Barcelona are still unable to register their summer signings after La Liga rejected an attempt to use the club’s own funds to boost the value of two of the asset sales they resorted to to balance the books and bolster their team.
With the sale of a further 25% of their content production company Barça Studios for an estimated 100m Lewandowski, Andreas Christensen and Jules Koundé in the squad for their opener against Rayo Vallecano on Saturday night.
Barcelona had booked €667m (£562m) in profits from the sale of two packages of future television rights and hoped it would help comply with La Liga financial fair play rules. They also announced the sale of almost 25% of Barça Studios, the third of the so-called “Palankas‘ or economic ‘levers’ they pulled that summer. Overall, including a new sponsorship deal with Spotify, player departures and higher earnings, Barcelona say they have raised more than €850m to improve their squad and fix a financial crisis.
However, the league’s audit revealed that the amount Barcelona had received directly from investors Sixth Street for two TV rights packages of 10% and 15% respectively was just €517m. According to the Spanish radio station Cadena Cope, the club had paid the remaining 150 million euros themselves. The operation is legal and has been approved by Grant Thornton, the club’s auditor, but the league has recalculated the benefit on the basis that €150m of the amount is not new revenue.
Having spent more on transfers than any other club in Spain and still not managing to reduce their payroll spending enough, Barcelona still fall short of the threshold where they can register all their players in La Liga.
Instead of selling those packages directly to Sixth Street, Barcelona have set up a company called Locksley Investments, Cope said. This company bought the club’s TV rights under a permanent deal, with Sixth Street buying the two packages over the next 25 years. Barcelona then spent €150m of their own money to buy the rights from the 26th year. This has allowed the total book value of the deal to grow now that two deals have been announced, the first for 10% of the club’s 25-year La Liga TV rights, the second for a further 15%.
When the second deal was finalized, they announced that the club would receive €315m immediately and that the operation would result in a €400m benefit. Barça President Joan Laporta had also expressed his hope that the league would share its interpretation of the criteria. It has not.
Barcelona are unhappy with the interpretation applied. The league has strict financial fair play rules – the ‘salary limit’, which is essentially based on a revenue-by-squad cost calculation – which has a preventive rather than punitive effect: when a club’s spending on its squad exceeds the limit set by the Liga simply doesn’t allow them an automated system to register players.
Laporta had said he hoped not to have to turn a fourth lever, although the board had already approved the move if that were to be necessary, which now appears to be the case. At general meetings this spring and autumn, his government, which had inherited a severe financial crisis, had previously been given permission to buy a percentage of future TV rights (up to 25% for up to 25 years), Barca Studios and 49% of the licensing arm Club BLM. The latter has not yet happened.
Barcelona continue to try to move players, with the potential departure of Frenkie de Jong being of particular concern given the size of his salary and payback. They are negotiating pay cuts with senior players and club captains Gerard Piqué, Sergio Busquets and Jordi Alba and intend to make more signings.