The price of success: Barcelona are a joy to watch but a cavalier fiscal policy has left them millions in debt

BARCELONA may be the favourite watch of football supporters the world over. Except, perhaps, for spectators of a business bent.

When it comes to finesse, the club have oodles. When it comes to finance, they owe oodles. Alarming figures were produced by the Economist in April. The magazine claimed that the total liabilities of the Nou Camp side stood at ¤578 million, with Barça in negative equity to the tune of ¤71m. In addition, much was made of the club failing to meet its commitments on a ¤155m bank bail-out package they received only two years ago. Then there was an unpaid tax bill of ¤48m, in a league that has turned such non-payment into an art form, with clubs owing a combined ¤752m to the public purse.

Debt can appear in the eye of the beholden, however. And such gloomy indicators contrast sharply with the latest set of accounts from Barcelona, who face Celtic in the Champions League in Glasgow on Wednesday. Last season, Barça reduced their debt to ¤320m, the figure ¤100m down on where it stood two years ago, with ramped-up Economist figures including season ticket sales as a liability. Moreover, they posted profits of ¤40m, a sum bolstered by the huge savings on bonus payments through failing to defend Champions League and domestic titles. Such profits mean there is little likelihood of Barça following foul of UEFA’s new Financial Fair Play regulations. Moreover, with so many of Barça’s squad homegrown and therefore not appearing on the balance sheet as assets (as budget-busting buys would), the reality is that they have a healthy equity position.

The picture then is decidedly mixed. Precisely the message that president Sandro Rosell and Javier Faus, the club’s vice-president of finance, sent out when they spoke of Barça’s fiscal responsibilities a year ago. “The club is not bankrupt, because it generates income. The banks know that we have a business plan that will allow them to recover the money,” said Rosell. Faus was a little more circumspect. “We’re still in a delicate situation,” he said. “The debt is still too high for us to be able to dictate our future. We can’t afford to owe so much money to the bank.”

Yet, they can, it seems. As well as owe the government. How Rangers followers must wish their club had been afforded such laxity over financial probity. Atletico Madrid won the Europa League last season, and were the only club to beat Celtic in the group stage, while seeking to make no dent in their ¤155m tax bill. Six top-flight Spanish clubs have filed protection from bankruptcy orders over such payments this year. Even in a time of austerity, the softly-softly approach from authorities who fear a fans’ backlash more than a hole in their revenues, has amounted merely to an expectation that repayments will be made “within a reasonable amount of time”.

“Spanish clubs have got away with murder over their taxes and their fiddling of a whole range of expenses,” says Jimmy Burns, author of La Roja, which traces the history of football in the country. “But it would be misleading to reach an impression that they are in the serious financial jeopardy as brought down Rangers. Catalonia would be allowed to fall into the sea before Barcelona would be allowed to fail. They are simply too important in a social, cultural and political sense to the region.”

That is why when, post-crash, David Murray’s credit tap from Lloyds Banking Group was being turned off, a group of equally stressed Spanish banks seemed to see it as a badge of honour that they could ensure Barcelona were able to cover their wages, if not subsequently the loan repayment terms they agreed. Yet, Burns cautions the club’s economic reach must also be factored in. “Barcelona is a self-generating investment,” he says. “The level of debt may seem high but the club has attracted the largest shirt sponsorship deal in football history, has a duopoly [with Real Madrid] on a massive television deal and, in the past four years, with that exposure, and the sponsorship and merchandise push provided by Nike’s backing, the Barça brand has overtaken Real Madrid around the world.”

The ¤125m three-year deal signed last year with Qatar Foundation meant a sponsor’s name appearing on the previously unsullied Barça shirt. It wasn’t appreciated by the romantics but it ensured the club were able to hold on to their best players. Johan Cruyff, pictured below, was not impressed. The professional curmudgeon and architect of the now-revered Catalan football style, lacerated Rosell. “We are a unique club in world football, no one has kept their jersey intact throughout history, yet remained so competitive,” the Dutchman said. “We have sold this uniqueness for about 6 per cent of our budget. I understand that we are currently losing more than we are earning. However, by selling the shirt it shows me that we are not being creative, and that we have become vulgar. If things are so bad, then we should cut out the deal we have with Unicef, and all the values it represents, because we pay them to carry the logo on our shirts. What kind of club does Rosell want us to be?”

The club Cruyff himself campaigned to create, Burns would argue. Rosell set himself up as the anti-Joan Laporta candidate in the presidency election which he won, and his distrust of the previous incumbent’s dealings have repercussions. “There is currently a case going through the courts where the former president has been accused of financial mismanagement and misappropriation of funds.” Barça’s debts doubled in the Laporta years.

Other clubs in Spain would contend that Barça and Real regularly misappropriate funds in hoovering up half the ¤870m generated by television rights. La Liga is the only major league in Europe where there is not a collective agreement on media values. It is destroying the competitiveness of the set-up, making it almost Scotland-like, but Burns isn’t squeamish about the effect of a skewed football environment. And although half Scottish (his father was born in Brechin, while he was born in Madrid), he has no truck with his old country’s willingness to see supporters suffer for the malfeasance of their clubs.

“I think La Liga is doing fine when you consider that the Barcelona and Real Madrid fixture is watched by television audiences no previous club game has been able to command. People want to watch the world’s biggest superstars, playing fantastic football and that game consistently delivers which hardly suggests problems for Spain.

“Football doesn’t exist in a bubble and of course has been affected by the general crisis in Spain but it has hit difficulties much later than other aspects of the economy.

“The middle-ranking clubs may be hit harder than Barcelona and Real Madrid but we aren’t talking any Rangers-type situations. If I was a Rangers fan I’d be mightily p***ed off about what happened with the club. It is not up to fans to ensure there is fiscal discipline, transparency and that clubs are good and virtuous. What people want to see is football played well, and see their team win.” Barcelona certainly cash those cheques.

• Jimmy Burns will be at Waterstones in Argyle Street, Glasgow, on Tuesday at 7pm to discuss Spanish football and sign copies of his book, La Roja.

BARCELONA NUMBER CRUNCHING

€578m total Barcelona debt, as reported by the Economist in April.

€155memergency loans taken out by club in 2010.

€71m
club’s negative equity.

€48m
unpaid tax owed.

€125mthree-year shirt sponsorship deal signed with Quatar Foundation last year.

€335mdebt as reported in Barcelona’s 
2011-12 accounts.

€494.4m
revenue in 2011-12 season.

€441.1m
costs in 2011-12 season.

€298m
latest salary costs.

€48m
net profit recorded for last season.