Cash-strapped Barcelona ‘beg banks to delay huge repayments of £178m amid fears club could go BANKRUPT’ after LaLiga giants’ debts doubled in a year due to Covid-19 pandemic
- Barcelona have reportedly asked major banks to delay debt repayments owed
- Club accounts last year revealed debt has doubled in the space of 12 months
- Spanish reports say the club have asked for £178m repayments to be delayed
- Interim club president Carlos Tusquets says the wage bill consumes the budget
Barcelona have reportedly asked a host of major banks to delay debt repayments so that the club can avoid insolvency, in an alarming development for the club’s supporters.
According to El Confidencial via Football Espana, the Catalonians have requested from Goldman Sachs, Allianz, Barings, Amundi and Prudential a dispensation for failing to financially comply, which points to a non payment of approximately £178m.
The LaLiga side reportedly have a negative working capital of £535m, with a further £89m owed to other lenders.
Barcelona have asked a host of banks to delay the repayment of £178million debt owed
Barcelona announced during the 2019-20 season that it expected to be the first club to break the £1bn barrier for income in a single year in football, however that figure was blown off course by the coronavirus pandemic.
And last October, the club announced that the club’s debts had doubled in worrying new financial results for the 2019-20 season.
Marca revealed that the club’s debt had skyrocketed from £193m to £434m in the space of 12 months, from June 2019 to June 2020.
As a result, the club have made cuts to its first team squad in a bid to reduce the wage bill, with a reported £71m slashed from the books after the sales of Nelson Semedo, Arthur, Ivan Rakitic and Marc Cucurella.
The club’s debts have doubled in the space of 12 months with insolvency feared by chiefs
The wages of Barcelona’s star-studded squad are said to take up to 70 per cent of the budget
There has been considerable turmoil at the club since last summer, in which Lionel Messi’s feud with Josep Bartomeu exploded into the public domain with the Argentine looking to force his way out of the club.
The club hierarchy disputed the eligibility of a release clause in his contract and, in a bid to avoid a lengthly legal battle with the club, Messi opted to stay this season.
Bartomeu has since resigned as president, and interim president Carlos Tusquets revealed to Catalonian radio station RAC1 that the club have failed to pay players for their pre-agreed January salary.
The next president will have to deal with the club’s finances as a matter of priority (pictured: former Barcelona president Josep Bartomeu)
Player wages have consumed most of the club’s budget, with Tusquets previously revealing that the salary of the squad was at 70 per cent of the total budget available at the club.
Barcelona were set to elect a new president early this year but that has been delayed as a result of the coronavirus pandemic.
The next president and his board will have to deal with the situation as a priority, with €420m of that debt owed in the next 12 months.
That is something the club cannot currently afford, and so a expensive restructuring of those debts will likely be needed, throwing the club into a further financial hole.