Barcelona spent its way into crisis. Can you now make her way?

It was hard to miss Joan Laporta’s smile. The smiling image of the football giant’s president, gazing from a huge digital billboard last month, covered almost an entire side of the Palms Casino resort in Las Vegas.

The painting I scrolled through the other photos – there was one from a handful of Barcelona players, another to his coach, Xavi Hernandez – but soon he was back at Laporta. This sight was a cheerful chief front and center In the gambling capital of the world, it is perhaps the best symbol of the financial chaos Barcelona currently finds itself in, and of the boundless confidence of the man who says he has a plan to fix it.

Barcelona, ​​in true Vegas style, doubles down.

A team that less than a year ago was unable to meet its huge salaries; The company, which incurred a loss of 487 million euros ($496 million) last year, was described by its chief executive as “Technically bankruptThe club, currently saddled with more than $1.3 billion in debt, decided the best way out of a crisis caused by financial missteps, rich salaries and exorbitant contracts was to get its way.

I sold one club Origin after, after else to me Raised nearly $700 million To help balance his books. However, it is moving forward with a $1.5 billion project, funded by Goldman Sachs, to Renovation and update Its famous stadium, Camp Nou, which for the first time will bear the name of the sponsor due to the rush to raise funds. And it has paid more money on new signings this summer than almost any other big team in Europe, with a flashy new acquisition announcement and seemingly big draw on a weekly basis.

The free spending has raised eyebrows among Barcelona’s opponents and fears among some of its 150,000 members about the club’s financial viability if Laporta’s big bet doesn’t pay off. But the president, in an interview at the New York Times headquarters in Manhattan, offered frequent reassurances that he knew exactly what he was doing.

“I am not a gambler,” declared Laporta. “I take calculated risks.”

However, risk-taking has become a staple in Barcelona.

Laporta was elected president of the club for the second time last year after the election of his predecessor and the previous board Fired What amounts to the simultaneous financial and athletic collapse of one of the world’s largest sports teams. While many expected Barcelona to slowly rebuild, living within its means in a period of modest austerity, Laporta decided instead to steer Barcelona down an entirely different path. He says he has no choice but to try to win every year.

“It’s a requirement,” he said.

More than $700 million was raised through the sale of parts of the club’s business. Twenty-five percent of the club local TV rights – For a quarter of a century – he went to an American investment fund. Spotify, a music streaming service, Signed a four-year agreement To put his name on the Camp Nou and the most valuable real estate at the front of the team’s shirts. Monday, Barcelona Advertise sale From a quarter of its production business, Barca Studios, to the blockchain company, Socios. It is in talks to sell part of its licensing business afterwards.

Rather than paying off the club’s debts, the money went largely toward accumulating new talent: $50 million for Polish striker Robert Lewandowski, $55 million for French defender Jules Conde, and about $65 million for Brazilian winger Rafinha. Many other players joined as Free Client. May be more reinforcements On the road.

For Laporta, signing with Lewandowski, who will soon turn 34, and the others makes perfect sense. It’s part of what he says will be a “virtuous cycle” as success on the field will boost the team’s finances through increased revenue. The strategy is an iteration of the recipe he used during his first term as president, a seven-year term that began in 2003 and ended with a Barcelona team celebrated as one of the best teams in football history.

“In my time, expectations were very high and we were successful,” he said of his earlier period. “And then, Barcelona fans around the world, about 400 million fans around the world, need some level of success.”

But times and revenues have changed. The Laporta club he inherited in 2003 was also mired in a financial crisis, incurring losses of twice its revenue and mounting debts. But the numbers were ten times smaller at the time, and the club had not yet begun the process of transforming itself into the commercial juggernaut it had become.

These teams have also not been required to meet the strict player spending limits that La Liga has imposed since then, and it is these rules that pose the most immediate obstacle to Laporta’s revival plan. Due to La Liga’s insistence that it will not relax the rules for one euro for Barcelona, ​​the club has yet to sign any new signings this summer. Warning that the team may not meet the deadline, the league has yet to use any of these players, even Lewandowski, World Player of the Year, in any of its brand new season.

Laporta insisted that the latest asset sales should pave the way for Barcelona to meet La Liga financial rules and sign the new signing squad. “This was a decision I honestly didn’t want to make,” he said of sales, even if – temporarily at least – it drives Barcelona’s balance sheet into profit.

This kind of maneuverability – a combination of daring and brinkmanship – is typical of Laporta, which capitalizes on a cult of personality unparalleled by previous presidents during the club’s recent history.

That’s why he can position himself on the billboards in Las Vegas, and why he can continue to publicly advocate for short-lived and widely hated people. European Premier League. (Barcelona, ​​Real Madrid and Juventus – three of the twelve teams who have partnered with the idea of ​​a split – are moving ahead with the project, which Laporta said is now being envisioned in an open competition that will benefit the biggest teams. He recently met Andrea Agnelli and Florentino Perez, his counterparts at Juventus and Real Madrid, in Las Vegas to discuss next steps).

But Laporta’s popularity is also the reason why he was able to escape financial risks that would have been unacceptable had previous presidents, especially his unpopular predecessor, Josep Maria Bartomeu suggested it.

What would happen if Bartomeu did the same as the current president? said Mark Deutch, the club member who helped overthrow the previous board. “We were all making a fire, pointing at him and trying to shoot him.”

Deutch said Laporta has been given a wider berth, and even backed by die-hard advocates on social media, because of his connections to the previous golden age. “There is a success story behind Laporta,” Deutch said. “He has a huge fan base: he’s like the Pope, like Kim Jong-un: the supreme leader.”

Laporta’s personal style of leadership has been reflected in other changes at the club. To run for president, Laporta first had to raise a guarantee of 125 million euros, a bond created primarily to protect against mismanagement. But club members recently agreed to rule changes that mean he no longer has any personal risks, according to Victor Font, the businessman who Laporta challenged for the presidency. Because of that, Font said, Laporta – by borrowing money and selling assets – is risking the club’s future, not his.

“If things don’t work out, we’re going to hit a wall,” Font said.

Conflicts of interest regulations have been quietly changed in the past year as well, resulting in a group of Laporta’s friends, former business partners and even family members reaching executive positions. For Laporta, these changes were necessary given the challenge he inherited. “I need the people I trust,” he said. But the circle continued to shrink: a chief executive appointed by Laporta resigned within months. Instead of replacing him, Laporta took over the duties himself.

At the same time, he had to rebuild trust with a group of players and persuade many to accept salary cuts, in some cases amounting to millions of dollars, and at the same time, the club spend eight-figure sums on new talent. Laporta described the players who accepted the wage cuts as “champions” and insisted that by lowering their wage bill and offloading some of the higher-income players, the newcomers would fit into a carefully designed salary framework. But working to get there wasn’t always fun.

One player who has so far refused to accept either a salary cut or a move to a new club is Frenkie de Jong, a 25-year-old Dutch midfielder acquired in the summer of 2019 at a cost of nearly $100 million. De Jong has been the subject of intense speculation all summer as Barcelona publicly lobbied to agree to his reduced salary – they have already agreed to a €17m ($17.3m) deferral – or accept a move to a new club. (Manchester United is said to be the most eager bidder.)

But De Jong made it clear that he wanted to stay in Spain, and while Laporta declared his “love” for the player and said he was not for sale, he added that De Jong needed to “help the club” by restructuring his salary. Trade unions and the president of La Liga have warned Barcelona not to put pressure on De Jong, and in response Laporta said his club would pay De Jong what they owe. “He has a contract, and we’re following the contract,” Laporta said.

Ironically, much of Barcelona’s current plight can be traced back to the era of success they enjoyed during Laporta’s first tenure. These teams played a kind of football like no other, producing a series of awards and also a host of famous stars who receive ever-increasing salaries. No player has exemplified this escalation more than Lionel Messi, whose last contract at Barcelona was worth about $132 million annually.

With Barcelona’s debt growing, Messi’s signing of a new contract that complies with the league’s financial rules became impossible. At an exorbitant price, Messi bid farewell to Barcelona, ​​and joined Qatar-owned club Paris Saint-Germain as a free agent. Laporta, who has vowed to keep Messi as a presidential candidate, has since suggested wistfully that he would like him back.

“I feel I, as the president, have a moral debt to him to give him the best moment of his career, or give him a better moment, at the end of his career,” Laporta said, offering no explanation for that. How can this be done.

Meanwhile, the relationship is soured: Laporta, in a constant state of pregnancy, continues to suggest that he will try to bring Messi home. Messi has previously expressed his frustration with Laporta’s description of his exit and his father It said He asked the Barcelona president to stop talking about his son in public.

However, a discussion of how to resolve this situation can come later. The same is true of the hard questions about where Barcelona will continue to find increased revenue streams in a post-pandemic economy, or about what it will do if you can’t score all the signings, or what will happen next year, or the year after, when the bill is due. Consists of nine numbers.

Laporta lives in the present. “Winning is a universal human drive,” he said.

But time is up now. Laporta politely ends the interview, saying that he should hurry. He was appointed to Goldman Sachs to discuss a new financing arrangement.

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