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The Economic Situation at FC Barcelona

It is no secret that Barcelona are in a financial crisis and must make major cutbacks to their first-team squad ahead of the new season.
Barcelona are unable to register the new contract of star player Lionel Messi nor any of their four summer arrivals as they are operating far beyond their wage budget

The Catalan giants were forced into making drastic savings last year when Luis Suarez, Arturo Vidal, Arthur Melo and Ivan Rakitic were all moved on, along with wage reductions across the squad.

This summer will be even more complicated with yet further slashes to the club’s wage budget and players no longer will to continue to accept wage reductions.

Full-back Junior Firpo is joined English Premier League side Leeds United in a deal that would save Barca around $11 million per season, according to Goal's report. Portuguese midfielder Francisco Trincao has also been loaned to Wolverhampton Wanderers with an option to buy.

American forward Konrad De La Fuente has been sold to Marseille and Jean Claire-Todibo has been shipped to Nice, saving the club circa $12 million annually. 

At this point, we already know that Barca need to reduce their salary bill by around €200million to register their four new signings, as well as Lionel Messi‘s new contract.

But according to Swiss Ramble, their current wages were the highest in Europe at last count, which was last year, outspending second place Manchester City by €42million per year, a trait that does not board well in the year when La Liga cut the Blaugrana’s salary cap by €187million.

In January, it was reported by Spanish newspaper El Mundo that Barcelona was on the "verge of bankruptcy." In the 2020 financial year, Barcelona made a loss of around $117 million and club financials also showed it to have a total of $1.4 billion in debt. 

The wage bill is the club's biggest problem. LaLiga has its own Financial Fair Play rules limiting what each club spends on salaries due to which barca can't even register the players that they singed this year. The estimated wages for Barca’s four new signings are around €30m (£26m/$35.5m), plus whatever salary Messi agrees to. The Argentine is expected to take a significant wage cut, perhaps with a promise for a future, well-paid, role at the club. 

According to Catalan radio RAC 1, Barcelona need to wipe £156million (€187m) off their existing wage bill. Their limit was £296m (€347m) last year and now it’s £136m (€160m).

The difficulty comes in selling players when every other club in Europe knows Barcelona’s precarious financial state and their desperation to sell. The greatest difficulty, though, will come in shifting the players that have proved to be Barcelona’s biggest mistakes in the transfer market in recent years: club-record signing Coutinho, perennially injured Dembele and the disappointing Griezmann. Miralem Pjanic is another player in whom coach Ronald Koeman has little interest in and he too has been offered, and turned down, release from his contract worth €16m (£14m/$19m) a year.
Other players, including Martin Braithwaite, Neto, Clement Lenglet, Sergi Roberto and Riqui Puig may also be shipped out, either sold or on loan, but without losing the big earners, it does not do a great deal of good. Quite who would be left to ensure Barca can remain fighting at the highest level, though, is up for dispute.

The blame lies at the feet of previous president Josep Bartomeu who handled the club’s finances so poorly.

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