Joan Laporta must tackle Barcelona debt problem; Here are some solutions
The return home is complete. Once again, Joan Laporta is the president of Barcelona.
Laporta triumphed over candidates Víctor Font and Toni Freixa in last Sunday’s club elections, more than a decade since his last term between 2003 and 2010. In his second term, one of the goals will be to settle the total debt worrying club, widely considered to be above €. 1 billion ($ 1.2 billion), or precisely 1.173 billion euros ($ 1.4 billion), according to a report in El Mundo (Spanish) in January.
Have been Laporta’s 30,134 majority voters driven by the economy, or have they been swayed by the Catalan’s positive relationship with Lionel Messi, the magical man he desperately wants to keep? Maybe it was pure nostalgia. Laporta faced a golden age at Barcelona when Frank Rijkaard and then Pep Guardiola led the squad.
Either way, leading Barcelona in the 2020s will not be an easy task. The smiling new owner, however, is convinced that he can solve the financial conundrum. If it does, the following points might play a role.
Review of team expenses
Barcelona’s strategy for buying and paying their players needs to be rethought, and what better way to start than with a new president. The club was often not calculated in its recruitment.
Expensive purchases, namely Philippe Coutinho, are not worth it and are responsible for a heavy payroll. The club also owes additional transfer fees to various clubs with which it has already entered into agreements. Marca reports the combined cost is 126 million euros ($ 153 million).
As for Messi, releasing him – even for free – would ease the burden of his record contract. But Laporta wants him to stay for sporting and business reasons. He’s still a huge boost for the team and his image is inseparable from that of Barcelona, which means he’s responsible for much of his business value and earning potential.
Unfortunately, that leaves other tough decisions. The current transfer market has deflated, so Barcelona are unlikely to recoup large sums from selling players, especially given many of their strict release clauses, with a focus on negotiating pay cuts. within the team.
At least he has the academy, La Masia, which is a more enduring source of talent and has fostered the development of Óscar Mingueza, Ansu Fati and Ilaix Moriba to name a few. They bring hope for the future, especially in the context of a well-thought-out salary structure, which Laporta can help to implement.
Bet big on expansion
The club’s ambitious Espai Barça infrastructure project plays an important role in Barcelona’s economic position. It’s an expensive venture, which will ultimately cost around 1.25 million euros ($ 1.5 billion), including capitalized interest paid to major backers Goldman Sachs, the US investment bank that brought it in. lends money.
During a period of economic struggle, this seems like a risky, reckless deal. But the renovations started a long time ago and the club is not in a position to doubt.
Barcelona are expected to do annual repayments from the 2024/25 season, when he hopes to complete construction. If all goes according to plan, the long-term rewards are clear.
The Johann Cruyff stadium, which houses Barcelona B and the women’s side, has already been built, so one of the new goals is to modernize the Camp Nou and increase its capacity by 99,354 seats by around 6,000. In addition to generating more income when supporters return, it would become the only football stadium in Europe to accommodate more than 100,000 supporters.
In addition, the completion of a new 15,000-seat Palau Blaugrana arena to accommodate Barcelona’s other sports teams will help consolidate its profile as a sport rather than a football institution. Once the club start their loan repayments, Laporta will be confident of a steady increase in his income over the next few years.
Continue partnerships with the media
One of Barcelona’s main sponsors, alongside Nike and Beko, is Rakuten, the Japanese online retail company printed on its famous red and blue shirts. Barcelona earn 55 million euros ($ 65 million) from Rakuten each year and the current deal has been extended until June 30, 2022.
It is a dynamic relationship that diversifies the attractiveness of the two entities. Previously, TV productions starring Barcelona stars such as Messi, Antoine Griezmann and Gerard Piqué have been made available to Rakuten users.
It remains to be seen whether Rakuten’s contract with Barcelona continues, but in any case, exploring partnerships with media platforms is a way forward. Barcelona are present in this area, thanks to their Barça television service and the money made from broadcasting rights.
Laporta has already revealed his ambition to seek new sources of income to recover the club’s finances. Exploring streaming and online sponsorship offers is a possibility.
To become a more attractive proposition, however, the club have work to do on the pitch. It’s been almost six years since Barcelona won the Champions League and they are behind Atlético Madrid in the La Liga title race this season.