The Spanish club is facing one of its most challenging times in the recent years. The entity chaired by president Bartomeu reflects evident instabilities at a financial, sporting and institutional level. The current COVID-19 health crisis has led one of the most prestigious clubs to inevitably show both internal and external difficulties when the current 2018-19 LaLiga Santander title-holder was seeking to become the first club to generate multimillion revenues. Recent board resignations, differences between players and the club and a rocketing debt since 2017-18 season are some of the main tipping points for the turbulent times at Barça’s offices.
To face COVID-19’s impact, players accepted a 70% wage cut making clear they agreed on the exceptional measure since the beginning of the crisis and being critical with the club board’s disagreements until the decision was made. Up to €14M is the monthly amount expected to be saved after the players’ wage cut, being added to the predicted €2M monthly saving from other sections like Futsal, Handball or Basketball wage cuts. Of an annual budget of €1.047bn, 61% was projected to be spent on wages, a target unlikely to be met after the leagues’ predicted losses as KPMG estimated a total loss between €800M and €950M for LaLiga Santander due to the COVID-19 crisis.
At FC Barcelona, players & sports staff salaries accounted for almost 90% of global 2018-19 wage budget, with a total spending of €485.5M dedicated to the sports area. Administrative staff and social contributions represented €41M and €14.1M, respectively. Definitely, clubs will require to have players on board to take vital measures to ensure financial and economic sustainability. An aggravated situation for the Catalan club, with an increasing debt in the recent years due to salaries and transfers’ depreciations, because of compromising projects as the new Espai Barça, which its predicted financing rises up to €815M, according to Palco23.
When competitions will be allowed to restart if they do, how commercial partners’ relationships will be dealt when most of the return of investment of the club’s assets will not meet expectations or how FC Barcelona will be to generate more revenues by offering innovative solutions to fans are some of the most relevant unknows to oversee how Barça will end COVID-19’s game.
This article was written by Xavi Bové, Sports Marketing Consultant at SBI. You can contact him directly at email@example.com