FC Barcelona are in the midst of a financial crisis as billions of euros worth of debt linger on them. Still, they are making headlines by signing big names for big bucks. However, they could not register a single player until the 12th of August. Had they failed to register their new signings Franck Kessie and Andreas Christensen, both players would have had to leave the club for free without even playing a single league match!
The question is, why could a club of Barcelona’s stature are having difficulties registering their new signings?
Barcelona’s impending debts
FC Barcelona have debts of over a billion euros along with a hefty wage bill of over €500 million. As per the financial fair play statutes of La Liga, Barcelona had a wage limit of approximately €150 million, in July. This risked the club going under the administration, which means an indefinite takeover of club operations by the league itself.
To avoid that, Barcelona had to declare their earnings, which would justify their net spending. As per the financial fair play rules, a club in Barca’s state can spend €1 for every €4 they make. This means that if Barcelona earn €100 million, they will be allowed to spend €25 million.
This was one of the reasons why it took so long for Las Blaugrana to register these players. Barcelona were activating its “economic levers” to raise funds so that they can spend a quarter of it to sign and register these players. Once the books were balanced, La Liga accepted their applications.
Activating Economic Levers
Another reason why Barcelona were unable to register their players was that they were busy activating their ‘fourth’ economic lever. It is not yet official as to what this mysterious fourth economic lever is but the club have managed to sort all the paperwork for it. La Liga have accepted their paperwork which, in turn, allowed them to register their new signings.
So far, FC Barcelona have activated three of its economic levers to raise funds, triggering the fourth one last week. However, by doing so Barcelona are threatening its position in its own organisation as they have sold major stakes of the club and its subsidiaries. It is only a matter of time till we see some developments in the club to justify their hard work.
Frenkie de Jong situation
Although not a major reason, the situation circulating Frenkie de Jong’s wages is a rather tainting one for Barcelona. A club that spends nine figures on new players at the expense of an existing player’s wages is shambolic, to say the least. This not only is bad business for the club, but it also taints the club’s reputation in the fraternity. De Jong is owed nearly €20 million in wages as Barcelona continues to sign new players.
The club now expects the Dutch midfielder to take yet another wage cut, having taken it twice in the past, if he wishes to play at Spotify Camp Nou. However, de Jong is neither willing to accept it nor is he willing to leave Barca. It will be interesting to see what happens next.
FC Barcelona continue to find possible ways to raise funds for the club to comply with the financial fair play statutes. Possibilities of players like Memphis Depay and Pierre-Emerick Aubameyang leaving the club are also on the cards. So far, Barca have managed to register their new signings. However, they cannot sign any more players without offloading some of their existing players.
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