Barcelona have navigated their way through the crisis. Can he spend the way out now?

Joan LaPorta’s smile was hard to miss. Last month, a smiling image of the president of Spanish soccer giant FC Barcelona was projected from a huge digital billboard that covered almost the entire side of the Palms Casino Resort in Las Vegas.

The Billboard Look at the other pictures – there was one of the few Barcelona players and their coach Xavi Hernandez – but soon it was back to Laporta. And that was the sight, the dazzling president front and center In the gambling capital of the world, it was perhaps the best symbol of the financial mess Barcelona is currently in, and the boundless confidence of a man who says he has a plan to fix it.

Barcelona, ​​in true Vegas style, will double down.

A team that less than a year ago couldn’t meet its huge salary cap; A business that, with losses of 487 million euros ($496 million) last year, was described by its chief executive as “technically insolvent”; The club, currently saddled with more than $1.3 billion in debt, has decided on the best way out of a crisis caused by financial mistakes, rich salaries and extravagant contracts.

He has sold one club asset after another to raise about $700 million to help balance the accounts. Still, it is pushing ahead with a $1.5 billion project, funded by Goldman Sachs, to renovate and modernize its iconic Camp Nou stadium, which will bear the sponsor’s name for the first time in a fundraising drive. And he spent more money on new signings this summer than almost every other big team in Europe, with big fans announcing a spectacular new signing on a seemingly weekly basis.

The free spending has raised eyebrows among Barcelona’s rivals and concerns among its 150,000 members about the club’s financial viability if Laporta’s big bet doesn’t pay off. But the president, in an interview at the New York Times headquarters in Manhattan, repeatedly offered reassurance that he knows exactly what he’s doing.

“I’m not a gambler,” LaPorta said. “I take calculated risks.”

However, risk has become a major theme for Barcelona.

Laporta was re-elected as club president last year after his predecessor and the previous board were ousted, leading to the simultaneous financial and sporting collapse of one of the world’s biggest sports teams. While many expected Barcelona to slowly rebuild, living within their means during a period of modest austerity, Laporta decided to take Barcelona on a completely different course. He says he has no choice but to try to win every year.

“It’s a requirement,” he said.

More than $700 million was raised through the sale of the club’s business. Twenty-five percent of the club’s domestic television rights – for a quarter of a century – went to an American investment fund. Spotify, the music streaming service, has signed a four-year deal to put its name on the Camp Nou and even more valuable real estate on the front of the team’s shirts. On Monday, Barcelona announced the sale of a quarter of its production business, Barca Studios, to blockchain company Socios. It is in talks to sell part of its licensing business.

However, instead of paying off the club’s debt, the money went largely into acquiring new talent: $50 million for Polish forward Robert Lewandowski, $55 million for French defender Jules Coude, nearly $65 million for Brazilian winger Rafinha. Several other players joined as free agents. More reinforcements may be on the way.

The signing of Laporta, Lewandowski, who will soon turn 34, and the rest make perfect sense. It’s part of what he claims will be a “virtuous cycle” in which success on the field bolsters the team’s finances by increasing revenue. The strategy is to repeat the recipe he used during his tenure as president, a seven-year period that began in 2003 and ended with a Barcelona team that was one of the best in football history.

“During my time, our expectations were very high and we succeeded,” he said of his previous position. And then Barça fans around the world, about 400 million fans around the world, they need a level of success.

But times and incomes have changed. The club, which Laporta inherited in 2003, was also mired in financial crisis, with revenues almost doubling and debt mounting. But then these figures were 10 times smaller and the club had not yet begun the process of transforming itself into the commercial juggernaut it has become.

These teams were also not subject to the strict player spending limits that have since been enforced by the Spanish league, and it is these rules that pose the most immediate obstacle to Laporta’s revival plan. With La Liga insisting it won’t loosen the rules for Barcelona by a single euro, the club have yet to register any new signings this summer. Aware that the team might not meet the deadline, the league has yet to use any of those players, even Lewandowski, the reigning World Player of the Year, in the brand new season.

The latest asset sales should pave the way for Barcelona to comply with La Liga’s financial rules and register a battalion of new signings, Laporta claimed. “It was a decision I didn’t want to make, to be honest,” he said of the sales, even though they will – at least temporarily – bring Barcelona’s balance sheet to a profit.

This type of maneuver – a mix of bravado and bravado – is characteristic of Laporta, who enjoys a cult of personality unmatched by previous presidents in the club’s modern history.

That’s why he can put himself on billboards in Las Vegas, and why he can continue to publicly advocate for the short-lived and widely maligned European Super League. (Barcelona, ​​Real Madrid and Juventus – three of the 12 teams that signed up to the breakaway concept – are continuing the project, which Laporta says is now an open competition that will benefit the biggest teams. He recently met Andrea. Aniel and Florentino Perez, his colleagues at Juventus and Real Madrid in Las Vegas to discuss next steps.)

But Laporta’s popularity also means he can avoid financial risks that would have been considered unacceptable by previous presidents, and especially by his unpopular predecessor, Josep Maria Bartomeu.

“What would happen if Bartomeu does the same thing as the current president?” said Mark Dutch, a club member who helped bring down the previous board. “We would all be on fire, pointing at him and trying to free him.”

LaPorta is given more exposure and even has fanatical defenders on social media, Duch said, because of its links to an earlier golden age. “Laporta has a history of success behind it,” said Duch. “He has a huge following: he’s like the Pope, like Kim Jong-un: the supreme leader.”

Laporta’s intensely personal leadership style has also been reflected in other changes at the club. For the presidential election, Laporta first had to secure a 125 million euro guarantee, a bond essentially created as a safeguard against mismanagement. But club members recently agreed to a rule change that means he no longer has a personal risk, says Victor Font, a businessman who challenged Laporta for the presidency. Because of this, according to Font, Laporta – by borrowing money and selling assets – is risking the future of the club, not his own.

“If things don’t work out,” Font said, “we hit a wall.”

Conflict-of-interest regulations were quietly changed last year as well, bringing LaPorta’s friends, former business associates and even family members into executive roles. For Laporta, these changes were essential given the challenge he inherited. “I have to have people I can trust,” he said. But the circle continues to shrink: LaPorta’s appointed CEO quit within months; Instead of replacing him, Laporta took over his duties himself.

At the same time, he has had to rebuild trust with the playing group and convince many to accept pay cuts, in some cases worth millions of dollars, while the club is shelling out eight-figure sums on new talent. Laporta described the players who took the pay cut as “heroes” and insisted that by cutting wages and offloading some high-paid players, new arrivals will fit into a carefully crafted salary frame. But getting there wasn’t always easy.

One player who has so far refused to take a pay cut or move to a new club is Frankie de Jong, the 25-year-old Dutch midfielder who was bought in the summer of 2019 for almost $100 million. De Jong has been the subject of intense speculation all summer as Barcelona have publicly pushed him to accept a pay cut – he has already agreed to a 17 million euro ($17.3 million) deferment – or a move to a new club. (Manchester United was probably the biggest contender.)

But De Jong has made it clear he wants to stay in Spain and while Laporta declared his “love” for the player and said he was not for sale, he added that De Jong needed to “help the club” by restructuring his wages. Unions and the Spanish league president have warned Barcelona about pressure on De Jong, and Laporta has responded by saying his club will pay what De Jong owes. “He’s under contract and we’re fulfilling the contract,” LaPorta said.

Much of Barcelona’s current state, ironically, can be traced back to the era of success they enjoyed during Laporta’s first term. These teams played a brand of football that was unrivaled, producing a series of trophies but also a team of popular superstars who commanded ever-increasing salaries. No player typified this escalation more than Lionel Messi, whose last contract at Barcelona was worth around $132 million a year.

As Barcelona’s debt piled up, it became impossible for Messi to sign a new contract that would comply with La Liga’s financial rules. For a fee, Messi bid a tearful farewell to Barcelona and joined Qatari-owned Paris Saint-Germain as a free agent. Laporta, who has vowed to keep Messi as a presidential candidate, has since surprisingly suggested he wants him back.

“I feel that I, as the president, have a moral obligation to him to give him the best moment of his career, or give him a better moment at the end of his career,” LaPorta said, without elaborating. How can this be done?

At the same time, the relationship has become strained: Laporta, in constant campaign mode, continues to suggest that he will try to bring Messi back home. Messi has previously expressed his disappointment at how Laporta has characterized his departure, while his father has asked the Barcelona president to stop talking about his son in public.

However, the discussion of how to handle this situation can be done later. The same applies to difficult questions about where Barcelona will continue to find its growing revenue streams in a post-pandemic economy, or what it will do if it can’t register all the signatures, or what will happen next year, or the year after, when the nine-figure bill arrives.

Laporta lives in the present. “Winning,” he said, “is the universal human motivation.”

But now is not the time. LaPorta politely ends the interview, saying he has to hurry. He has a meeting at Goldman Sachs to discuss a new financing arrangement.

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