FC Barcelona almost doubles the debt limit set by its statutes

The debt drowns FC Barcelona and will become the biggest headache for the new board of directors. According to the accounts closed in June of last year, the Catalan club faces maturities until 2023 for an amount of 710 million euros, which is equivalent to 20 times its own funds, which are only 35 million.

The situation is so delicate that the club is breaching the commitments acquired both in bank financing and in debt issues carried out, even ignoring its own statutes.

In the audit report, EY, the firm that has been in charge of supervising its accounts, advises that “the net debt as of June 30, 2020 is 488 million euros. Taking into account that the total investments made in the development of the Espai Barça is 109 million euros, the adjusted debt is 379 million euros, with the statutory ratio set forth in article 67 of the Club’s Statutes being, / ebitda, at 3.64, clearly above the maximum limit of 2 “this time.

And, in this sense too, the auditor issues a very clear warning by ensuring that “the consolidated balance sheet shows a negative working capital for an amount of 601.8 million, a fact that could cast doubt on the application of the going concern principle. “In other words, the club is bordering the bankruptcy and that its future as a sports entity in this situation is up in the air.

Debt worsening

As reflected by the audit, the significant worsening of the working capital compared to the previous year, when the amount was also negative, but only 285 million, was mainly due to the debt transfer with long-term and short-term financial entities, investments made in Espai Barça, investments for the acquisition of federative rights of players and the provision of credit lines with financial entities for face liquidity needs derived mainly from Covid-19.

Punished like the rest of the clubs by the crisis caused by the pandemic, FC Barcelona reduced its income by 15% in the last year, up to 708 million euros. But the worst thing is that, compared to a net profit in the 2018/2019 season of 4.5 million, last year it registered about Red numbers after tax of 97.3 million euros.

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Looking ahead to this year, the club has planned in its budgets a drop in income of exploitation of 3%. As he explains in the annual account report, “Stadium income is reduced mainly due to the consequences of the pandemic, which this year already affects the club’s facilities from day one.” For this reason, FC Barcelona “foresees a stage without an audience until February, a 25% capacity until May and 50% during the last two months of the season “, something that for the moment is not being fulfilled since the parties continue being celebrated to empty doors.

The Catalan club indicates that it has planned “a significant effort in reducing the sports salary bill, mainly via the players exit with high chips and through salary deferral mechanisms that allow adapting the current salary mass to the generation of income of the club in the context of a pandemic “.

The objective, in fact, is that sports wages are reduce from 462 to 335 million euros, which would represent a decrease of 27% compared to last season. Non-sports salaries would drop, for their part, by 3% and management expenses by 5%. With this, total expenses would go from 955 million last year to 796 this season.