Memphis Depay talks about not regretting his summer transfer to Barcelona. (1:57).
Ferran Reverter, the chief executive of Barcelona, has stated that the club would have been "dissolved” in April if it were a public limited corporation (PLC), having been brought to bankruptcy by its previous board.
Reverter called Josep Maria Bartomeu, the former president of the club, "disastrous" and accused him and his directors from signing players they couldn't afford, paying high wages to journalists and offering them inflated wages.
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Bartomeu quit amid growing discontent among supporters, in October 2020. Joan Laporta was elected to replace him in March after a delay in the election process because of the pandemic.
Reverter, after Laporta's board had looked into the club’s finances more closely, revealed the full extent the club's financial woes at a Camp Nou news conference on Wednesday.
Reverter stated, "When we arrived in March, we discovered a club that was technically bankruptcy; if it were a PLC [the club] would be dissolved."
"There was no cash flow, and it was difficult to pay salaries. Future liabilities and debt totalled 1.35 billion. There was an urgent need to refinance.
Reverter stated that it was difficult to conduct due diligence as the previous board deleted emails every 90-days and used personal computers sometimes, making it difficult to track all that had happened behind closed doors.
He also spoke out about how "deteriored training facilities" and "a Camp Nou that was in a precarious position" required immediate improvements after Laporta's election earlier this year.
He said that the majority of Barca's financial problems stem from overspending on wages and players.
Reverter stated that between 2016 and 2020 there was a 61% rise in payroll. This is the same amount as Juventus' entire payroll.
"The signings were done at high prices, and with contracts that included new remuneration concept such as loyalty bonuses or end-of-contract premiums which increase future spending.
"If the same team had been retained in this season's roster, the payroll would have reached 835 million, which is 108% more than recurring revenue. These operations have also resulted in unusual intermediation expenses in previous years.
Reverter took it one step further and criticized the club for signing players that they couldn't afford.
He said, "They didn’t think if they could afford the players." "[Antoine] Griezmann signed in a hurry. They realized they couldn't pay for him, and needed 85 million in credit to complete the deal.
An investigation into forensic evidence has been ordered to determine if there were any other irregularities in the club's previous management, and whether journalists were paid legitimately.
Reverter also downplayed the coronavirus's effects, saying that Barca would have suffered losses of 390m even without the impact from the pandemic. Actual losses at the club totalled 481m.
Barcelona was heavily affected by the pandemic because Camp Nou fans were not allowed to visit. Marc G. Aloma/ Europa Press Sports via Getty Images
Barca had to make sacrifices in order to ensure the club's continued success this summer. Lionel Messi, Griezmann, and other big earners left the club. Other players also agreed to take pay cuts with 155m taken off the total wage bill.
Catalan clubs also took out credit lines with Goldman Sachs in excess of 500m. These were repayable over ten years at 1.98% interest.
These actions, together with the deadline-day transfers of Emerson Royal, and Ilaix Moriba mean that the club is now in a position to renew some of its talented youngsters such as winger Ansu Fatti and midfielder Pedri. They may even consider signing players in January.
Reverter stated that while we are not yet at the top and need to cut outgoings, we can sign and renew players.
"The renewals of Pedri's and Ansu's contracts are on track. Player exits [at August's end] generated more that 20m per LaLiga Fair Play rules. So we can sign if necessary."
Reverter believes that the club will be significantly more competitive in the transfer market next summer.
Reverter, when asked about Messi's exit, said that it was only July, when due diligence began, that the full extent the club's financial problems became evident. Messi "couldn't wait until August 31" to find out if the club could afford to register his contract with LaLiga.
Reverter, who was absent Messi, played down concerns about revenue loss with sponsors as the club negotiated several key contracts. He stated that the "Barca brand is strong" and assured the club they expect to "increase their income" in the future.