Barca’s chaotic finances – now at last the truth emerges « Untold Arsenal: Arsenal News. Supporting the Lord Wenger in all he does

By Tony Attwood

You might remember how Barcelona have boasted about making money, having no problem with cash, and winning things at the same time, and all that sort of stuff.

Why can’t we be like that, cry the anti-Arsenal Arsenal.  Well here’s why.

I had the temerity to put up an article “Barca on the edge” in which I argued that this was far from being the case.

In my piece I quoted work prepared by Professor José María Gay, the head of the University of Barcelona’s economics and business unit who investigated  Barce’s 2009-10 balance sheet.  Wage costs (he said) have risen 55% from their 2008 level to €262m (£220m).  But (and this is the big point) the club’s stated revenues have risen 33% over the same period, meaning wages now account for almost 64% of income.  Not terrible, but not good.

The key point however is that the club’s short-term debt of €392m (£329m) far exceeds their working capital of €110m (£92m) and “even hints there could be a risk of default during the current close season.”

Now there was the usual annoyance at this prognostication, for we are talking about God’s team here.  God’s team does not go bust – just like Liverpool and Man U don’t go bust.  God’s team never gets itself into a position in which it can’t pay its players.

Anyway all these figures looked very odd given that the noise coming out of everywhere else in Barcelona, with everyone saying that they were making bumper profits (as they should what with having won everything) and that everything was hunky dory.

And besides Barca is owned by the fans, so everything must be good.  The fan ownership model is exactly what the government wants for this country.  Put the fans in charge, they know what to do.

Well…

Now it seems that fans can screw up too. Those profits didn’t exist, and the figures presented were fake (or unaudited, as those who created them would undoubtedly say).

The audited figures show that Barcelona lost more than €77m (£64m) last season as opposed to the £9m profit reported by former president Joan Laporta.

The new audit shows that Barcelona had an income of €408.9m for the 2009-10 season, but costs amounting to €477.9m, and although I am no accountant I reckon that is not good.   Further spending of around €8m means the overall loss is €77.1m.

“The figures presented by the former board don’t reflect the real image. They have cheated,” the new man at the helm said.  “There is a structural problem. The sporting excellence in the last few years has not been reflected in economic excellence. The new board’s goal is to bring economic excellence alongside sporting excellence.”

Or, we could say, “We have done a Ridsdale.”

That may seem shocking – to compare the destroyer of Leeds United and Cardiff City with the progress of God’s Barça, buyers of Henry and Hleb and wannabe owners of Cesc.  But in fact Barcelona have taken the Ridsdale model (in which one borrows money against the future success of the club and uses it to buy the players who will bring that success) and instead of seeing it as the most chronically stupid thing in the universe, they have dressed it up as the way to make football perfect.

And when it all goes horribly wrong, they start having a fire sale of players.

So awful is the situation that Barça recently took out a loan of €155m after falling behind with the payment of player wages at the end of June. The central defender Dmytro Chygrynskiy was also rapidly flogged on to Shakhtar Donetsk to raise much-needed funds for the club.

But before the problems emerged Barcelona had already signed David Villa  for €40m and have ponced around claiming that they are willing to spend as even more to buy out Cesc Fábregas’ five year contract with Arsenal.  But the fact remains that they made one derisory offer and then have done nothing.  They know that they can’t afford him.

Although the refusal of Arsenal to deal has meant that Cesc stays with us, it also sadly means that Arsenal have stopped Barca falling into even deeper debt.

Of course none of this has emerged over night – just like Liverpool’s debt and Man U’s debt didn’t just suddenly happen.   But is has been hidden by the fact that journalists have generally been unwilling to admit what is staring them in the face.  That huge teams like Barca, Man U and Liverpool are utterly bust – and yet are carrying on with their old methods of buying players, because like a junkie, they have no idea how to stop.

For the English clubs it is the buy out that caused all the damage.  For Barca it is the dependence on TV money and the recklessness of the owners – the fans.  When the TV cash dries up, all hell breaks loose.

Of course the Anti-Arsenal Arsenal sites ignore all this stuff, and go on demanding that Wenger should go out and buy and buy and buy, and get Arsenal into exactly the mess that Barca are now in.

But what we are doing is exactly the right thing – keeping the money stable while clubs around us fall apart, or get trapped by new regulations.

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Coming next – how Barca let it all happen: a review of their accounts leading up to the fiasco.

Also available: Analysis of Arsenal’s finances, and those of other top English clubs.

And what was it like when Arsenal went bust.  The story of our administration, and the rise from the tomb.