Barcelona’s horrendous losses during the lockdown should lead Uefa to question whether its financial fair play rules are taking aim at the right targets. It won’t.
The Catalan club has just announced that their debt levels have doubled due to the pandemic, so they are now in the red to the tune of £444million, double the £198million debt from last year.
They say the blame lies with the lockdown, which turned the small profit they made last year into an £88million loss.
Obviously, all clubs have to be given some leeway in such difficult times, and to claim clubs should be punished for failing to live within their means when we are living through such difficult times, would be perverse.
But the very fact that they have been hit so hard by the pandemic and are so vulnerable to an economic down-turn, calls into question which ownership model is best.
Barca can sail serenely on into the depths of a financial maelstrom without even getting a warning shot across the bows from the club financial control body (CFCB) which regulates financial fair play (FFP).
The whole concept of FFP was meant to be a response to the way football clubs, just after the turn of the century, were being plunged into financial difficulty by living beyond their means, often led by owners or chief executives who gambled on spending to bring success which would make the outlay worthwhile.
But those early FFP pioneers also wanted debt to be targeted, more specifically the leveraged debt with which clubs like Manchester United and Liverpool were burdened by takeovers.
Supporters groups at both Old Trafford and Anfield urged the authorities to outlaw leveraged takeovers, correctly predicting they would lead to problems.
But when Uefa picked up the FFP ball and ran with it, under Michel Platini’s leadership, the concept was bent out of shape, for no good reason.
Debt ceased to be an issue – we were told it was because debt is a normal part of life, from mortgages to the vast borrowing which major corporation make in order to carry out big capital investments.
Instead, the clubs targeted by FFP were those with rich owners who had been investing their own money into those clubs. The clubs were, bizarrely, being protected from their owners, who could up sticks and leave them with commitments they could not possibly meet without the income provided by those owners.
You do not have to be an economist to work out that binding those owners to their commitments by making them sign bank guarantees, would be a much more sensible practice.
The rationale then evolved into the notion that, actually, FFP was not protecting clubs from unscrupulous or fly-by-night owners, it was protecting everyone else from the vast resources those “sugar-daddy” clubs could employ,
Having clubs like City and Paris Saint-Germain, with impossibly wealthy owners, was bound to inflate transfer fees and wages, forcing a financial arms race which would send OTHER clubs to the wall, as they tried in vain to keep up.
No longer was FFP protecting clubs from their own owners, it was protecting other clubs from those owners. Apparently.
The problem was that the traditionally powerful clubs were STILL the clubs which were paying the biggest wages and highest transfer fees, although PSG got involved in that in spectacular style.
City’s highest wage and top transfer fee are still both way behind the figures paid by Barcelona, Real Madrid, and Manchester United – and it is pushing up the ceiling on fees and wages which creates inflation.
Given that debt was portrayed as normal business practice, you would think owner investment would be viewed in the same way.
But in Uefa’s wibbly-wobbly world, an owner putting money IN was seen as bad and unhealthy, while owners taking money OUT to pay the debts incurred in buying clubs, or spending money with no realistic checks, was perfectly natural.
Barcelona are a different case. Often portrayed as an idyll of ownership, as they are owned by their supporters, they are still a flawed entity, with many ordinary fans priced out, and club politics proving wearisome – as Pep Guardiola found out – and damaging.
They have been allowed to rack up debt, with the Spanish state among the debtors, with few questions being asked.
Yet in Manchester, City were hit with an FFP punishment despite being debt-free and owned by someone who was clearly following a business plan – boosting commercial, infrastructure and academy outlay as well as buying players – with the intention of making them self-sustaining.
City are now at that point, in the top bracket when it comes to making money as well as winning on the field, and with FFP worries left in the past.
Meanwhile, over at the Nou Camp, the debt stacks higher, the future becomes less and less certain – especially as they launch into a massively expensive overhaul of the stadium – and Uefa and the CFCB have no powers to intervene.
A system aimed at stopping clubs getting into dire financial straits which ignores debt which is being stacked to floodlight height, but instead penalises investment. It is Alice In Wonderland-level potty.