Barcelona are addicted to spending – their day of reckoning is finally coming

Spanish giants’ response to their dizzying debt has been very ‘big club’ – refusing culpability and throwing more money at the problem

There can be no doubt that Barcelona threw everything at Uefa when it came to the defence of the fresh pile of debt that the club accrued in the summer of 2022, and then sought over the next two years to claim it was something entirely different.
Over the space of three weeks in summer 2022, Barcelona agreed to sell 25 per cent of their domestic television rights income for 25 years to the US investor Sixth Street for 667.4 million euros (£555 million). A vast deal approved by the club’s board to shore up current-day spending in return for a legacy of even greater indebtedness. A commitment of a quarter of the club’s key revenue stream for so long that by the time the obligation expired, Lionel Messi would have passed his 60th birthday.
Then the hardest part: convincing all concerned that this was simply a commercial windfall like any other. Just about all the key institutions disagreed. First the Uefa financial control board, and then its auditors PricewaterhouseCoopers to whom Barcelona initially sent only redacted financial results – missing the key point of an audit. 
Soon the Uefa adjudicatory chamber would also disagree, and then its appeal board and finally, the Court of Arbitration for Sport (Cas) in Lausanne.
All made the simple point that under Uefa’s financial fair play rules, this was not what the lawyers consider “relevant income”. It was, in legal terms, the disposal of intangible assets. To others, simply debt. This was the sale of the future to service a dire financial present. It was robbing Peter to pay Paul. 
Barcelona took the case all the way to Cas and in that court’s judgment, published on Friday, one gained an insight into the mindset of a club that may be as much as €3 billion in debt including the Nou Camp rebuild; a club simply addicted to spending, who could see no alternative.
Barcelona’s excuses were legion. Their board, they said, led by president Joan Laporta, had “inherited one of the largest debts in football” – and they duly responded by piling on even more. They refused the suggestion of a period of austerity because to do so would jeopardise the performance of their team and “long-term revenue generation”.
Barcelona redacted their accounts. They tried to convince regulators that the Sixth Street deal could be regarded as both debt and income according to the requirement. When that failed, they complained that their membership model meant it was impossible to inject equity like privately-owned European rivals. 
When Uefa pointed out that 41 per cent of its members have a similar ownership structure and nothing like the indebtedness of Barcelona, the strategy changed again. Uefa, the club said, was targeting Barcelona because they continued to be part of the European Super League project.
There were peace deals suggested. Barcelona rejected a plea deal with Uefa that would have earned a smaller fine of €80,000, and an admission that the Sixth Street income was non-admissible under FFP. The club battled on all the way to the final courtroom at Cas and lost again.
The stubbornness is something else. Of course, part of that 2022 sell-off of the future funded the fees and salaries for the likes of Raphinha, Jules Kounde and Robert Lewandowski. 
Under then manager Xavi Hernandez, the league title was won in the 2022-23 season. But Barcelona could not live off the debt mountain forever. In the short term the sell-off helped meet the club’s calls on cash-for-salary commitments but the €667.5 million is now officially no use in complying with Uefa FFP.
It seems inevitable that Uefa will fail Barcelona’s FFP compliancy for the monitoring period for the financial year ending 2023 and again for the period ending 2024. The scale of the breach will determine the size of the fine. 
Uefa was waiting for the Cas judgment to be sure of its position on the Sixth Street deal and now that position is not in doubt. An announcement is imminent.
Barcelona complied for the FFP monitoring period ending with the 2022 financial year, even with the first €267 million tranche of the Sixth Street funding struck out by Uefa – but they can do so no longer. 
As with Premier League profit and sustainability rules, clubs are monitored by Uefa over a rolling three-year period. Barcelona had benefited from years in which results were better but those fall away over time. Under the new squad cost rules, the situation looks bleak.
Real Madrid have also sold future income from their refitted Bernabeu Stadium to Sixth Street in order to finance the present, although their reliance is not as great as that of their old rivals.
Barcelona were fined 500,000 euros by Uefa for their 2022 FFP submission that refused to accept Uefa’s view that the inclusion of the funds from the sale of future revenue was inadmissible. Another layer was added to the debt mountain. At 0.08 per cent of Barcelona revenue, Cas judged the fine to be “rather mild”. 
The only real issue for Uefa to decide now is the scale of the next FFP punishment. One way or another it is coming to Barcelona.
Still, it is an insight into the psyche of the world’s biggest football clubs that when faced with growing debts and sanction the instinct is never to rein it in – it is always to spend more. 
The club has sold so much of their future to their biggest creditors like Goldman Sachs, and also to Sixth Street which has such a significant share of such an important revenue stream.
The model of member-owned clubs like Barcelona, where the club’s annual assembly approved last season’s final accounts on Saturday, can seem attractive. But whatever bad calls the board makes in the transfer market, the comfort for them is that it is not their money, or their debt. 
Future generations will have to service that. No one, it seems, wanted to be the person who said to the club, their board and their fans: the spending has to stop.