2023-06-16 08:00:17
BarcelonaThis season at Barça would have been very different had it not been for Joan Laporta’s stubbornness in strengthening the team. The president, contradicting the recommendations of the economic area, asked his fellow board members to trust him to activate the “levers” – the sale of assets – and thus get money to sign. “You are brave!”, he praised them at the introductions of the new players. In 2022 the club achieved 800 million and generated enough fair play to go out on the market and buy Lewandowski, Kounde and Raphinha, among other names. However, a year later, Barça is once again limited in its ability to sign and players such as Alba, Piqué and Busquets will no longer be in the squad. You have exceeded the salary limit. Because?
How does fair play work?
Barça complains that the League puts sticks in the wheels
He fair play financial or salary cap is used to determine a football club’s ability to make signings. All countries have a similar rule, but the Spanish League is more restrictive because the control is done a priori. That is, taking into account the following season’s budget. The limit is calculated by adding the revenue forecast and subtracting the management expenses. The resulting amount equals the money that can be allocated to the template. But this formula is only valid in economically sound teams. Those who have incurred large losses, such as Barça, have stricter control. At the Camp Nou, they have often complained about these restrictions and have accused the League and its president, Javier Tebas, of wanting to pull the trigger on them. But the employers have responded by saying that the rule is for everyone and that there are other clubs that also have to go through the address book. The spirit of the rule, they argue, is for those clubs that have had losses to focus their efforts on returning to the break-even point. Therefore, they are forced to use the resources to repay the accumulated debt before signing new footballers.
The importance of debt
Losses from previous years are subtracted from the salary margin
Barça has two key problems. On the one hand, the inherited debt. And, on the other hand, the salary cost of the workforce. Before the pandemic, the disproportionate increase in the salaries of some key players meant that the treasury was living on the edge. With the losses resulting from the covid – especially due to the income that it stopped having – it collapsed. Despite the fact that it has been two years, on an accounting scale those losses are still dragging on. The club estimated them at around 400 million and the League authorized that they could be prorated over five years. This means that, from the salary limit, Barça must subtract 80 million per season to clear the outstanding accounts.
Selling expensive players is not enough
The club has invested in new signings and increased the cost of the squad
The other workhorse is the cost of the template. That is, the sum of each player’s salary plus the amount to be amortized. Barça got rid of footballers who had a very high impact, such as Coutinho, Griezmann, Piqué and Jordi Alba, in addition to Busquets, whose contract was coming to an end. But in operations such as Griezmann’s, which led to losses because it was sold for a lower price than what was left to amortize, they have resulted in a negative balance that also counts in the fair play.
The matter does not end here. With the million dollar investment in 2022, the Camp Nou incorporated very expensive players, such as Lewandowski. In the 2023-24 season, the Pole will account for around 37 million in salary. In addition, the transfer of footballers such as Lenglet and Umtiti ends on June 30. In the eyes of the League, they count towards the salary cost of the season that is about to start and will only be subtracted if the club manages to find them a way out.
“Leverages” no longer work
The League has introduced restrictions to the regulations
Last summer the “levers” were activated. But this year they no longer make sense because the League has limited them. Barça can continue to sell assets, if they want, but they can only allocate a small percentage of what they get to signing players. Specifically, up to 5% of the ordinary line of business. This implies, in round numbers, that even if BLM – the company that manages Barça’s marketing – could be sold for an astronomical figure, it would only be able to devote around 35 million to increasing the fair play. The rest would be to wipe out the debt or for other investments, such as the stadium. Can Barça consider that it does not work out for them. And not only that: as of this year, the money is starting to be returned to the companies that acquired these assets. Therefore, 25% of what is received from the television rights and 49% of the Barça Studios business go directly to pay back the debt: less money to sign.
Exile in Montjuïc penalizes
The club will stop bringing in many millions
More things happen next year. And a very prominent one is the exile in Montjuïc. In the 2018-19 academic year, the last that could be done without the impact of the pandemic, Barça paid 220 million for the stadium concept. In other words, season tickets, tickets and visits to the museum. The Lluís Companys will hold half the number of spectators and the price policy for season ticket holders has had to be revised downwards. The entity figures at 55 million the money that will stop coming in, compared to a normal year, although the sources consulted by this newspaper increase the figure to 100. Either way, it is money that stops coming in in cash and, therefore, remain in the calculation of the salary limit.
The viability plan, half approved
Barça already knows that it will have to go to the market without the 1:1 rule
The club presented a feasibility plan to try to return to the 1:1 norm. In other words, stop being overpaid and be able to allocate every euro that was obtained by selling a player to be able to sign. But despite a very strong cut in ordinary expenditure, the League took into account all the conditions explained in this article and validated the proposal halfway: it only authorized the registration of the renewals of Gavi, Araujo, Roberto, Marcos Alonso and Iñaki Peña.
From here, to register signings such as Iñigo Martínez or Gündogan, the 40% rule will have to be followed (out of every 100 that is released from the wage bill, 40 can be allocated to signing), plus one 20% of a hypothetical sale if it generates a profit. It is for this reason that Barça could not present a firm offer to Messi. Taking as an example that Ansu, a player who is on the exit ramp, ends up leaving for 50 million, with the 1:1 rule the club would widen the fair play in about 60 million (50 from the sale plus 10 from salary); on the other hand, with the current restriction it would only amount to 14 million (10 from the sale and 4 from salary). An abysmal difference.
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