18+ GambleAware.org | Please gamble responsibly
Dr Rob Wilson is an expert in Football Finance at Sheffield Hallam University. He regularly commentates and panels in national and international media talking about the economic impact of promotion and relegation, the re-branding of football clubs and impact of governance and regulation on sport, appearing regularly on television for the BBC, Al Jazeera and ESPN, on national radio broadcasts such as Radio 5live and TalkSport and in print with the Wall Street Journal, Times, Daily Telegraph, FT and Der Speigel.
As the January 2022 transfer window came to a chaotic end, one of the headlines was the transfer of Pierre-Emerick Aubameyang from Arsenal FC to FC Barcelona – a club that, in 2021, posted a loss of €481m and has liabilities over €1.4bn. Analysts had expected Barca to trim their salary bill, moving players out of the club, not in! So, just how has this transfer been funded, and how on earth could a club with such obvious financial distress, afford one of the highest earners on Arsenal FCs books?
Like everyone in football, Barça took a big hit in revenue due to the coronavirus pandemic. From record revenues of €852m in 2019, 2021 witnessed a sharp drop – to €590m – highlighting the impact of playing games in an empty Camp Nou. Losses quickly followed totalling €583m over the last two years. With zero chance of complying with UEFA Financial Fair Play, attention rapidly turns to La Liga’s salary cost controls – partially explaining the release of their talisman, Lionel Messi to French giants, Paris St Germain.
Total liabilities (that’s the money Barça owe to others) total €1.4billion, and their net debt, €472m. Whichever way you look at the formula the financial fundamentals at Barcelona look bleak. The key contributing factor is a club that has overspent on signings, contracts, and salaries for years. Cue the head scratching question in the title of this article. Aubameyang is reported to have earned £300,000 per week at Arsenal – simply unaffordable in Barcelona’s current situation.
The equation is complicated further via the salary cost controls applied by La Liga – referred to as Registerable Squad Cost. It is calculated at league level and considers revenue, costs, and debt. The club is then given the figure by La Liga, which it can then spend on squad costs (salaries mostly) and transfer fees.
This ‘Registerable Squad Cost’ was reduced by La Liga by around €700m in 2020/21 – the early stages of the pandemic. Barcelona and Valencia were the hardest hit, seeing a 40% reduction from the previous year. By comparison, the two Madrid clubs, saw a 27% reduction. That left Barcelona in 2020/21 with €383m to spend – down from €671m. Owing to the financial challenges already outlined, this figure reduced further in 2021/22 to a maximum of €98m. With annual contracts totalling nearly €490m, these numbers simply don’t tally, and despite protests for flexibility, La Liga Chief Javier Tebas has remained resolute in his drive for financial sustainability.
“What we are trying to do is ensure our industry is sustainable, not just this season but in future seasons”.
LaLiga president Javier TebasLa Liga have stood firm on Aubameyang and Barcelona await his final registration. What Barça have been told is that he would be their last signing and could only use what was left in their squad cost cap – around €2.5m – meaning that the player would have to take a significant pay cut to move from Arsenal and move on a free transfer.
To make the deal work, Aubameyang had to formally become no one’s player. He waived his claim to his £300,000 a week for the next 18 months in addition to a payoff. This paved the way for his switch to begin. Aubameyang will reportedly earn €2.5m this for the first six months of his contract (the allowable amount) before presumably discussing new terms when the salary limits will be set again – most likely higher than the present season as fans return to grounds and revenue has returned to pre-pandemic levels.
Expect Barcelona to move more players on in the summer as well – Coutinho (already out on loan) and Dembele the most likely. This will provide Barça with some more breathing room, at least until Aubameyang’s salary increases and most likely makes up for what was ‘lost’ in the first instance.
References:
![](data:image/svg+xml;utf8,<svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 50 50" width="50px" height="50px"><path d="M 5.9199219 6 L 20.582031 27.375 L 6.2304688 44 L 9.4101562 44 L 21.986328 29.421875 L 31.986328 44 L 44 44 L 28.681641 21.669922 L 42.199219 6 L 39.029297 6 L 27.275391 19.617188 L 17.933594 6 L 5.9199219 6 z M 9.7167969 8 L 16.880859 8 L 40.203125 42 L 33.039062 42 L 9.7167969 8 z"/></svg>)
