Finance

€190m wage cut, or bankruptcy - Barcelona's precarious financial situation

The coronavirus crisis has decimated the club's finances and there must be a drastic reduction or else severe consequences

 
5:15pm on Monday 2nd November 2020
By
Paul Macdonald

Barcelona are amidst a financial crisis.

The board must find €190m in the next week in order to stave off bankruptcy threats and moves are in place to find the funds from the first-team playing squad.

The players have been in consultation over a projected 30% pay cut across the board in order to ensure that the future of the club in its current form is secured for the remainder of the season.

Managing Committee Chairman Carles Tusquets said of the situation: “Our main concern is the cub's finances.

"The pandemic has affected Barcelona particularly hard. The club depends on tourism and now, all of that income has been lost; the situation is not very comfortable, we have to take on the ideas of the previous board to find a way of addressing the problems we are facing."

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Barcelona bankruptcy

How could Barcelona have possibly reached this point?

1) Coronavirus losses

Barca have lost a secure, regular income stream from visitors to the city buying merchandise and visiting the stadium. All of that is gone.

Furthermore, the broadcasting revenue has been reduced, and the gate receipts have been reduced to effectively zero, while it remains abundantly unclear where any fans will be allowed back in.

Both of these ongoing developments have left Barca with a gaping hole in their finances, despite topping the Deloitte Rich List for 2019.

2) Huge salaries

The reason why the squad have been targeted for a reduction in salary is because many of them are on huge sums of money, not least Lionel Messi, who, it is reported, collects in the region of €1m per week from the club before bonuses or image rights.

Luis Suarez, Ivan Rakitic and Arturo Vidal were already allowed to leave to remove them from the wage bill, but it's simply not enough. The cuts must go deeper, and harder, or else more serious ramifications will be felt.

3) Transfer mismanagement

Despite receiving €220m for Neymar, the club's transfer activities across the past five years is nothing short of disastrous. Numerous deals haven't worked out, and players have been purchased at a premium, while others were sold for a discount.

Barcelona's transfers - breaking down every bad deal as 1Bn is wasted

Ousmane Dembele, Philippe Coutinho and Antoine Griezmann cost in the region of 400m between them and none of them have provided any tangible performances on the pitch. It is this gross layout, as well as some of the smaller deals, which have led to this moment.

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