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).
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.”
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):
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.
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.