Barcelona is one of the best clubs in the world, but they are now a shadow of their former stature. Being one of the most historic clubs in the world, they have won a lot of trophies and boasted many of the best players in the world. But financial mismanagement in recent years has destroyed the club, reducing it from a giant to a struggling club.
Since the pandemic, the club has reported record losses, and coupled with their massive debt situation, they have been struggling to even register players. And the situation has worsened since the club has been fined for some past offences.
Why was Barcelona fined by National Court?
Barcelona have been given a massive €23 million fine by the National Court. This is regarding an investigation into the club’s tax evasion schemes, involving players’ agents between 2012 and 2015. At the time, Barcelona’s presidents were Sandro Rosell and Josep Maria Bartomeu, both of whom are already controversial figures in the eyes of many fans of the club.
It seems that the club engaged in some ‘tax simulations’. Every club is required to make payments to player agents when transfers or new contracts are agreed on. All transfers, including those amounts, are subject to taxation. The club, in an effort to minimize their losses, opted to bypass tax payments on agent fees and secretly deal with those payments.
At first, the club would claim that they included the agent fees by directly sending them to the players of those same agents. Later, the agents would be paid, but those payments would not have any connection to the transfers officially. This led to the club saving much money on taxes, and the court ruled those fees were for non-existent reasons.
The first verdict on the allegations found the Catalans guilty, and Spain’s Central Economic Administrative Court gave them a €23 million fee in 2020. The club decided to appeal the case at the time, and the National Court decided to uphold the same verdict four years later.
Barcelona have confirmed that they will be appealing to the Supreme Court now, which would take even longer to be officially concluded. They do not have to pay the fee as long as the final verdict is not given.
Has Josep Maria Bartomeu ruined Barcelona’s finances forever?
The recent fine only proves the disastrous tenure under former president Josep Maria Bartomeu, which saw one of the worst financial crises in the history of the club and possibly of any big club ever. His reign at the club practically destroyed the club’s financial situation, possibly for years to come.
Bartomeu was the president from 2014 to 2020, when he stepped down after much pressure from the fans and club members. Under his presidency, the club spent heavily on player transfers and contracts, spending extravagant sums worth more than their actual value. The expensive transfers of Philippe Coutinho, Ousmane Dembele, and Antonine Griezmann are a few examples.
This way of spending was not sustainable, and to keep on spending the same amounts, they took out huge loans with high interest rates. For a while, they managed to run the club this way as the club was also reporting record profits and trophy success.
But in the year 2020, the COVID pandemic hurt every club financially. Barcelona were hit hard, as they had to report record losses. Their huge debts remained and the club had to struggle to even register players, something they are still facing now. With the team also struggling on the pitch in recent years, their revenues took more losses. This financial situation had to see many legends and stars leave the club, with Lionel Messi’s departure the most memorable.
The club have a debt of around €1.2 billion, and while their revenue has recovered, they still can’t spend heavily on transfers due to the debt. This has led to the team requiring academy players and free transfers to keep the team running. With the team’s poor performances and no big trophies other than the league title last season, this financial situation would take a long time to recover, with the club resorting to unique ways to make money.
Bartomeu’s reign also saw much controversy, with the Negreira case being a recent example. Many other tax evasions and other allegations have been levied against the Spaniard and the club, further affecting the club’s finances.
It is safe to say that Josep Maria Bartomeu has quite possibly ruined Barcelona for years to come, both financially and in spirit.
