Barcelona have not lost a game in any competition going back to December 21, a run of 21 games that puts them at the top of La Liga and in the last eight of the Champions League. Yet as the title race reaches its final stages, the integrity of the Spanish season is under threat.
The Catalan club, three points clear of Real Madrid in top spot, have effectively failed La Liga’s financial fair play regulations. The reason that Spanish football knows that to be the case is because Barcelona themselves disclosed it, in their half-year results released this week which revealed a €100 million (£84 million) black hole in the club’s profit and loss. The Spanish game is in uproar. La Liga has said, with the support of the Spanish football association (RFEF), that Barcelona do not have sufficient capacity to register the squad with which they have played all season.
In short, if the title is won by Barcelona in May then La Liga itself says they will have done so on a false premise. Rival clubs such as Atlético Madrid, Athletic Bilbao and Sevilla have backed La Liga president Javier Tebas in his scrutiny of Barcelona’s accounting – a club who have had three different auditors in less than five months. At the centre of the scandal is one of Spain’s Euro 2024 heroes Dani Olmo who, with fellow summer arrival Pau Victor, has been judged by La Liga as having been ineligible to play for Barcelona since the turn of the year.
Joan Laporta, the club’s president, has retaliated by framing it as a simple “attack” by Tebas on Barcelona. “They can’t beat us on the pitch so they act off it,” he said in a statement this week. “Trust me, my response to La Liga and Tebas will be strong. As president I simply cannot allow this to stand.”
Yet unlike La Liga, Laporta has been notably thin on detail. He has not answered the key question: why did Barcelona state unequivocally in a legally binding statement that it had generated that €100 million of missing revenue if it had not?
Instead, Laporta has sought support from a reliable ally, the Spanish government ministry MEFPD that includes sport, which refused to investigate Barcelona earlier this year and now says – in direct opposition to La Liga – that Olmo must be allowed to play.
The midfielder, signed from RB Leipzig last summer, already has made 28 appearances for his club this season and scored seven league goals. He has been part of a brilliant side, including the teenage sensation Lamine Yamal; his fellow academy prodigy Gavi; Raphinha, one of Europe’s best players this season and the great Robert Lewandowski – La Liga’s current top goalscorer. They are the best Barcelona team of the post-Lionel Messi era. But has it been founded on a lie?
How does FFP work in Spain?
La Liga FFP is relatively simple: the league sets a squad cost limit relative to the financial health of a club, primarily derived from revenue projection. It is why the likes of Barcelona and Real Madrid have become so obsessed with the €1 billion (£820 million) revenue target, even if all of that which is generated – and often more – goes out the club over the course of that 12 months. Both clubs have used debt-funding (the sale of future income streams) to boost their revenue, known as palancas – financial levers. Both favour the same Madrid finance house, Key Capital Partners, and the same US investor, Sixth Street.
In 2022, Real Madrid earned €360 million through a palanca deal, selling 30 per cent of revenue over the next 20 years, from the remodelled Bernabéu, to Sixth Street. The same summer, Barcelona sold 25 per cent of their domestic television rights income for 25 years to the US investor Sixth Street for €667.4 million. These future income sales are not considered FFP-compliant income by Uefa but La Liga accepts them. The problem for Barcelona was that all that up-front funding was not enough.
The club are around €3 billion in debt, including the borrowing for the new Nou Camp. They are also in a transfer arms race to sign players and will sell what they can to boost revenue to give them capacity under La Liga’s cost controls. One such asset was the media subsidiary Barca Vision, also known as Barca Studios. What is it? No one was sure. The club said it encompassed “Web3, NFTs and the metaverse” and there have been various buyers who have since fallen away. The club needed something they could book as a profit to fill the €100 million black hole.
On January 3, three days after the year-end deadline, the club announced that they had concluded a €100 million deal for the rights to an unspecified number of VIP hospitality seats in their as-yet unbuilt new stadium. It was suggested the deal for these rights had been concluded with unnamed investors from the United Arab Emirates and Qatar. Barcelona issued La Liga with a certificate that guaranteed the €100 million would be on their bottom line in the half-year accounts that were released this week. “Without said certificates,” La Liga said, “it would not have been possible to validate the accounting.”
That €100 million was central to La Liga’s squad cost calculation and by extension the right for Barcelona to include Olmo and Victor in their squad. By February, La Liga had grown suspicious about whether the deal had indeed been completed. It asked the Consejo Superior de Deporte (CSD), a government agency attached to MEFPD, to investigate. The CSD refused. Then last week, Barcelona dropped the bomb: their financial half-year results had no mention of the phantom €100 million. Despite the club’s assurances in January, that deal did not officially exist.
In its subsequent statement, La Liga noted that the club have changed auditors twice since the end of last year. Until December 31, Barcelona had instructed Grant Thornton. For the extension period it was granted for the three days until January 3, when they submitted their financial projections and that certificate assuring La Liga that the deal had been completed, there was a second, unnamed auditor.
Since January 3, Barcelona have instructed another, Crowe Auditores España. La Liga says that it has reported that second, as yet unnamed auditor, to the relevant Spanish fiscal regulatory body. But in the end it is not the reputation of the auditor that piques the interest. Rather it is the global brand built on success, skill and innovation that is FC Barcelona.
A cloud hangs over this season’s title charge – and potential Champions League triumph – under coach Hansi Flick. There is no doubt that Barcelona have failed La Liga’s regulatory threshold. Why did they push it so far before the revelation this week? It would appear that issuing a certificate to La Liga was one thing, but had the Barcelona board signed off a set of accounts with €100 million in it that did not exist, they left themselves at risk of accounting fraud.
Laporta has circled the wagons in response and used his alliances in government to push back. But La Liga’s statement could not be any clearer. “FC Barcelona,” it said this week, “did not have on December 31, nor on January 3, nor has it had since that date, nor does it have today, a balance or registration capacity, what is publicly known as ‘Fair Play’, for the registration of the players Dani Olmo and Pau Victor.”
The club at the top of La Liga, the second mightiest league in world football after the Premier League, has no legitimacy under existing financial controls for the current season, according to the body charged with regulating it.
How will this play out?
What comes next is not clear. Tebas is currently facing down the CSD, backed by its ministry the MEFPD. The CSD statement said it refused to acknowledge the legitimacy of the commission established by La Liga and the RFEF to declare the two players ineligible under squad cost rules. La Liga immediately responded by saying that, given this week’s revelations, the players should never have been permitted to carry on playing after December 31. It said it would appeal the CSD’s decision.
Notably quiet on all this have been Real Madrid, arguably the team with the most to lose. The European and Spanish champions trail Barcelona in the league and may also face them in the Champions League at some point. But Real and their president Florentino Pérez also need Barcelona. El Clásico is the great brand of Spanish football. There are at least two clásicos left this season alone: one in the final of the Copa del Rey on April 26 and then again in the league 15 days later, at Barcelona’s temporary home in Montjuïc. In October, Barcelona put four goals past Real at the Bernabéu and then five in the Super Cup in Saudi Arabia in January.
Spain’s big two have a historic rivalry but in recent years it has become a much closer alliance. Both are at war with Tebas and with Uefa. Both seek new revenue streams, and as a result both remain dedicated to the European Super League project. Then there is the financing of Sixth Street and the palancas that have sustained their spending. Key Capital Partners has worked for both, including the financing of the new Barcelona stadium complex, Espai Barca.
For Real, who also have debt in excess of €1 billion, including the borrowing for the Bernabéu refurbishment, there has been less drama of late and a lot more on-field success. The same has not been the case for Barcelona.
