Why can’t Barcelona still register their summer signings? Explaining his financial crisis before the start of LaLiga

Why can't Barcelona still register their summer signings?  Explaining his financial crisis before the start of LaLiga

This summer there have been presentations of players practically every week in Barcelona. July began with the opening ceremonies of Frank Kessie i Andreas Christensen, two players signed on free transfers. Then came Raphinha from Leeds United, Robert Lewandowski of Bayern Munich and Jules Kounde from Seville at a cost of over €150 million in combined transfer fees. Sources have told ESPN that more signings could also follow. Chelsea’s left back Marcos Alonso he is scheduled to move to Camp Nou and Manchester City Bernard Silva it remains a goal, albeit a little more unattainable at this stage.

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Barça president Joan Laporta has fulfilled his promise to back manager Xavi Hernández by building a competitive team capable of competing on all fronts, but in doing so, questions have been raised about spending of Barça. Laporta himself described Barça as “clinically dead” last year, with a gross debt of €1.3 billion. As recently as June, he said the club was still in intensive care. Less than a month later, he signed Lewandowski for €45m and declared the club “out of hospital”, prompting Bayern coach Julian Nagelsmann to wonder aloud: ” The only club that has no money but buys all the players they want. . I don’t know how. It’s a bit crazy.”

The origin of Barça’s spending is not difficult to understand. By selling 25% of their domestic TV rights to investment firm Sixth Street for 25 years and 24.5% of Barca Studios, their own production company, to Socios.com, they have raised more than 600 million euros . They have also recently signed a new sponsorship deal with Spotify and last year, the club took out a €500m loan from Goldman Sachs to spread their debt payments.

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The money, therefore, is there, even if it comes at a cost in terms of reduced income in the future and increasing debts in the long term, but finding the cash this summer was not Barca’s big problem. As was the case when Lionel Messi abandoned last year, the problem is registering new players within LaLiga’s financial fair play rules. With the new campaign starting on Saturday, none of Barça’s signings are still registered in the Spanish league.

(Editor’s note: This page will be updated as the situation with Barcelona develops this week.)

Why can’t Barça register players?

LaLiga’s financial regulation is perhaps the strictest of the top five European leagues. Each Spanish team has a spending limit that indicates the maximum amount they can spend on the first team in relation to players and coaching staff, a figure that includes wages and transfer fees. Lewandowski’s cost on the books, for example, would be his salary plus €12.5m, as his fee is amortized over the length of his four-year contract.

Stripped down to the simplest possible terms, the cap is essentially a calculation of what the club can afford based on their departure income and debt. It also applies before signings, so if a club does not meet the criteria set by the league, they cannot register new players. This is where Barça find themselves a few days before the opening of the season, a home date with Rayo Vallecano.

Barcelona president Joan Laporta is working tirelessly against the clock so that all of the club’s new signings can actually play. Jose Breton/Pics Action/NurPhoto via Getty Images

Spending limits change constantly, but at the end of last season, Barca’s limit was -144 million euros (it was around 600 million euros before the pandemic), the only negative limit in Spain , caused by the losses of the previous campaign of more than 400 million euros. Meanwhile, Barça’s wage bill, including amortization, remains around 500 million euros. Even though they are outside their cap, the league only allows them to spend a fraction of what they get in salary savings, either through cuts or player departures, and in fees. The ratio has been 1 to 2, 1 to 3 and 1 to 4 at various times over the past year, the most common being 1 to 4, which means they can spend 25% of what they earn. or save

Barca hoped that the sale of TV rights and a stake in Barca Studios would increase their cap enough for them to operate on a 1-to-1 ratio and register all their signings. LaLiga informed them last week that they are not there yet and therefore cannot yet register all their new signings.

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A league source told ESPN that doesn’t mean they can’t sign some of them, though who would depend on the cost and mix of players. (For example, less salary cap space is required to sign Christensen than Lewandowski.) Barca would prefer not to go the route of appearing to prioritize signings if they can avoid it.

Which players are affected?

A few days before Barça host Rayo Vallecano at Camp Nou in their first game of the season, none of the five summer signings — Lewandowski, Raphinha, Christensen, Kounde or Kessie — have been registered in the league. The Blaugrana have not yet registered the new contracts signed by Ousmane Dembele or Sergio Roberto, neither Therefore, these seven players are currently not fit to play for Barça, despite being present in the pre-season.



Julien Laurens asks Gab Marcotti if Barcelona are forced to start the new season without registering their new players.

What do they have to do to register players?

In a few words, Barça must sell more assets. The sale of the television rights (which gives up 5% of the club’s estimated annual revenue of around €40m, according to the most recent figures) was made in two packages, each dubbed “financial leverage” by Laporta. The sale of 24.5% of Barca Studios was the third lever. Now, league and club sources confirmed to ESPN, a fourth lever is needed to allow all seven players to sign up, which is expected to come in the form of a further 24.5% from Barca Studios this week.

However, some sources point out that it still won’t be enough and the club will still fall short in terms of signing everyone up. Therefore, the club continues to work on the departures — Samuel Umtiti, Martin Braithwaite i Memphis Depay All have been advised to find new clubs and take pay cuts. Talks are ongoing with Gerard Pique i Sergio Busquetsamong others, to find a solution.

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The club has also publicly said this midfielder Frenkie de Jong, the subject of interest from Manchester United and Chelsea, needs to take a pay cut if he is not to leave the club. Landing €85m in transfer fees for the Dutch midfielder would solve many of his problems, but sources say he remains determined to stay.

All this is also a repetition of last summer, when Piqué, Busquets and Jordi Alba adjusted their salaries to allow Memphis records, Eric Garcia i Sergio Aguero.

It is worth saying that last summer the solution arrived just as late. The adjustment of Pique allowed Barcelona to register Garcia and Memphis on Saturday, August 14, just 24 hours before their first game of the campaign, which was a 4-2 win at Real Sociedad. Even so, those of Alba and Busquets have delayed until the day before the end of the summer period. reductions to start so the club can confirm Agüero’s registration in the league.

What is your timetable for doing this? Any deadline?

Technically, Barça have until the end of the signing period (August 31) to register players in LaLiga, but the first game of the season on Saturday is a date marked in red. All five new signings have played an active role in pre-season, along with Dembele and Sergi Roberto. No one wants to be the player — or players — left unregistered for the Rayo game this weekend.

Barça need the procedures for the fourth financial lever, which is not yet official, to be approved as soon as possible, but players can register until the day of the match.

If they can’t register players before this weekend, what?

This is where things get murkier. Barca have until the close of the transfer window to sign up, but could have some unhappy players and agents if things aren’t sorted out sooner. Beyond that, it’s unclear what was included in terms of potential escape clauses in each player’s contract. Given that Barca’s financial problems have been well documented, a football industry source says it would have been irresponsible if the agents involved had not negotiated clauses for the scenario where their client does not register.

Also, ESPN reported Wednesday that the two players signed in free agency, Kessie and Christensen, could trigger a contract clause that would allow them to find new clubs if they are not registered in time for this weekend’s opener against the Rayo Vallecano Sources say that, at the moment, neither of them plans to implement this clause in their contracts.

It must be emphasized that Laporta continues to convey confidence that everyone will be registered, but if they are not, there are several options, such as exercising possible escape clauses, going out on loan or spending the next five months on the sidelines until January. the window opens.


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!