The financial loss Barca incurred keeping Messi

…Club was “technically bankrupt” – Laporta

The departure of the highest paid footballer in the world, Lionel Messi, from FC Barcelona in August was one of the many shocks during the 2021 summer transfer. Not many knew that Barca was running at loss for keeping the Argentinian football star.

While at Barcelona, Messi was earning a weekly wage of €1.36m (about €70.7m yearly). Amid other players’ emoluments, sustaining the pay led the club to financial crisis, especially with La Liga’s financial fair play rule.

With his departure, the club has disclosed its financial record for 2020/2021 football season, with a record loss of €481m ($558.6m). The report was made available to the club’s board members.

Although, the club is expected to make some profit as the season progresses, with the management of the Catalan club devising ways out of its economic woes.

Earlier in August, while briefing the press, President of FC Barcelona, Joan Laporta, stated that the club’s economic situation was dramatic, but assured that plans were in place to stabilise the club’s financial status, promising changes within two years.

According to the statement, Barca closed its financial year with €631m – a reduction in the budget target of €828m.

The club’s spending increased by 19 per cent during the 2019/2020 season, posing a figure rise from €955m to €1.136bn. These figures eventually led to a loss after the tax of €481m.

The 2020 turnover shows a 14 per cent reduction compared to the previous year and as the lowest since 2017.

Earlier in June this year, the board members of the Spanish club had assented to a €525m proposed debt refining package during its last general assembly. The assembly also approved the club’s financial record loss of €97m, due to the outbreak of the Coronavirus Disease, leading the club to a reduction of €203m on expected revenue.

Barcelona is preparing to take off its financial crisis with expected income of €765m for 2021/22 season, which is mostly ascribed to the reopening of the club’s sporting facilities and sales from matches to be played at home, and lastly its commercial activities.

Due to its operating cost, the club has forecasted €784m, reflecting a reduction from the recorded turnover of €855m for the financial year ended June 30, 2020. The club looks forward to a notable reduction (31 per cent) to its sporting wage bill, due to the departure of some players with high salaries and the new wage adaptation.

Barca generated only €60m from players’ sales and loan fees, including Griezman (€10m) and Messi, who left on a free transfer.

Making the official presentation of its financial status at the club’s complex on Wednesday, October 6, the Chief Executive, Ferran Reverter, said the clubs was“technically bankrupt” when Joan Laporta took over as president in March, and would have been “dissolved”had it been a public liability company.

The club will further sit for its general assembly by October 17.

Pelumi Bolawa
Pelumi Bolawa
Pelumi Bolawa is a content developer, writer, researcher and photographer. An intern at Financial Street, Pelumi is also a development administrator.

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