The current financial situation of FC Barcelona
The change of club presidency and the success of the Spanish national team recently in the World Cup 2010 have put FC Barcelona on the front page of newspapers all over the world. Unfortunately, it’s not always good news for FC Barcelona. As one of the biggest teams in the world, it seems that there are always debates and polemics between pundits and fans alike regarding the financial situation of football clubs. With the UEFA Financial Fairplay rule to come into in full effect in 2014-15 season, these issues are becoming more important.
There is a lot of confusion with the fans regarding the latest news from FC Barcelona’s vice-president for economic affairs, Javier Faus, who has exposed FC Barcelona’s huge loss last season. From the team in totalBarca, we have prepared a complete summary that shows why there is a big difference between Laporta’s report and the latest report from Deloitte. Find out more after the jump.
It is very important to take a couple of steps back and try to analyze the present situation with a better perspective starting with a little bit of background. The reason there are discrepancies between economic reports, especially regarding the clubs in Spain (compared to those in England), especially FC Barcelona, is because FC Barcelona is not an LLC but rather a club that is owned by socios. This means that usually all economic reports are for internal use and there is no obligation from the club to publish their financial reports to the public (which is contrary to LLCs and other financially obligated institutions).
Xavier Sala i Martin
Back in June 30 of 2010, Xavier Sala i Martin showed Laporta’s closing numbers before handing the club over to Rosell’s group with the following words: “It is a record in Barca’s history. 445.5 Million Euros are the biggest income numbers presented by any club in any sport in the whole world, not only football but also the rest of sports including North American sports like the NBA and Baseball. The club that has presented the biggest income numbers in the history of the planet is Barca this year.”
Javier Faus
Just about a month later, on July 27th, Javier Faus revealed the audit numbers: “Barcelona’s debt as of today is the biggest in the club’s history. That doesn’t mean anything but that we are not comfortable working with this debt. The current debt is the biggest in the club’s history, even greater than in 2003. The losses back in 2002-2003 in Gaspart’s era were the biggest in the club’s history at the time and on top of that the income that Barca has today is much bigger than back in 2002-2003. After explaining all this, I still prefer the club’s current picture.”
Here are the differences (in million euros):
| Category | Laporta | Rosell |
|---|---|---|
| Benefits | 445 | 408 |
| Expenses | 428 | 477 |
| Balance | 11 | -77 |
| Debt | 200 | 442 |
As you can see there is a difference of 88 million Euros. Here is why:
- Joan Gamper Sant Joan Despí land sale – 21.5 million. Only 1 million has been received so far. This money was not included as income by the auditor.
- Mediapro TV contract – 16 million were included from a deal with Mediapro where the club will get 4 million until 2013 for TV rights. Only 4 million were included by the auditor.
- Mediapro legal dispute – There is also a legal dispute with Mediapro where Barca would get 13 million back from them (in case of winning the dispute). The auditor only took 50% into account.
- Henry’s last year amortization value – 8.2 million – This was not included by the auditor since Henry will not complete his last year in Barca.
- Baena’s indemnisation – there is a legal dispute with Espanyol for this player’s transfer which could give Barca 3.9 millions (if Barca wins the legal dispute) – Not included by the auditor.
- Villa Decans lands – These lands were estimated to have a value of 17 million euros by a appraiser consultant hired by Laporta but the new management got this estimate from an actual certified appraiser who valued the land in 5.7 millions. Auditor included 50% of the difference between both amounts.
- Sogecable’s contract – there is also a legal dispute against Sogecable for TV rights that could give Barca 25 million euros back. – This was not included since Barca lost the first sitting of this dispute.
As some of you might also remember, there is also a big discrepancy regarding FC Barcelona’s total debt (in millions of Euros) between Barcelona AGM (30), Barcelona accounts (202), English media (350), and Rosell’s campaign (489) before the presidency changed. As explained in The Swiss Rambles blog, they are all correct in their account because in definition, debt can be broadly interpreted.
Two presidents, multiple differing financial statements
Regarding FC Barcelona’s current debt and newly taken loan, and the said temporary inability to pay player wages, I would like to just point out that with the recent change of regime, it is very common for the club to suspend financial activities as those activities must be taken into account for the current regime’s financial reports, and because of this the clubs withhold player’s salary. So this is merely an effect and had the €155m loan not taken, I am still sure that FC Barcelona could still pay their players.
FC Barcelona has gone through a lot of hardships, including financial catastrophes in the past from the times of Gamper to Gaspart, so I am sure with all the sporting excellence and improvement of club stature, economic excellence will come. It is only a matter of time before the current president and his team will publish more favorable economic reports.
So the question remains, what does the future hold for FC Barcelona financially? Most importantly, why does the current board choose to do their “dirty laundry” in public, exposing FC Barcelona’s debt to public? Is it merely an attack to the previous regime, to bring sponsorship to FC Barca’s jersey, or do they do it to show that they’re transparent to entice more investors to the club? What do you think as a reader and a cule? Please shoot out in the comments section below.
Sources:
- Lavanguardia.es
- Rac1 Radio show “Primer Toc” on Tuesday 27-07-10
- The Swiss Ramble
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It s actually a pretty good strategy to show the real numbers to the public as investors see
FC Barcelona as a good investment to put their money in.
As a fan you probably wanna buy original Barca products to support the club and like that they
So, good way to go and my new jersey is already ordered!
save millions in marketing as well
I agree with the second part of what you said. I will keep doing my tiny part financially to help the club. However, the first part of what you said might not necessarily be true. Obviously, first off, there's the issue of whose numbers are "true." Then there's the fact that investors might be less likely to invest if they see a losing product.
Either way, thank you Rakun for putting this together. I had hoped that the spectre of "shirt sponsor" wouldn't appear. That's something that had crossed my mind this morning…seems like an opportunity for Rosell to say it's financially necessary to sign a sponsor. I only hope that isn't the case. If it were, I'm afraid that "tiny part" I do in kit buying would have to come to an end.
I'm with you on shirt-sponsor. That would be a Baca jersey that I would definitely NOT buy…
I really dont see the problem in kit sponsor myself as long as its not some stupid massive bumble bee like vallodilid had years ago.i think its the future for barca and every club.the wages of the players have got out of control in a very bad way and if having a sponsor helps the problem im all for it.barca should be in the + not the -
Thanks to both of you guys for the comments. Btw, there is another point of view letter from Martin i Sala that tells his view of the reasons that Rosell's regime may have regarding these debt issues.. We will try to publish it asap, probably tomorrow.
Btw, I wonder how much debt would other clubs have if they follow Mr. Rosell's definition..
Shouldn't just publish the previous board's point of view and what they think is behind. If the previous board's speculation is presented then the current board's speculation and motivations and why they think the previous board did what they did must also be presented to give a balanced view.
That's what we always try to do here. Thanks for the pointers!
Thanks for this article, I've been wanting to find out about this whole financial thing. But I still don't get why Barca had to sell Chyggy, I believed in him and I thought he was going to be great along with Zlatan this season. It doesn't make sense that we need to sell him to solve our finance problem when we had like 50million to spend on transfers. I would have prefered Barca to use the money from the transfer budget instead of selling Chyggy.
Dont really understand what the board is upto… i believe all these are matters shouldn't be something to be discussed by the public.. i feel its just bad for the goodwill of the club.. if what they are tryin to show is a bad leadership of the previous board.. well, its not whats goin to happen.. its goin to affect the name of the club… its a shame to know tht Barca could not pay wages to its players… who did a lot for the club.. players like Messi, Xavi, Puyol, etc who have been in the club for their entire lives.. its nt tht if they dnt get 1 month wage its goin to affect them or their family… but it doesnt sound good… all these are internal matters which should be solved between the board, investors nd all… i dnt think anyone supports a team coz dey're more financially sound.. wat shud matter to the fans are the players, the coach nd stuff dat decides whether we win or not.. if the prev board have done something wrong… the present has to fix it than blamin each other.. in the end what matters is FC Barcelona.. not Rossell or Laporta.. nd for that matter Laporta has done a lot of good things for the club.. his term was mayb one of the most successful period for the club.. and anythin that causes a fight internally will be bad for the team… it'll definitely affect the name of the club, morale of players, etc. which we cant afford. nd obvsly, dey new board ws elected coz ppl thot they r capable of it.. so they just have to prove they r nd fix whatever is wrong… they should not put this topic for the public to discuss.. all dis might happen in other clubs… but we're not just a club.. we're more than a club.!
nd plss..!! no shirt sponsor!!! =) if we're actually more than a club like v claim to be.. we've to prove we're..
So what do you want.. Just inflate the profits and earnings of a corporation to un-realistic levels. Would this make you happy, rather than projecting the true picture as per standard accounting practices. Get real please
they dont have to do all dat.. all i'm saying is dey cud've jst kept this to themselves and solved internally than makin it an issue in public… its jst bad for the name of the club.. dts all i said
You have too if your club is really in trouble. How can you explain when suddenly your try to borrow 150M to pay salaries, sell back chaggy for half price and offer to buy Cesc for only 29M.
All that the indication Barcelona don't have money, and if the new president keep it quiet he will be blame for the downfall of the club.
How much are Barça's assets worth ? Thanks for the summary
i believed in him too i taught we could make a wicked cb partnership with him n pique for the future along with yaya at dm to help with their lack of speed we would have the best defence in europe but now both yaya and chiggy is gone and i will be very upset if they do not give the youth defenders a good amount of matches.i think one youth player atleast should play every copa match, one youth player every 3games for regular league and cl match mhm but whether they start or subed on thats up to pep. but i do not want to see another defender being bought or another midfielder bought unless its a senior citizen
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I personally can't stand Rosell's approach and style … he just consistently rubs me the wrong way. He seems to be the type that wants to make himself look good by pointing out how others messed up .. well. I want to see how many tittles we are going to win this season and if Pep will stay next year .. those are the numbers (and parameters) I am more interested in .. As a side, Barca is not a publicly traded company so we don't have to make our numbers public … And if he is so concerned about the FCB finances .. then for sure we don't need to pay 40 kilos for Cesc Fabregas, wait 1 year instead. Al loro !!!
guys dont worry .. Rossel will later publish a report after a few months to show that Barca debt is getting better .. so we will all think that he s done well economically .. it s just a game by this board ..i just cant stand rosell .. i hope to be wrong but i dont think he will succeed with Barca .. PEP also seems not to like him ..:S
I love you guys on the blog, you bring up all the current topics with such speed and investigation shit, thank you for everything!
I thought the contract with mediapro was for 150 milion euros yearly? Can someone explain how it is we are only getting 16 million? I am confused.I hope we get out of this rut. I want to hear a responce from Laporta cause I dont fully believe Rosell. I think he is bad for the club. I hope there is something in place to force him to resign if he carries on in this fashion.
It stinks ….
I get a very strange feeling about this new board, I dont trust them.
Its a way to tell Guardiola who he should buy and who he should sell.
They want the total controll back over the transfer pollicy…
This realy makes me think of the Gaspar an Nunes time are back.
Like they did with Cruijff that also is somthing strange.
They want to make Laporte look bad, because they know what he has won during his time is hard to beat !!!!
Dont trust those guys, and for me its a fact as long as Rossel is president I dont buy me a new membership card !!!!!!!!!!
And when I come to Camp Nou I will wave my white handcershif !!!!!
What is the point here..Iniesta.
in today's times of financial turmoil, it is always prudent to present a pessimistic view of your receivables (such as Mediapro etc) and also have a stronger/tighter definition of bad debts and disputes. If Laporta & Co has been able to fool the general public with his inflated view of assets and income, then it is a financial crime. Also it was Laporta that started off with the practice of paying the highest salaries in Europe. A fantastic brand such as Barca can pay the second best salary to its players (a Brand also has a notional value)
It is laporta who is at fault for this sorrt state of affairs.. Rosell is trying to present the fact as-is
yea right! Laporta did no such thing. Real Madrid started the trend of high wages.
stupid shit… whole Catalonia is behind Barcelona and whole city will be there for FC BARCELONA in every difficult economic problem.
I believe that Pep said that regarding Chyggy, he was also taken aback by the deal, because many would probably contradict his sayings last season that he "will not sell Chyggy". He said it's the board's decision and he couldn't do anything about it. Which is a shame, really.
Thanks for informing the readers about the current economic situation, lets just hope everything gets better as the years past..
Again, a good article from TB, but is only stained by authors' biased way to conclude the article.
Why do you brand the public announcement by the board as 'dirty laundry'? Why don't you brand 11ME profit announced by previous board as deliberate attempt to cover up their own mistakes and over-expenditure? Based on the article, that in their evaluation, the auditors didn't include the money that are not certainly owned by Barca (but was assumed Barca's by previous board). Examples are 3rd, 5th and the last point. Why did Laporta's board included this numbers when they closed their accounts? The money was not ours, at least not for the time being.
I'm not saying Laporta is bad, but again I want to stress that Sandro was elected voluntarily by the socis, and he got the most number of votes in history. You guys are not going to say most socis are blind and get easily deceived, yes? Sandro is not perfect, but so did Laporta. He was nearly got thrown out of the window in 2006, remember?
You guys keep endearing Laporta for the trophies won, but questioning Sandro his whereabouts when Barca was winning. But you guys forgot that the single signing that change the destiny of our club, the signing of Ronaldinho in 2003, was actually masterminded by Sandro.
You sound like Rosell bitch!! The guy clearly has motives to ruin the club. I can remember when Laporta said this guy wanted to sell ronaldhino so he could pocket 10million to seal the deal. I am very suspicious that this guy has a plan to sell Messi to Madrid or inter or Man city or chelsea to pocket some cchenge for himself. This guy is not to be trusted on any level. Laporta brought us trophies and this guy have done nothing but brougth the club grief in 1 month. He is cleary messing with finances so he can sell players to benefit himself and take power away from Pep. But let him carry on If he fires Pep or sell Messi he is finished!! and he should be investigated for whatever change he is pocketing.
LOL, what a reply. My post containing well known stories and real facts was responded with very mysterious conspiracy theories that warrant full scale investigation by the CIA.
I'm done with you here.
dont worry lad the hate of rossel in totalbarca is at max lvl. you were correct on all the spots in the previous post.
You know, the level of hatred and misunderstanding here is very bewildering. Level of ignorance too. Example: People keep cursing about Cruyff case, but at the same time they couldn't explained the significance and importance of the Honorary President title. Seriously, where on earth did all this hatred come from?
I understand that this article is very political, so author's point of view is subjective. And I stand by my case that regardless whether the extent of the debt is real or exaggerated, I still think it is "airing dirty lundry to public". There is no obligation whatsoever from the current regime to publish financial reports to the media. Because we're not LLC. Even when Real Madrid FC is "helped" by the state when the state bought their training grounds in a marked-up numbers, nobody really wrote about it. They just kept it to themselves.
If FC Barcelona is indeed in dire need of loans, then why is our previous bank loan debt only 30 million euros? Why do they need to take another 155 million euro loan, and declare it to the public? Why are they still trying to poach Fabregas who will reportedly cost us 45 million euros?
Regarding the financial report, Rosell's regime puts the cost of their regime in Laporta's cost, and intends to take credit for every penny that is still coming but guaranteed to come (such as in MediaPro contracts) because of the work of Laporta's regime.
Whether they intend to change the whole FC Barcelona system is still up in the air, but shirt sponsorship is not too far off right now, given the "unmistakable hardship" that FC Barcelona endures financially. I'm just writing stories from both sides of the arguments so that the cules and the website reader can decide for themselves.
Great job Rakun!
I too was disappointed to see Chiggy go too. It takes time to adjust, He was only 22. And was coming from not that big a club. His salary was not going to cost the club as much as Zlatan's. So you'd think common sense would be to have Zlatan go, if you really wanted to do the club a financial favour. However, it appears all the clubs have realised that we paid far too much for him and he isnt delivering, so why should they make the mistake and we are stuck. I believe Ibra also deserves a second chance but he came in with a reputation of a world class forward and didnt do a convincing job of showcasing it.
Sensible comments!
Yeh even though I wasn't convinced with Chiggy's display and therefore wasn't a big fan of his, I too frowned when I saw the way Chiggy was coldly offloaded by the new management; I could just picture Pep saying to him on the phone before saying goodbye to Chiggy: 'I wish I could do more to make you stay or help you do what I brought you here to do, but I'm afraid it wasn't up to me. And had you either been 1.) a Catalan or from La Masia or 2.) having previous Liga experience like Keita, Dani, or Sylvinho did, then maybe people would've had more "patience" with you, instead of giving you the short end of the stick.'
It does take time to adjust at a club not only as prestigious as this, but PLAYS like this. So Chiggy, regrettably, was given the short end of the stick, especially with the timing of this new management and the context of financial problem they're trying to present.
Could it just be… that since players like Messi, or Cesc when he was 15-19, Busquets, or Pedro, or even Yaya in 07-08, have been adapting to the top-level at seemingly lightning-fast periods, that we fans are subconsciously LESS patient with the likes of Chiggy or Zlatan if they have 3 average months, let alone an average season?
Being a foreigner doesn't help too, if you don't perform right away… not unlike the situation with all those very good Dutch players we had in the early '00's, when the Catalan media and our fans hammered them relentlessly, also showing very little patience.
With regards to the financial situation, this news depresses me to say the least. We all love this club for different reasons, but there are a few factors such as the UNICEF logo on shirt, the fact that it is owned by socios etc that are loved by all and that make this club distinct. It hurts when you think that after the last great decade we have had, we havent been able to tranform it into much profits. Lets hope the situation improves and it doesnt come at the expense of our philosophy and value system which is what makes us so unqiue.
Sorry if this sounds a bit doom n gloom, but maybe success and titles don't necessarily "transform into profits"… sustainably. I myself haven't made up my mind yet on this…
Maybe you can't have it all, and that "winning league titles and trophys will cost" is just the way things work: to succeed in 5 years time, you've gotta invest, invest, invest… early… (like the 2003-2005 period), resulting in huge expenses by the 5th, 6th or 7th year. On the other hand, to bring the club into surplus or near-debtless territory, spending on players and wages will inevitably have to be cut back, resulting in sub-par results.
In the next 5 years, if there's none or little silverware to be won, we can at least say we haven't won nothing over the past decade: pointing to the 6 or more cups that was won in the previous period, but knowing that it came at a huge financial cost!
And also reflect on the fact… that perhaps rarely do things worth attaining really ever come for free.
Also while we all love exposes, here it is getting a tad too personal. Maligning Laporta is one thing, but it is coming at a heavier cost: world over we are being cast as yet another struggling club. This news, according to me, hurts Barcelona's standing and while assurances are given the point is that if winning isnt enough then what more are the players and staff supposed to do?
its very interesting read. thx:D
Personally I Love Rosell so far. He has shown far superior business skills than his predecessor. With over 20% unemployment is Spain I'm glad to see someone advocating fiscal responsibility. For all you people hating on him he has only been here a month. Stop whining because he was voted as President in a democratic system.
During the past 1 month Rosell has managed oust Cryuff, unable to sign a long term contract with Pep, take decisions without taking the coach into confidence & showcase his predecessor as incompetant by publishing financial losses by changing accounting methods. It is evident the only good thing thing he has been able to achieve is signing Adriano. If his penchant for the Tabloid stays then dont be surprised if pep disappears next season and we start seeing pepsi/ Cola ads on Barca T-shirts. He is a heavy handed fellow and will do any thing to take reigns of Barca totally in his hands…………………..hope good sense prevails over management rather than Rosell or we are in for tough times ahead.
I so agree. Dont pay attention to this matyrze guy. He is clearly a madrid fan. Rosell is out to ruin Barca. You heard it here first. His begativity will rub off on the boys. I hope Pep repel him and win more titles for us. The guy even look like a crook.
I think we should all wait on a reply by Laporta or someone from his team. They have Barca and catalans best interest at heart. Rosell his all about personal wealth. I will trust the man who have brought us trophies and prosperity. I hope he becomes president of a free Catalunya.
I will just say "Completely Political", give it up Rosell, you're the top dog now.
what?!
Hitting out at Laporta, for sure
i saw some were ….Chygrysnky scored in his first match after his return to shakthar !!!!!!!!!!!!
is rossel trying to show that barca is in deep water and he's gonna be the messiah to save the world's best club??
and i really dnt like the idea of shirt sponsor… dnt forget we are "Més que un club"
I think that the shirtsponsor isn't a bad idea. That could give Barça a financial injection. I know I will have enormous bad comments, but I don't care. It's Barça that is important after all!
"the guy even look like a crook"? seriusly now? support the new president …… judge him when the time comes from his actions and not by hypothetical things guested by a crystal ball in your heads.
till now the guy showed the true numbers in our teams financial department and signed adriano cheap and behind the doors.for me both things were excellent.
most of people bashing him are laporta fanboys and thing laporta was a saint or something just because he was awesome on the sporting field and we won alot of trophies.chill we will win trophies with rossel too,we have the best team in the world.
rossel to sell messi…..seriusly? what else am i gonna hear ………………
The discussion about if Rosell is trying to change the apperance of the club's finances or not is utter rubbish.
Accounting is fairly simple. There are well established standards (IFRS) which all major corporations and organizations use throughout the western world. These rules try to protect both the owners (typically shareholders in LLCs but members in associations like FCB) and the government who can collect tax. Therefore, you're not allowed to over-inflate your profits (over-inflates the shareholders equity value), nor deflate the profits (hurts governments ability to collect tax).
What the auditor did was to follow the established IFRS standars. This can be seen on the deviations. Profits that were not certain (because they are still in court) were calculated at a lower value because of the uncertainty if they will be paid. The same goes for the land valuation – he tried to find the true value. This is all sound auditing work performed. Cudos!
What does that mean? It is clear Laporta's regime used an accounting method nobody trustworthy ever would use! Don't get me wrong. I'm neither pro-Laporta nor pro-Rosell, I'm just a fan of FCB and a professional in business and economics. It seems Laporta were trying to cover things up and wanted to present a good image of his tenure. I'm glad Rosell gave the true picture, even if it is also in his interest to show the previous management did not do a great job financially (at least the last year).
I'm worried about the long-term financial state, given the club's policy reinvest all profits into the squad. Maybe it would be better to try and build up larger bufferts or repay some debt. FCB pay looots in wages and we don't have a Saudi owner
I somewhat agree with Matyrze about the stained and biased conclusion. It is CRITICAL to have balance when you publish; you might not get the page-views straight away, the clicks or the eyeballs, let alone wild applause from your audience. What you surely will have, however, is *integrity* – something that subconsciously brings people back here, or makes them trust you.
Speaking of trust, I also have my big doubts about Rosell and don't trust him just yet, but let's look at what Rosell DOES… and over time too. Not what he LOOKS like, or that he "rubs me up the wrong way" or that he "feels creepy".
Reading those point-form differences of the 88-million Euros, you can't help but feel the Laporta team counted their chickens before they hatched. I would love it if they're right with the surplus estimates, but reality often doesn't work that way, especially in this post-global-recession era… where funding is hard to come by, and repayments are slow. If FCB depends on TV stations & companies that are also financially-strained to pay on time, then you'll have to factor-in the hiccups or missed-payments, if not worse…
My view towards Laporta's 7 years was excellent overall. It also helped that one of my country Australia's leading football TV analyst made a trip to Barcelona and conducted an in-depth interview in Laporta's office days before the 2009 Champions League Final, that resulted into a 25-min long Q&A on tv…. as well as introducing to Australian football fans the greatness that is La Masia. You can find these on youtube too, I think. But let's not conveniently-forget that he had his boardroom turmoils and mishandlings too, as well as near-death experiences at the poll… all not without good reasons.
Anyway, this whole discussion hopefully doesn't degenerate into one of those pro-Laporta, pro-Rosell, anti-Rosell debate; one that's as simplistic & dumb as George W. Bush's With-Us-Or-Against-Us argument on the issues his administration dealt with earlier last decade.
(and before somebody accuses me of bringing politics into this forum, thanks to a mere mention of a US President's name… you would've already realised it was only done to give the most well-known example, as an obvious comparison)
Please read my comment to martyrze. I still think that for whatever reason, it is called airing dirty laundry if you make press statements about discrepancies, debts, and what nots. I am just asking why. But thank you for your excellent comment too.
thanks for clearing up all this TB, financial stuff goes way over my head so its nice to have it explained
i expected a lot of rosell talk about finance as he couldnt critise the sporting aspect of the club so he had to attack laporta in another area. laporta did the same thing, although he attacked the football, financial, everything and rightly so! rosells whole campaign was run on what a mess laporta had made of barca's economics, but i just wish he didn't have to do it so publicly. with the EPL teams getting in trouble for their debt then they and the english media will gladly expose any slight problems with other clubs.
still i think its a sign of things to come as rosell is a media junkie so nothing will be kept with just us socios anymore, and for probably at least a year he is going to keep trying to tarnish laportas accomplishments.
Thank you samwise, I also wish that he didn't have to do it so publicly. Is it worth tarnishing FC Barcelona's image for whatever reasons he may have?
I shall try and give an account of what Barca financial position currently is:
1. Keep one thing in mind IFRS or not account can be interpreted in a lot of ways within a legal framework.
I first start by answering 2 things people are most interested in knowing,
(a) Whether Rosell has presented a transparent account which Laporta did not.
(b) Whether Barca is in trouble financially.
(a) The answer is NO. Rosell simply presented the financials in a different way. Simply put the reason for differential losses of around 88m euros is based on including contingent(may or may not happen) expenses and excluding contingent income. More than 50% of these additional losses come from payables to TV contract rights(contingent) and excessive depreciation/amortization (which is discretionary). So those accusing Laporta of financial indiscipline do your homework before u blame someone. Not that I support Laporta I am just a analyst.
(b) The answer again is No. Let me explain, an organization can be healthy as long as it does not has sustaining losses and shot/long term payment problems. Here the new accounts presented by Rosell highlighted the high debt obligations which includes atleast 50m euro of additional provisions which can be wiped off literally at will by giving mundane justifications and other anonymous figures of around 50 euros we dont know a jack about classified as trade creditors. Although this is common with any outgoing and incoming management that try to reveal the best and worst picture of accounts respectively by tinkering with subjective factors.
After a quarter I am sure u will see a better picture of accounts and a lot of praise for the new president of how he has turned a club around but u know its hoax cause it is as good now.
So dont worry people as our club is one of the biggest revenue generating clubs and with some smart financial decisions (Getting rid of under performing Ibra costing us 10.5m euros a year & Henry already gone i.e. 6.4m euro a year less) will put us with lot of money in our hands and reduce the dependence on loans although we want this or not is another issue. So cheers to good health of Barca!
I agree fully. I still however think Rosell is a crook and have some alternate motive like getting rich. If Barca was so much into debt why is he willing to let Marquez go for free? Why are we still holding on to Hleb and caceras when we can let them both go for 8m euro each? Why did we send back Buss on loan instead of selling him for what we can get like chiggy(which I think should never have been sold)? The guy is a crook to me and will never be trusted by me. But as a true Barca fan I will continue to buy jerseys and sopprt my team when I am in Spain.
You do have valid points to vindicate what u are saying but calling Rosell a crook would be going too far. The guy has made some foolish moves in the first month of service but I will not give up on him yet.
You answer (a) is full of it. If you truly are an analyst you would understand that firms like Deloitte must follow IFRS rules when it comes to auditing procedures. The accounting adjustments made by Deloitte are sound and its clear that the previous administration chose to inflate its profits to go out on a "high". I am pro-laporta, I think we will not have a better president (even tough I hope for one) but during the last 12 months Laporta only had his own political agenda on his mind.
Yes you are right that Deloitte has followed the IFRS rules, I never said they didnt and as I have already mentioned account can be interpreted in a lot of ways within a legal framework, the same Deloitte could have given you a different picture of accounts had Laporta employed them because thats what they do. Just as you say profits were inflated it can be said Rosell has taken an over prudent view to show a progressive picture in future and both ways are correct. I am just against the "throw mud in Laportas face" show he is running. "Mes un que Club Barca" thats what I support.
Actually Deloitte is the one auditing us before for the Money League, and I think we have our debt figures at about 200 million Euros..
Most big clubs have huge debts on paper, but if you look at the economical value of the club which by far exceeds the debts, they are still financial viable. All these rumours about debts, which suddenly are brought up in the media are nothing but a clever mediacampaign by the new president, to strengthen his own position by discrediting his predecessors!
First he disrespectfully brought up a discussion around Johan Cruyff, who was recently deservedly appointed as honorary president of the club by the former board. Johan Cruyff immediately responded by voluntarily giving up his new position and told he was no longer interested. Where was Sandro Rosell when former president Laporta was threatened with death for bravely standing up against hooligans, where was he when Cruyff inspired Barcelona to play attractive attacking football and inspired future generations of great players like Guardiola, Xavi, Iniesta and Messi. Where was he when FCBarcelona made an agreement with Unicef? Where was he when the board took the risk to sign Guardiola when he was still a relative unexperienced coach? Who is Sandro Rosell to discredit the people who made FCBarcelona the successful club, famous throughout the world for playing wonderful football with many 'homegrown' players and combining its success with charitywork.
The only positive and maybe intended effect which can come up from creating a negative image about the financial situation of the club is that it could bring down the amount of money which other clubs will ask for players in which FCBarcelona is interested.
Absolutely right!! I just hope for Barca's sake Rosell changes his "damn all" attitude and starts putting his efforts on continuing the good work Laporta did. There is no shame in following a succesful formula. If he manages to do that I will support him cause we need to stick togather at tough times and I thank Rakun for posting a great blog bringing a lot of information and meaningful dicussion. Thanx mate!!!
in addition to what some commenters have said about the getting back at laporta thing (lets face it, these 2 hate each other), i think maybe politics is also involved here seeing as laporta have plans in that direction. rosell counted on a lot of support from the old socios in his campaign, some of them dabble in catalan politics and have their own alliances, fact is more than a few hate laporta so to discredit him this way would really help some people's agendas. takes very little to see how info like this could affect the club's standing yet the board goesa head and talks, so kinda makes you wonder what the motives are exactly. true, rosell owes transparency to the club members and the authorities, but not the media, unless he also owed them something for past favors, like for their silence, for example.. just funny cos we seem to be the only club that willingly (eagerly?) talks about being in bad shape financially, lol.
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