Financial Audit Reveals Losses for Barcelona
According to a new financial audit, Spanish champions Barcelona lost more than £64.41m last season, a figure that stands in stark contrast to financial records released by the team last year.
Accounting firm Deloitte carried out the audits for the new team president Sandro Rosell, who took over control of the team’s management board from Joan Laporta in June. Prior to leaving the club, Laporta had announced that the club was £9m in the black at the end of his management group’s mandate.
“The figures presented by the former board don't reflect the real image. They have cheated,” the club's vice-president for economic affairs Javier Faus told the Guardian. Faus explained that the gap between the two figures was a result of a difference in accounting criteria applied by Laporta’s management team. The financial loss is Barcelona’s first in seven years, however, given these past accounting problems, there is no way of knowing how accurate that claim may be.
Deloitte recently ranked Barcelona second behind Real Madrid in the latest ranking of the richest clubs by revenue. However, the new audit shows Barcelona's net debt to be £370 million, up from £275 million last year. This comes on the back of two particularly successful seasons for the team, which saw them win consecutive championships in La Liga, as well as the domestic treble in 2008-2009.
“There is a structural problem,” Faus told the Spanish press. “The sporting excellence of the past few years has not been reflected in excellence in economic management.”
The Catalan club may field some of the most entertaining and successful football, but the new financial revelations puts them squarely in line with other Spanish clubs struggling with debt and financial trouble. Many of La Liga’s clubs have plunged into the red following a deep national recession and escalating wage and transfer bills. Some, like Real Mallorca, have been forced into administration. A recent study by a University of Barcelona professor showed the extent of the problem, estimating that La Liga teams had a combined debt of €3.526 billion in 2008/09.
Of course, one of the problems plaguing the league’s smaller teams is the dominance Real and Barca have over television rights and revenue. Unlike the top-flight leagues in England and Italy, television rights in Spain are negotiated individually with each team. This means that this key revenue stream is distributed unequally, with Real and Barca pulling in close to half of the €600 million total generated.
Faus has cautioned that while the new financial figures reveal serious problems, both within the team and the league, the club is not bankrupt. Barcelona, he said, has “hidden assets” – such as its youth team and real estate holdings - that could be worth an estimated €250 million.
“We have the best player in the world, the best coach in the world, and eight players who are world champions,” he told the Spanish press. “So, this is not a dramatic issue.” Nevertheless, the team recently took out a €155 million loan to solve what it called “liquidity problems” after struggling to pay wages.
The team has already spent €40 million on World Cup hero David Villa this summer, but this cash was freed up through the sale of its “unhidden” assets. Defender Dmytro Chygrynskiy was sold to Ukrainian giant Shakhtar Donetsk for €15 million, while Yaya Toure went to Manchester City for €30 million. French striker Thierry Henry, meanwhile, was unloaded to the New York Red Bulls for an undisclosed amount.
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