June 13, 2024

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Barcelona’s Budget Squeeze: What Lies Ahead

2 min read

Barcelona’s financial woes have taken center stage as their spending limit for the current season has been dramatically reduced to €270 million from the previous €648 million set in February. This drastic cut is due to several factors, shedding light on the club’s financial health.

The budget cap reduction is a reflection of the gap between a team’s earnings and its non-sporting expenses and debt repayments. It’s a signal of the club’s economic struggles, which have been exacerbated by the diminishing impact of “palancas,” or assets sold to improve short-term finances.

One significant contributor to Barcelona’s fiscal challenges is the delayed receipt of funds from asset sales, notably Barca Studios, now known as Barca Vision. This delay prompted President Joan Laporta and his board to provide a €20 million guarantee to register all summer business with La Liga.

To balance the books, Barcelona had to make some tough decisions. They made limited summer signings, such as Oriol Romeu, Ilkay Gundogan, and Inigo Martinez, and secured season-long loans for Joao Felix and Joao Cancelo. Top earners like Sergio Busquets and Jordi Alba were offloaded, as were players like Ousmane Dembele and Franck Kessie.

Barcelona’s annual sporting costs were reduced from €560 million to approximately €400 million. However, they still find themselves exceeding the league’s cap, which will result in transfer restrictions when the window reopens in January. This will impact spending on other teams within the club, including the B team, women’s team, and basketball team.

The road ahead for Barcelona remains challenging. Laporta and his team will need to explore further cost-cutting measures or alternative funding sources to sustain their current roster of players. The club’s financial stability hangs in the balance as they navigate these trying financial waters.

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