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Barcelona to pay off €100m in wages with bank loan

FC Barcelona president Joan Laporta / LLUIS GENE/AFP via Getty Images

According to sources from ESPN, Barcelona president Joan Laporta has secured a loan from an American investment bank which will allow him to use €100 million ($122m) to settle outstanding payments owed to the players.

Laporta will be able to call on a credit line of up to €500m in total, according to ESPN sources, but will only use €100m for now to pay wages owed to the squad since January. Barca’s players have been paid a relatively low monthly salary, with the bulk of their earnings covered in two instalments — one paid in December or January and the other at the end of the season.

The coronavirus pandemic has accelerated Barca’s financial problems and allowed the club’s gross debt to rise to almost €1.2 billion. Since the start of the pandemic, Barca’s players have agreed to various measures to help the club, including a three-month pay cut last March and a payment deferral scheme earlier this season, but the club have still struggled to keep up with payments.

According to sources from ESPN, there was a genuine fear that if the club could not make up around 40% of the wage bill owed in backdated payments, the issue could have been taken to the Spanish Footballers’ Association [AFE]. That could have led to potential sanctions for Barca, hence the loan secured by Laporta is all the more significant for the club.

Barca’s annual report budgeted for €230m to be paid in salaries to the first-team squad for the 2020-21 season. The first thing Laporta did after being elected as president in March was to order an internal audit of the club’s finances. That audit is still ongoing but, in the meantime, a club source confirmed that a more staggered repayment plan has been agreed with some of the note-holders of the short-term debt.

According to the club’s accounts, released in January, of the €1.173bn gross debt, €265m was owed to banks before June 30. Over €100m is also owed in amortisation on previous signings, in addition to what is owed to the players. Barca had hoped that a €350m cash injection from the European Super League would ease their financial problems, but the collapse of the project forced them to seek alternative routes of investment.

The club is considering selling the naming rights to the Camp Nou and there remains an option to sell a stake in Barca Corporate — a business that houses the Barca Academy, Barca Innovation Hub, Barca Licensing and Merchandising and Barca Studios — but a source says that the loan has bought the club some time.

Barca will still have to work on further reducing the wage bill and selling players this summer, but according to sources from ESPN, Laporta continues to explore ways to make a statement signing ahead of next season to improve the team’s chances in La Liga and the Champions League.

Laporta is also working on a two-year deal with the option for a third year for Lionel Messi, who is out of contract in June, and also has a decision to make over coach Ronald Koeman, with various sources claiming that there are doubts over the Dutchman’s future.