From Galácticos to IOUs: The Economics of Barcelona’s Debt
Barcelona’s financial troubles stretch back a decade of excess spending and fiscal impropriety. By 2020, the club had accumulated some of the largest wage bills in world football, Messi supposedly earning over €500,000 a week net and several stars on contracts well in excess of their value. Not only were these transactions economically unviable, but also inopportune, as the COVID-19 pandemic caused matchday revenue to plummet and left Barcelona with a risky imbalance between inflows and outflows. Whereas Premier League clubs such as Liverpool are owned by investor syndicates that run them as money-making enterprises, Barcelona is owned by its members, the socios. Presidents are elected, and since sporting success usually determines the outcome of elections, boards went in for populist expenditure, large transfers and star wages, even when the balance sheet was shining red.
Barcelona had more than €1.3 billion in debt as of 2022–23. About €730 million was due shortly, much of which was owed to other teams for transfer fees on the likes of Frenkie de Jong and Philippe Coutinho. The remaining amount was long-term debt, bonds, and loans to roll over older obligations, effectively keeping debt on a long-term basis. Adding to that was the Espai Barça project, a huge redevelopment of the Camp Nou. In 2023, the club took a €1.45 billion 25-year loan to finance the work in the hope that a bigger stadium and improved facilities would ultimately generate the revenue to pay back the loan. This put the club in a difficult position, with urgent cash flow pressures in the near term and repayment obligations far out in the future.
To stay afloat, president Joan Laporta depended on so-called “economic levers.” These included selling a quarter of Barcelona’s La Liga television rights to private equity firm Sixth Street for 25 years in exchange for more than €500 million up front. Commercial sponsorships were also prolonged, most notably with Spotify, which took naming rights for Camp Nou and became the principal shirt sponsor. The club also offloaded interests in its digital content arm, Barça Studios, to bring in new liquidity. All these actions allowed Barcelona to sign new players and avoid technical bankruptcy but at a great cost: by securing future revenue streams, the club reduced its long-term flexibility and amplified its exposure to future adversity.
Economically, Barcelona’s future is also in doubt. The club is extremely dependent on Champions League qualification to ensure revenues of more than €100 million annually, but failure to qualify regularly would create yet another crisis. Debt servicing is also a significant drag on the operating budget, as interest payments gobble up revenue that could otherwise be spent on players or infrastructure. On top of this, Barcelona faces another tier of international competition from state-funded teams such as Manchester City and Paris Saint-Germain, which can inflate salaries and transfer fees to a level where they are impossible for a member-owned club to afford.
The Barcelona drama is a reminder that elite sports teams are both economic assets and cultural symbols. Players are assets, television rights are collateral, and brand value is leveraged in ways that make it hard to distinguish sport from business. Yet the drama also illustrates the perils of short-term populism, overleveraging, and overreliance on fickle revenue streams in volatile markets. Barcelona’s brand strength and the remodeling of Camp Nou can eventually restore financial well-being, yet the present reality is that one of the planet’s most renowned institutions is walking a financial tightrope. The moral for economics, as for football, is clear: even the biggest names are not invulnerable when achievement on the pitch is pursued without restraint.
– By Sean Hirabe
