Barcelona, finances and everybody’s right

The new pre-season sport is speculating about the finances of FC Barcelona.

There are endless arguments, pooh-poohing of other people, even those not named Winnie. Lines are drawn, battlements mounted and at the end of it all, the essential reality is that everybody is right. Why? Because nobody knows the truth.

Well, except Laporta and the club accountants, and they ain’t talking. Might as well argue about how many angels can dance on the head of a pin.

Premiership-honed writers come at the club and its finances from the perspective of a money-rich league, atop which sits a petroclub that just plunked down a king’s ransom (in salary) for the hottest young striker in world football, a sum that is about 30 seconds of black gold gushing from an oil well.

Every team in that league is stuffed with cash, and the Prem’s 4bn+ broadcast rights contracts mean that even the littlest clubs, scraping away against relegation, have astonishing sums to spend.

In that context Barça done gone buck wild, doing payday loans, spending money it doesn’t have like a dude fronting big at the bar. It doesn’t make sense to them, and they wonder how the club is doing it, insolvency, how are they buying players when they are asking other players to take pay cuts, and so on as they pull on ever more levers. Doom beckons.

Others argue that the club is a money machine that has sold a mere fraction of its total holdings for a short-term gain that could, if it pays off, see it making more than anything it could ever have sold off, that the salary cuts are part of an overall restructuring and the club is too big to fail. Augmenting this is the bluster from Joan Laporta that the club will have 1.3bn in revenue, with 125m in profit.

One side has the club thisclose to insolvency, the other side insists that this is all just simple accounting stuff, moving and amortising and taking losses early so that they can get them all out of the way, etc, etc. And everybody argues but still, everyone is right.

Culers are right to say that the risk is ultimately minimal compared to the reward. Culers also want to see their club sitting atop the pyramid again, so let’s do this. Five hundred million in loans here, a phone call to Goldman Sachs there, and it’s all good if the club is having victory parades.

Others recognize that this strategy is risky, that if the club takes, say, 100m in broadcast rights, that’s in fact 75 because the other 25 is in someone else’s hands, bought and paid for. And levers are being pulled. A piece of this, a piece of that. And if those risks don’t pan out, is the club really any worse off than it was before it started pulling levers? Not much, because “they have only sold a fraction of their full potential.” Or lots, “because this deficit spending is risking the future of the club.” It all depends on who you ask.

“Tap the equity in your home for cash,” trumpet the ads hyping something that back in the day was called a second mortgage, something you only did if holy crap, the world was falling down. If your house is worth 400,000 and you have paid 250,000, do a refi, dig into that equity. Today, people tap home equity to take a family vacation to Disney World. And everything is fine until an unexpected expense or job loss blows up the world. Debt financing and deficit spending has found its way to the little people, and finance folks argue about that as well.

We still don’t know what FC Barcelona is doing, but make no mistake: “pulling levers” is just selling stuff to buy other stuff, or make the books look peachy keen enough to register all the players that the club either can or can’t afford to buy. Everybody is partying aboard a megayacht headed for the rocks. Does the skipper intervene to save it from damage? Stay tuned.

One side will point out the complete and total rationality of its supposition, as will the other side. One journalist will write something and people will say, “See?” Then another.

The arguing about something we know so little about is fun, but ultimately unrewarding because there is no truth. We only know what we are told, and that is swaddled in layers of ulterior motives, fun with accounting and other armored cladding.

When Joan Laporta last scuttled down the ratlines, he left FC Barcelona saying that the club turned a small profit. This number was, of course, just enough to make sure the guarantee that every club president has to offer against losses would remain in the pocket of him and his benefactors. This is what we were told.

Sandro Rosell assumed the presidency and said that everything Laporta said was a lie, that the club was deep in debt, and couldn’t even afford to make color copies. One set of accountants says one thing, one set says another. And people might as well argue about the shade of blue that the sky is. This, too, is what we were told.

Numbers can, mostly, say whatever the person presenting them wants them to say. Want 1.3bn in revenue, .3bn more than your predecessor, who bragged about hitting the 1bn mark? Rock on. Who’s to say you’re wrong? Who can? Nobody.

But we can sure argue about it.

Even the rational analyses, coming from a space of pure objectivity as they look to calmly explain how the club can do what it is doing, bereft of any motivating perspectives, still don’t and can’t have the entire picture — even as they are the most useful and engaging to read. But the FC Barcelona club finance wars are every bit as tribal as anything else in football.

This includes the people who say, “Well, I don’t know much, but this all seems risky to me, goldurnit,” like the old man with all of his money stuffed in a mattress because he doesn’t trust them there banks. It’s clear there is something going on, because the club has to sell stuff to buy other stuff, as opposed to the time when the Neymar windfall left that board staggering through the transfer market like a drunken sailor who just got a bonus.

Call it pulling levers all anyone likes, but the club has to sell stuff to buy other stuff. The stadium has a new name. The CVC deal that was called “crappy” by so many is different when the club does its own CVC deal, just with a different entity.

And through it all, Laporta just smiles and offers even more names, as if everything is all right and fine in the world. But the club still has to sell stuff to buy other stuff, or register the players it sold other stuff to acquire as it amortises, moves debt around to different piles and has yet another player presentation.

Are the worriers right to be worried? Who knows. Are the “everything’s fine” people right to say that? Who knows. Is the truth somewhere in the middle? Most likely.

The only real truth about any of this is that Barça is too big to fail. If the next president comes in, takes a look at the real books and faints, there will be a way out because that’s just reality for a club that might one day be playing its matches in the Spotify Goldman Sachs Beko Camp Nou, a wholly owned subsidiary of Jimbo’s Cryptocurrency. Then as now there will be those, as there was way back in that innocent time when all the club sold was the shirt, saying it is all necessary to sustain sporting excellence.