“Levers”, the lifeline for debt-hit Barca

“Over the past few weeks, we and Sixth Street have engaged and collaborated with a shared understanding of what we are seeking to achieve for our organisation, and we look forward to our long-term partnership,” Barcelona president Joan Laporta is quoted as saying on the American company’s website. This was after agreeing to sell a further 15% of Barcelona’s La Liga television rights for the next 25 years on July 22. On June 30, Barcelona had agreed to sell 10% to the company.

Sixth Street’s website does not mention figures but the amount reported for the first sale is almost $210m and for the second $322m. There is no collective sale of television rights in La Liga. Barcelona, Real, who also have a megabuck deal with Sixth Street, Athletic Bilbao and the Spanish federation have gone to court contesting La Liga’s €2.75 billion bid to sell rights collectively to CVC, the equity and investment advisory firm, for 50 years.

Barcelona’s sale are two “levers”—the club is being called Levers FC in Spain—they have used to repay loans that had ballooned to $1.38 billion last August, according to Laporta, and go on a summer spending spree.

For a club that Laporta said in June was “practically dead in financial terms” Barcelona have spent nearly $110m on Robert Lewandowski, Raphina and Pablo Torre. Andreas Christensen and Franck Kessie have arrived on free transfers and they are far from done buying. Barcelona are said to be keen on Jules Kounde, Cesar Azpilicueta, Marcos Alonso and Bernardo Silva. In January, they got Ferran Torres and Pierre Emerick Aubameyang and Adama Traore on loan. The club has also agreed to a new deal with Ousmane Dembele.

“We have to strengthen to compete for all the trophies,” Barcelona manager Xavi has said. “At a club as big as Barca, you have to change a lot of things when you do not win trophies.”

Even as Barcelona are doing Xavi’s bidding—“football does not wait for anyone,” Laporta has said—they have reportedly asked Demebele to sign on reduced wages. Last year, Barcelona got players including Gerard Pique, Jordi Alba and Sergi Busquets to take pay cuts. The case of Frenkie de Jong’s deferred wages worth nearly $17.4 million continues to be a stumbling block to his transfer to Manchester United.

Julian Nagelsmann couldn’t make sense of it. “They bought a lot of players. I don’t know how,” the Bayern Munich manager said in USA recently. “It’s the only club in the world that doesn’t have money but can buy any player—it’s crazy to me.”

Based on revenue of the last five seasons, La Liga fixes a salary cap for each team. Barcelona’s huge debt also meant they could spend only 33% of what they earned on buying players. The cash injection from these deals and the reported $283.3 million sponsorship contract with streaming giants Spotify gives the club room to manoeuvre.

“Activating these levers will move us out of intensive care into a ward where we can receive more treatments, and soon leave the hospital,” Laporta said last month.

The money earned will let La Liga allow Barcelona to register some new signings. It is possibly not enough yet to register Lewandowski and Raphina and they may have to activate another lever: sell 49% of the company that has the club’s licensing and merchandising rights. Barcelona, according to reports, are hoping for $200-300 million from that.

The club is also trying to sell players or loan them. Having spent over $800m on 31 mostly ordinary signings between 2014 to 2020, Barcelona have been off-loading players since last year. Philippe Coutinho, Antoine Griezmann, Ferran Jutgla and Clement Lenglet have been either loaned or sold. But more needs to be done. Ricky Puig, Samuel Umtiti, Martin Braithwaite, Neto and Oscar Mingueza are on the sell list but to make good money Barcelona need to sell De Jong or either Pedri or Gavi.

Lack of fiscal prudence in buying players and massive wages are what got Barcelona to this place but because they are a super club, using academy graduates while books are got in order is possibly not an option.

So, like Shakespeare’s Bassanio, who claimed he would find a lost arrow by firing another in the same direction, Barcelona are seeking financial stability by taking new loans and spending on making a competitive team. Or, as pundit Gary Neville said on Twitter: “Selling future revenue streams to spend on players today in the “Hope” that it pays off! Rolling the dice stuff with the giant of a club.”