There's some great news and some solemn news on the financial front. The good? Barcelona raked in a record 48.8 million euro ($59.38 million) last year by cutting costs and increasing revenue. The bad news? It's going to go mainly towards paying off a staggering debt. No less an authority than President Sandro Rossell confirmed it: "This profit will be used to reduce the club's debt, which will go down to around 340 million euros," he declared.
Barcelona are not alone in this department, with teams rich and poor posting losses year after year and accruing debt. Manchester United, the world's most valuable sports franchise, owes 424 million euro. Other rich clubs like Arsenal and Real Madrid hold similar debts.
Keep in mind that the debt figure depends on the definition being used, as total debt can be calculated in several different ways and is changing rapidly. While the team has debt, it also has massive revenue as well as assets. I won't bore you with the finer details, but generally, the team is not exactly in serious trouble. However, the situation was not good and heading in the wrong direction.
Things were most dire in 2010, when the team posted a massive loss thanks in part to a certain Mr. Ibrahimovic. "The sporting excellence of recent years has not been reflected in economic excellence," financial vice president Javier Faus concluded then.
Since, the team has dramatically reversed their financial fortunes and have looked quite healthy as of late. The responsible thing to do is to continue to pay down the debt.
The Qatar Foundation shirt sponsorship deal, the more austere transfer policy, and preseason tours provide three key areas of saving and revenue, but they also present a moral, idealistic, and sporting dilemma.
For decades, FC Barcelona was one of the only (if not the only) professional football teams who willingly rejected a shirt sponsor. This lack of sponsorship was a matter of purity.and idealism. The shirt was too sacred for commercial interest to be given space. Barca players eventually displayed the logo of UNICEF on their chest, but instead of charging for that privilege, Barca donated money to the children's charity.
This policy made Barcelona stand out, as it showed a generous spirit while at the same time reaffirming both an independence and uniqueness. Last season, UNICEF was demoted to the back of the shirt, and the front read Qatar Foundation, thanks to a deal in which Los Cules received around 150 million euro.
The Qatar Foundation is a non-profit organization that does some nice things (despite the questions some may have about Qatar in general), but it was still against the particular tradition of the club. However, after the massive loss, the club needed cash. "The arrival of the Qatar Foundation on our shirts did not please the romantics but it was necessary," said marketing director, Laurent Colette, to Le Parisien.
On the other hand, club legend Johann Cruyff was not pleased. "We are a unique club in world football, no one has kept their jersey intact throughout history yet remained so competitive," the Dutchman told El Periodico de Catalunya ."We have sold this uniqueness for about six percent of our budget." Cruyff, an idealist if there ever was one, concluded that Barcelona had become "vulgar."
Personally, I was very proud of Barcelona's sponsorship of UNICEF and will probably treasure those shirts more than any others. However, I considered that a bonus, and accept the reality that the team needed money. At the same time, I understand Barca still gives money to UNICEF and still wears its logo, so while it is a mild disappointment, I much prefer that to the teams that are sponsored by more morally questionable businesses (like gambling).
Next is the transfer budget. As a supporter and not a socio (shareholder), in some ways I do not get many direct dividends from the front office not spending money. As a spectator, I would like the team to spend every last cent it has on getting the very best players available and seeing a super team win every match.
However, thinking rationally, I know that spending outside of the club's means will lead down a very frightening road. Just look at what happened to Rangers (though I'm sure transfer spending was a small part.)
The yearly transfer budget is set at 40 million euro, which is not a sum to be underestimated. It can bring several very good players, a couple of great players, or a superstar. The transfer of Jordi Alba - a young, exciting player - didn't even cost half of that budget. Not only that, but the team has some flexibility in that it has allowed itself to dip into the next year's funds if it becomes necessary.
The team can do this and still maintain competitiveness at the pinnacle of football due to its amazing academy that produces world-class talent.
Finally, we have the preseason tours. For years, the Blaugrana have gone to a foreign region to play friendlies, where relatively well-off fans who do not have many world-class football matches come by the thousands.
This was great for fans in the United States or Asia who usually did not have an opportunity to see Barcelona, and great for the financial health of the club.
What it did not help, however, were fitness levels. Training was complicated by unfamiliar environments and facilities, while the inevitable jetlag of crossing continents took a toll on the players. "Before we had pre-seasons, now we go on tour," said Josep Guardiola, the coach last season, while his team prepared in the US. "We couldn't train properly because of the heat, which frequently neared 40°C. But the club need the money."
Some disappointing early season results, as well as the seemingly endless string of injuries, have been partially blamed on the exhausting tours. I'm not a sports fitness specialist, so I cannot calculate to what extent this is true. However, Guardiola is one of the sharpest football minds, and if it seemed like a bad idea to him, I would be inclined to believe it.
The front office seemingly got the message and, for the first time in years, Barcelona are staying relatively close to home for the preseason. All the matches are in Europe, except for one in Morocco, and Morocco is very close to Spain.
There are, of course, a huge amount of other issues that relate to the debt, but those three are exceptional in that they have a cost-benefit that the team most analyze and decide upon.
While we should be mindful of the debt, my understanding is that we should remain calm as it is not crippling. It is encouraging that the team is starting to pay down the debt, and in general, I have to say that I either agree or at least accept the club's decisions regarding controversial revenue-raising and cost-cutting measures.