower than that of Villarreal and Real Sociedad,
is due to losses of almost €500 million in the previous season, according to LaLiga corporate director Jose Guerra.
In a video chat on Wednesday, Guerra said,
“They admit significantly larger losses than what they had originally anticipated,
therefore the effect on their expenditure limit is greater.”
“We’re talking about €570 million if you take the €97 million cap and add the losses,
which are about €480 million. As a result, it is more or less steady.” Barcelona just announced €481 million in losses for the 2020-21 season.
Following an external assessment by PricewaterhouseCoopers,
this figure was approximately €200 million more than it previously anticipated.
According to ESPN, president Joan Laporta, who elect in March,
wrote down numerous assets in last year’s finances, including amortization payments owed on specific players, to
assist the club in return a profit this season.
As a result, the team anticipates a substantial rise in its expenditure cap next season,
but Guerra cautioned that previous losses will still be evaluated going forward.
However, Guerra said that owing to the pandemic’s unanticipated consequences,
Barca is not at risk of being penalized in the near term, but the league will need to see proof of COVID-19’s harm.
Despite their best attempts to lower it in the summer by allowing Lionel Messi and Antoine Griezmann to go,
Barcelona’s salary cost will remain considerably higher than €97 million this season.
Salaries and amortization payments still account for approximately 80% of the season’s expected income of €765
million, according to Laporta.
The league’s financial regulations require a number of approximately 70%,
but Barca’s is even lower this season as they try to make up for previous losses.
Meanwhile, the country’s total debt is estimated to be about €1.4 billion.
In the meanwhile, Barca will be limited to spending just 25% of the salaries they save or the transfer fees they
earn on registering new players or making acquisitions,
a condition they force to follow this summer.
Despite this, Guerra believes that the club could have retained Messi,
who departed for Paris Saint-Germain in August if they had really desired it.
Barcelona turned down the league’s offer to sell 10% of its company to CVC Capital Partners,
which would have doubled their maximum.
The deal was signed by 17 of LaLiga’s 20 teams,
with Madrid and Athletic Bilbao opting out.
“I believe there were options that might have kept Messi at the club;
the club’s administration chose to utilize their resources in a different way,” Guerra added.
“I don’t believe it was just a financial issue.”
Madrid’s maximum, which is currently over €500 million more than any other team in Spain,
has also been increased by the club’s choice to add over €200 million in past savings,
according to Guerra. That implies the club more than enough money to acquire Kylian Mbappe from PSG,
for whom they offered approximately €200 million in the summer.
“They wouldn’t have any issues at all,” Guerra added.
“They prepare to face Mbappe or anybody else.”
The maximum amount that clubs may spend on salaries,
bonuses and amortization payments on transfers is determined by LaLiga’s expenditure cap, not by how much
they are really spending.
Atletico Madrid (€171 million), Villarreal (€159 million),
Real Sociedad (€127 million), and Athletic (€111 million) have the highest ceilings in the league.
Valencia, however, the 2004 Spanish champions,
has the league’s lowest restriction. Los Che, like Barca,
have seen their debt balloon at an alarming pace during the epidemic, and can now only spend €31 million, down from €103 million a year ago.
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