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When Barcelona announced the 55 million euro signing of Ferran Torres it raised more than a few eyebrows. How was a club which had been forced to let go of its greatest ever played just five months ago due to financial constraints and had to rely on free transfers to bring in any new players last summer able to pull off a deal like this? Following the player's unveiling, club president Joanne Laporta even went as far as to announce the club's return as a powerhouse in the world of transfers.
The resurgence of Fc Barcelona is a reality but with Torres now a fully registered member of the Blau grana squad and with the club still sorting out the financial mess left to them by the previous administration. How on earth was a deal like this possible and will the club be able to pull off similar business in the future?
In order to look at why Barcelona has been able to pull off a deal like the one they've made for Ferran Torres, it's worth recapping their financial situation even if it feels like very well trolling ground by this point. In 2020/ 21, the Blaugrana recorded a post-tax loss of 481 million euros by far the worst in Europe. Inter Milan were next on almost half that at 246 million while Real Madrid even posted a small profit.
According to swiss ramble, one of the leading voices online for football finance, it represents the biggest annual loss ever recorded by a football club. This was largely the result of the club generating just 631 million euros in revenue their lowest return since 2014-15 and around a quarter less than what they'd predicted to bring in at the start of the financial year.
The global pandemic of course played a big part in this with revenue linked to the stadium mainly gate receipts down by 84 on the previous year. However according to the club without the impact of covid, they still would have recorded a loss of 390 million euros, which is still down almost 300 million on the year before.
This is quite astonishing for a club which had posted a profit every year from 2011-12 to 2018-19 and were expecting to break the 1 billion euro mark for revenue in 2019-20. But having spent 960 million euros on transfers in the three years up to 2020 Barca landed themselves with 731 million euros worth of short-term debt that had to be paid off within 12 months. With the club's presidential elections taking place in March 2021, just months after the full extent of the boss's financial woes had become public, sorting out the mess left by the regime of Joseph Bartomel was always going to be first on the agenda for whoever came.
Considering all this it seems incomprehensible that Barca would be able to make a big-money signing like Faran Torres but over the last 10 months, the la puerte administration has made several moves to keep the club at least somewhat competitive in the transfer market the most significant of which was restructuring their debt in securing a 595 million euro loan from American investment bank Goldman Sachs which will reportedly be paid off across the course of 15 years the Blau grana have effectively replaced the precariously large short-term debt which threatened the club's ability to operate.
While Barca plans give hope to fans who have been left uncertain of the boss's long-term prospects over the last 18 months, it doesn't necessarily explain why they've been able to complete a 55 million euro transfer midway through the season. As pointed out by swiss ramble, the club is reportedly paying the transfer fee over the course of four years. So, assuming they are structuring the deal equally they will only be paying man city 13.75 million euros this year. Something which is seemingly covered by the Goldman Sachs loan and restructuring of debts.
But while purchasing the player clearly wasn't too big a problem the main obstacle facing barcette is laliga's strict financial fair play regulations, which have squeezed the club during their period of economic difficulty in the wake of the global pandemic. The spending rules which were brought in almost a decade ago to keep sides in the top two tiers of Spanish football in better financial shape give every club a specific wage cap each season, known as the squad cost limit, depending on how much money the club is making.
Due to the huge losses incurred by Barca over the last two years while they had a cap of 671 million euros in 2019-20, this has dropped to just 98 million this season below clubs like Villarreal and Real Sociedad.
The club has clearly had their work cut out for them in trying to get a new highly valuable player onto the pitch and it's testament to just how much they wanted Faron Torres that they've been able to make it happen.
Do you run the Euro Football Daily YouTube channel? It was brought to my attention that the first couple paragraphs of this post are pulled directly from one of their videos.
Downvoting for likely plagiarism
It is not just the beginning. He took everything from the video. It is just that he skipped copying parts in the middle. Kinda like copying paragraphs and skipping some. In the end, everything he wrote is from that video, but not everything in that video is in the post.
You preach religion on your blog yet you decide to cheat your way around. I suggest you change your way of thinking drastically as only original content is acceptable on Hive. What did you honestly expect?
He actually also plagiarises those lol
Well at least he is consistent and expect he also plagiarized the post he got voted on by @curie.
I am looking into that one as we speak actually since I am a community builder in that community.
Let me know and will gladly downvote.