BARCELONA, Spain, October 6 – Barcelona general manager Ferran Reverter said on Wednesday that the club were “technically bankrupt” when Joan Laporta took office as president in March, and that it was reportedly “dissolved” s ‘it was a limited company.
The Spanish giant’s financial woes were laid bare in August when they were forced to allow Lionel Messi to join Paris Saint-Germain after admitting they could no longer afford to keep the six-time world player from the l ‘year.
The new board inherited € 1.35 billion ($ 1.56 billion) in debt and bloated first-team payrolls as Laporta returned for a second term as chairman after the resignation of Josep Maria Bartomeu.
“If the club had been an SA, it would have been dissolved,” Reverter revealed at a press conference during which he presented the results of an audit carried out by the accounting group Deloitte.
“In March 2021, we were in a situation of technical bankruptcy, but as a sports association we were able to refinance the debt,” Reverter explained, revealing that the club was “having difficulty paying salaries” due to a “almost zero cash flow”.
To bail out the club in the short term, officials took out a temporary loan of 80 million euros ($ 92 million) “to cover Treasury bonds for a period of 90 days”, and refinanced a debt of 595 million. euros.
Barcelona have confirmed losses of € 481million for last season, which was even higher than the club expected.
According to Reverter, the audit, which studied the club’s finances from 2018/19 to March 2021, showed that there had been “serious administrative deficiencies” and that executives “were buying players by being out of touch with reality. “.
Bartomeu was forced to resign in October last year following growing pressure from fans and his public falling out with Messi over the Argentinian’s wish to leave the club.
“When they signed players, no one wondered if they could pay them. The very night that (Antoine) Griezmann was signed, they realized there was no money for him, and they had to ask for more funds.
Griezmann left to join Atletico Madrid on loan at the start of this season.
Between 2016 and 2020, Barca’s payroll soared 61%, from € 471m to € 759m, Reverter added. The total has since been reduced by $ 155 million by the new management.
Reverter also pointed out the unusually high commission rates paid to intermediaries involved in player transfers, “between 20 and 30 percent”.
Yet despite the club’s financial difficulties, Barca hope to end this season with a profit of five million euros.