1 of the Most Famous Teams in Sports Is Close to Bankruptcy
Commissioners Roger Goodell of the NFL, Adam Silver of the NBA, and Rob Manfred of MLB have all said in one form or another that the pandemic has already cost their sports billions. Gary Bettman says NHL teams will lose $1 billion this season. But you’ll notice no teams in the continent’s four major sports have filed for bankruptcy. That may not be the case for one internationally famous soccer club that ranks among the 10 most valuable in the world: FC Barcelona is on the brink.
FC Barcelona is one of the world’s best-known clubs
One of the things setting FC Barcelona apart from many other international soccer powers is that the club is publicly owned.
What also makes ‘Barca,” founded in 1899, stand out is its rich history in the sport as one of the top clubs in La Liga, Spain’s leading league. Domestically, Barcelona has won its league championship 26 times and the nation’s Copa del Rey competition 30 times. On the European scene, the club possesses five UEFA Champions League titles, four Cup Winners’ Cups, and five UEFA Super Cups. In addition, Barcelona has won the FIFA Club World Cup three times.
Barcelona, Real Madrid, and Athletic Bilbao are the three founding members of Spain’s top division that have not been relegated since its inception in 1929.
The club’s prominent players over the years have included Johan Cruyff, Ronaldo, and Romario. The current resident superstar is Lionel Messi, who has made 786 appearances for Barcelona and scored 649 goals through Jan. 27, 2021.
FC Barcelona is the world’s eighth most valuable team
Forbes publishes a ranking of the world’s most valuable teams each summer that confirms just how big the sports business is. In July 2020, the publication counted 57 franchises around the world valued at $2 billion. The first 10 on the most recent list are:
- Dallas Cowboys, $5.5 billion.
- New York Yankees, $5 billion.
- New York Knicks, $4.6 billion.
- Los Angeles Lakers, $4.4 billion.
- Golden State Warriors, $4.3 billion.
- Real Madrid, $4.24 billion.
- New England Patriots, $4.1 billion.
- Barcelona, $4.02 billion.
- New York Giants, $3.9 billion.
- Manchester United, $3.81 billion.
Bayern Munich is the only other soccer club in the top 25, coming in 24th at $3.02 billion.
Barcelona owes its value to the combination of its rich resume on the field, lavish sponsorship deals, a huge following by fans around the world, and a 99,000-seat stadium.
The Spanish powerhouse is a financial mess
Recent reports by Spanish media said that officials of the internationally famous Barcelona soccer club have approached financial behemoths Goldman Sachs, Allianz, and others about delaying debt payments that will be coming do this summer or renegotiating loans in the face of a lopsided financial ledger.
As a publicly owned company, Barcelona released its annual financial report on Jan. 25, and the numbers point to bankruptcy barring some fancy footwork. Perhaps most distressing of all, the club’s red ink can’t be attributed solely to losses rolled up because of the COVID-19 pandemic.
For the 2019-20 season, Barcelona took in $1.035 billion and spent $1.157 billion. That gap can be attributed to the team’s museum and store being closed by the pandemic and games being played in empty stadiums.
Less troubling, but still an issue, is that the decrease in revenue during the pandemic has caused Barcelona’s player payroll to exceed the La Liga maximum of 70% of total income. Leading the way is Lionel Messi’s $85 million salary.
But the bigger issue is existing debt. That includes $238 million in transfer fees owed to various clubs — in some instances for players no longer on the Barcelona roster.
According to El Mundo, Barcelona is in debt to the tune of $1.378 billion. The immediate concern is an estimated $884 million due to lenders early this summer.
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