Barcelona were on the verge of bankruptcy when Joan Laporta replaced Josep Bartomeu as president earlier this year with the club’s dire financial position laid bare on Wednesday.
The economic web Barcelona find themselves in has been revealed with the club recording a £409million (€481m) loss for last season.
It’s no secret that the Catalan giants have been majorly struggling amid the coronavirus pandemic but the full extent of their problems has been disclosed.
Barcelona CEO Ferran Reverter presented a grim picture while releasing the results from a Deloitte audit that started after Laporta arrived in March following the resignation of former chief Bartomeu and his board of directors last year.
Reverter said the audit concluded that ‘there have been serious administrative deficiencies’ during the administration of Bartomeu, who in the past has denied being responsible for the team’s current financial struggles.
‘The new board of directors and its new executive structure encountered an economic and financial situation marked by negative equity and in a situation of technical bankruptcy, if it was a PLC, [the club] would have been dissolved,’ he said.
The club revealed that they lost more than £400m in the 2020-21 campaign after revenue decreased and expenses went up.
The LaLiga outfit’s revenue dropped by 26 per cent with just £537m compared to £727m the season before as fans were shut out from games with the stadium unable to open, given the Covid crisis.
Barcelona are reliant on football tourism, with stadium tours a big money-spinner and revenue has subsequently plummeted at the Nou Camp with that severely restricted.
While the club’s expenses rose by 19 per cent from £812million to £1billion despite making savings through players agreeing to take pay cuts.
As a result the club posted £384m worth of debt by June while debts in recent seasons are believed to have already totalled more than £1.1bn.
Today, Barcelona’s financial woe was laid bare amid a very difficult period for the football giants as:
Reverter said the new administration found debts and future liabilities of £1.12bn.
‘There was no operating cash flow as the club struggled to pay all the salaries,’ he said. ‘There was an urgent need for refinancing.’