Barca elections 2015

jamrock

Senior Member
when the media refer to debt, they actually mean total liabilities.

This includes what might be described as operational debt, such as: (a) trade creditors (payables) for amounts outstanding on bills for products or services received, e.g. rent, electricity; (b) money owed to staff, e.g. wages earned by staff paid at the end of the month, bonus payments; (c) other accrued expenses (accruals), which are the same as payables except no invoice has yet been received; (d) provisions, which are an estimate of probable future losses, e.g. legal claims; (e) and, most bizarrely, deferred income for payments received for services not yet provided, e.g. season ticket revenue for matches to be played in the future.


That last one highlights one danger of using liabilities as a definition for debt, as season ticket money received in advance is clearly not a bad thing, as UEFA explain: “It is recorded as a liability, as accountants consider the cash received as not yet being fully earned until the matches take place. This is a liability, but not a debt that will have to be paid back.”

So, much of Madrid’s €590 million and Barcelona’s €578 million debt includes liability for what might be termed normal operations. If we apply the same definition to Manchester United, they have debt (total liabilities) of just under €1 billion (£824 million converted at a rate of 1.20). Even Arsenal’s debt on the same basis is €524 million, which the journalists would no doubt describe as “eye-watering” if they were talking about others and not their template for a well-run club. To use an old adage, you have to make sure that you are comparing apples with apples.

Of course, if you wanted to make a club’s debt look as bad as possible, then you would absolutely use the total liabilities definition

The net debt reported in an English club’s financial statement will be in line with IFRS (International Financial Reporting Standards) and essentially covers purely financial obligations, such as overdrafts, bank loans, bonds, shareholder loans and finance leases less cash. On this basis, the gross debt of Madrid and Barcelona at €146 million and €150 million respectively is not only considerably smaller than the figure highlighted in the press, but is also much lower than Arsenal €310 million and Manchester United €551 million.

The difference is not quite so large for net debt, as both United and Arsenal have substantial cash balances, but the Spanish clubs are still lower: Madrid €48 million and Barcelona €89 million. Arsenal are much of a muchness with €117 million, while United are the outlier with a hefty €370 million.

In their Financial Fair Play (FFP) guidelines, UEFA introduce a third definition of debt which lies somewhere between the narrow calculation employed in annual accounts and the widest possible measure of total liabilities: “A club’s net player transfers balance (i.e. net of accounts receivable from players’ transfers and accounts payable from players’ transfers) and net borrowings (i.e. bank overdrafts and loans, owner and/or related party loans and finance leases less cash and cash equivalents).”

They go on to explicitly state, “Net debt does not include trade or other payables.” However, it does include the net balance owed on player transfers, which is a reasonable approach to take, as this can be an important element in the business model adopted by some football clubs, e.g. this amounts to €76 million at Madrid (actually down from €111 million the previous year and an astonishing €211 million in 2009), though it is only €12 million at Arsenal, which probably comes as no surprise to those fans that have been exhorting the club to spend some money.


The major concern is obviously the debt, which Javier Faus said was “the biggest in the club’s history.” We’ve not been given the full details yet, but the adjusted figure released by the club was gross debt of €552 million (net debt €442 million). However, we do know that this represents total liabilities and is thus misleadingly high, as it includes trade creditors, accruals and even provisions. In fact, Rosell and his cohorts should be ashamed of this needless scaremongering, which is not consistent with standard accounting practice – or, indeed, UEFA’s definition, which explicitly states, “net debt does not include trade or other payables.”

As an example of how absurd the total liabilities definition is, just look at how high other clubs’ gross debt would be using this measure: Real Madrid €683 million, Liverpool €578 million and Manchester United €1.1 billion. Even Arsenal, which is regarded as the template for financial sustainability, would have “debt” of €767 million (though it’s come down a lot since the last annual accounts). This places Barcelona’s €552 million firmly into context. To use an old adage, you have to compare apples with apples.

Under UK accounting practice, net debt includes bank overdrafts and loans, owner and/or related party loans and finance leases less cash and cash equivalents. Under this definition, Barcelona’s net debt in last year’s accounts was actually only €20 million, compared to Rosell’s total liabilities of €489 million.

The truth is that Barcelona’s real debt lies somewhere between the narrow UK accounting definition and the new board’s widest possible measure.
 

jamrock

Senior Member
all that being said, let us not forget that under laporta our revenues tripled, only real Madrid have done that in a similiar time span under perez and that was without a shirt sponsor
 

jamrock

Senior Member
Let us also not forget that he won his case in court against this board, about debts and how they were calculated, please lets not try and tarnish the mans reputation, because highish debts, and thats the best you can call them, happen under his watch.

but they have to, because they can't attack his record on the field and they cant attack how he grew our revenues at almost a record pace.
 

MessiDinho10

New member
It's also a fact that under this board the annual growth of revenue decreased and other clubs caught up with and passed us. We used to be in the top 3, and now we have dropped a few places.
 

jamrock

Senior Member
It's also a fact that under this board the annual growth of revenue decreased and other clubs caught up with and passed us. We used to be in the top 3, and now we have dropped a few places.

yep was going to point out that too, and these guys are supposedly the financial geniuses
 

JamDav1982

Senior Member
It's also a fact that under this board the annual growth of revenue decreased and other clubs caught up with and passed us. We used to be in the top 3, and now we have dropped a few places.

Which is in part to the manufacture deal and shirt sponsorship deal coming to the end of their days. Barca not opting for stadium naming rights and the huge leap in TV deal in England.

The club is better set on the revenue side with huge options to expand that side of it further should they wish.
 

jamrock

Senior Member
Which is in part to the manufacture deal and shirt sponsorship deal coming to the end of their days. Barca not opting for stadium naming rights and the huge leap in TV deal in England.

The club is better set on the revenue side with huge options to expand that side of it further should they wish.

Thanks to laporta.
 

jamrock

Senior Member
No thanks to a whole number of people in Barcelonas history including current board, past boards not just down to Laporta.

Yeah okay, because others in out history and this current board, has tripled out revenues in 8 years, having us in the top 2 richest clubs in the world during their tenure, when we were coming from nowhere, all while not signing a shirt sponsor, something i am sure he would do by this, but for crazy money.
 

MessiDinho10

New member
Which is in part to the manufacture deal and shirt sponsorship deal coming to the end of their days. Barca not opting for stadium naming rights and the huge leap in TV deal in England.

The club is better set on the revenue side with huge options to expand that side of it further should they wish.

The shirt sponsor deal was too low to begin with. When it was negotiated Barça was the best team in the world and we should have had the highest sponsor deal of all clubs (maybe the same as Man United). Instead we were not in the top 3 or even top 5 of annual sponsor money.

English clubs, even Chelsea and Man United, still don't get as much money from tv-rights as Barça and Real Madrid do (not nearly), yet their revenues are higher than ours is. Sponsor deals may not be up to date, but there are a lot of options to gain revenue whilst still keeping the club values intact (so no stadium naming rights). This board did not do that "as well as" Laporta and co did, and the numbers show it.
 

JamDav1982

Senior Member
The shirt sponsor deal was too low to begin with. When it was negotiated Barça was the best team in the world and we should have had the highest sponsor deal of all clubs (maybe the same as Man United). Instead we were not in the top 3 or even top 5 of annual sponsor money.

English clubs, even Chelsea and Man United, still don't get as much money from tv-rights as Barça and Real Madrid do (not nearly), yet their revenues are higher than ours is. Sponsor deals may not be up to date, but there are a lot of options to gain revenue whilst still keeping the club values intact (so no stadium naming rights). This board did not do that "as well as" Laporta and co did, and the numbers show it.

Was the Barcelona shirt deal not a record when it was signed?

Sadly the standard of team doesnt always play the determining factor when it comes to sponsorship.

More people watch the EPL and even the bottom EPL teams will get higher sponsors than the likes of Sevilla.

Man Utd and Chelsea got big deals based on the Asian market, Barca dont have the same pull for things like that.
 

MessiDinho10

New member
Was the Barcelona shirt deal not a record when it was signed?

Sadly the standard of team doesnt always play the determining factor when it comes to sponsorship.

More people watch the EPL and even the bottom EPL teams will get higher sponsors than the likes of Sevilla.

Man Utd and Chelsea got big deals based on the Asian market, Barca dont have the same pull for things like that.

No it wasn't a record, and Barcelona and Real Madrid are in a whole different league compared to teams as Sevilla and Villareal. The shirt manufacturing deal by the way is also a deal that's been too low since it was signed. b

Barça might not have the same pull as Man United in Asia, which is unbelievably huge, but it's is still one of the biggest clubs with the best player and arguably the best team in the world, and I feel you underestimate our pull in the markets you mentioned.
All in all, the shirt was worth a lot more than Barça received three years ago and it is worth much more than that now. To put it into perspective: our deal with Nike was negotiated when we had Messi playing for the club, the best player in the world, who has a contract with Adidas. Imagine how bad Adidas wants to be the shirt manufacturer of Barcelona, so that they sponsor both Messi and the club he plays for. Barcelona's position in the negotiations with Nike is therefore very strong. The club, and therefore the board since its their job, should have capitalized on that when negotiating with Nike, but they didn't, which is evident through the amount of money Nike pays the club annually. I'd say we could have negotiated a deal close to Manchester United's shirt manufacturer, but instead we get much, much less.
 

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