The audit reveals serious management deficiencies on the part of the previous Board of Directors, in whose mandate the salary bill was increased by 61% in three years, management expenses by 56% and financial costs by 600%.
The due diligence (audit) commissioned by the new leadership of FC Barcelona from Deloitte reveals lack of control and improvisation in the day-to-day management of the club and the transfer policy in the stage of Josep Maria Bartomeu, whose management shot up the wage bill by 61% in three years and left a debt of 1,350 million until March, including future commitments.
The general manager of the club, Ferran Reverter, has explained this Tuesday, in the presentation of this due diligence in the 1899 Auditorium of the Camp Nou that, in parallel to this audit, the club has commissioned a ‘forensic’ report (a thorough investigation of the club’s operation), which should be ready in the next “days or weeks”.
This research focuses on three areas: Espai Barça, intermediaries and suppliers. “When the forensic is over, Barça will decide what is the best way to proceed, if a liability action or other types of legal actions correspond. We will decide. Now it would be hasty,” Reverter pointed out.
The audit reveals serious management deficiencies on the part of the previous Board of Directors, in whose mandate the salary bill was increased by 61% in three years (from 471 to 759 million euros), 56% of the expenses of management and 600% financial costs.
Reverser stressed that the new Board of Directors, headed by Joan Laporta, was found when taking the reins a club a “disastrous and improvised” management of the previous meeting, which left the entity “with a negative equity and in a situation of accounting bankruptcy, with a null operating cash flow and with difficulty paying even the payroll”.
The audit commissioned confirms that the signings were made at high prices and including clauses that triggered salary costs, such as bonuses for the end of contracts. And Reverter has pointed out that, had it not acted, the wage bill in the 2021-22 season would have amounted to 835 million, 108% above recurring income.
Along these lines, the analysis has also found relevant and unusual intermediation expenses in previous years, such as commissions in player purchase and sale transactions. “of between 20 and 30% percent”, compared to the usual 5%.
Without citing names of footballers, he has said that the previous Board signed a player a salary of 9 million in his first season, which then jumped to 19 million in the second and 28 million in the third.
The audit analyzes the club’s management during the 2018-19, 2019-20 seasons and the nine months of 2020-21 until March 31, when the new Laporta Board of Directors took office.
The due diligence also surfaces practices such as deleting emails from club employees 90 days after they left the entity, and denounces that on many occasions the managers did not use the club’s computers or that they redirected the emails received in their official accounts of club email to private email accounts. That has made it even “more difficult” to know “the day-to-day operation of the entity,” he pointed out. Reverser.
Lack of investments in sports facilities, of internal controls in the club or undervaluation of the cost of projects such as Espai Barça, initially estimated at around 600 million euros and which could end up costing more than double, are other complaints of the inheritance received by the current management team based on the audit data.
As for the club’s financial debt, it increased by 514 million in three years, going from the 159 million owed in June 2018 to the 673 accumulated in March 2021.
The total debt of the entity, including other commitments and various liabilities, reaches 1,350 million euros, as the president Joan Laporta already advanced a few months ago.
And it is that to the financial debt we must add the postponements of player salaries, estimated at 389 million, the ongoing litigation due to probable risk, which adds up to 91 million (the club accumulates litigation with possible or remote risk for another 321 million), commitments related to Espai Barça for 56 million or anticipated income from part of the audiovisual rights of the next season for 79 million.
In addition, Reverser has denounced that the Camp Nou had structural problems (more than 900 pathologies pending to be solved) that have forced to invest 1.8 million euros.
And he has specified that, in the situation in which he was, the stadium would not have been able to open its doors if the restrictions due to the pandemic had been lifted earlier. “To fully update the stadium we will have to spend 23 million”, specified the top executive of the Barça entity.
On the other hand, Reverter has confirmed that the club plans to close the 2021-2022 season with 5 million profits, and that the 2020-2021 financial year ended with 481 million losses due to having entered 631 million and having had expenses of 1,136 million.
In this sense, the general director of the FC Barcelona explained that the losses of the past year due to the impact of the COVID, according to the criteria of The league, it is estimated at 91 million.
“Therefore, even without the pandemic, Barça would have lost 390 million last season,” concluded Ferran Reverter.