Joan Laporta: 'Together we have saved the Club'
This Sunday’s FC Barcelona virtual Ordinary General Assembly began as is customary with the President's report. Joan Laporta summarised the Club's institutional and financial situation, justified the use of the ‘levers’, provided details on the operations that have affirmed the importance of the institution's assets, and put forward reasoning for supporting the ‘Super League’ as a solution that football needs, while also emphasising that Barça will always be committed to defending its governance and ownership model.
At such an historic time for an institution that is almost 125 years old, the FC Barcelona president began by thanking and highlighting the importance of members via their support for the decisions taken by the Board of Directors to improve the Club’s situation. "Together we have saved the Club", said Laporta, emphasising delegate members’ trust in the Board to reverse the situation they "inherited" in March 2021, which they achieved by "investing significant doses of talent, knowledge, perseverance, imagination, bravery and audacity”. However, he acknowledged that “we definitely couldn’t have managed it without your understanding, without your strong support for all things FC Barcelona”. All the same, Laporta requested to continue "working very thoroughly" to stabilise the institution and concrete the change in trend. "To look forward and build the best Barça in history again".
Subsequently, the president harked back to the Club’s very delicate situation, with a debt of 1.35 billion euro, much of which was due over the short-term; net negative assets of 451 million and an exorbitant wage bill, a lack of governance and internal control “that was on the point of leading to collapse”, and “meaning a number of defaults with banks, even going against the Statutes themselves”. With this scenario in mind, Laporta reasoned that we "could have thrown in the towel, with the subsequent collapse and financial ruin, or we could have sought out your financial support, which was undeserved as you weren’t responsible for the terrible management in the past”. The Board of Directors didn’t entertain either option, rather opting for “rolling up our sleeves, working hard in the right manner to create excitement, fulfil all our desires for the full FC Barcelona experience, and to enjoy ourselves”.
A Strategic Plan to return to a leading role
Laporta also explained that the Board of Director’s Strategic Plan, based on getting back to being a leading club, includes a sporting excellence model to create a competitive team that can win everything, which works to achieve a committed club model, prioritises every decision that safeguards the ownership model, with actions such as online membership registration, the digitalisation of the social sphere, and the option for season ticket payment in instalments. Diversity, inclusion, and sustainability criteria have also been included, with the Foundation restructured, incorporating the alliance with ACNUR/UNHCR, and as the President stated, creating the wonderful Fundación Barça Genuine team.
After making every effort "to apply intensive care to alleviate the Club’s needs" during the three month period in charge during the 2020/21 season, the 2021/22 season "has been a transition towards financial, institutional and sporting stability", while this 2022/2023 season "has to be the season to lay the foundations to return to a leading role in football", explained Laporta, adding that this "is only achievable with a highly competitive team, allied with responsible and sustainable financial management”.
With respect to the finances, the president explained that the Club has managed to change the negative trends, "stabilising liquid assets over both the short and long term, and remedying the net negative asset situation". As such, the Club managed to close the 2021/22 financial year with a net profit after tax of 98 million euro, “and we have increased income to 1.017 billion, while also reducing costs. These actions have been reflected by the improvement in credit rating to BBB. The budget for this season includes a record income forecast of 1.255 million euro, and we expect to end the season with positive results forecast to be 274 million”.
Spotify in Catalan
The Club’s strength of "adopting a leadership and ambitious approach to work" has enabled the establishment of strategic alliances, such as the agreement with Spotify from July 1 of this year. This is "an alliance that goes beyond simply finance" the president continued, "proudly” announcing that the audio streaming platform app will be available in Catalan from October onwards, an example of the Swedish company “having understood our culture from the outset, and their commitment to Catalan, the Club’s official language, is testament to precisely that”.
Resource use optimised while ownership retained
The activation of the ‘levers’, which Laporta defined as “operations to optimise our resources and emphasise the importance of the Club’s assets in order to be able to strengthen our team”, is another example that Barça remains very much alive as an entity, with an impressive ability to attract capital, to generate income and, "most importantly”, emphasised the president, “while preserving its independent governance and ownership model".
The ‘levers’ have breathed life back into the entity, but Laporta also warned that “we cannot become complacent until the entity has grown stronger again, which won’t be the case until no additional extraordinary resources need to be activated. Barça cannot be activating ‘levers’ forever”.
Contributing to European football sustainability
Laporta continued by making a statement on the financial situation among football clubs, which he considers "very worrying" and reminded that 38 Spanish clubs had to agree to the CVC ‘lever’, which offered "not very recommendable” financial terms. When it comes to Barça, "we have had to use the financial ‘levers’ required to ensure our future", but the solution does not involve continuing to activate ‘levers’, rather in creating an appealing and strong competition that puts an end to state-supported clubs’ privileges. "This is why we have always supported the creation of the ‘Super League’ because we believe, and continue to strongly believe, it is the solution football needs", particularly football in the European Union.
Barça’s president believes that the former board of directors “committed the mistake of attempting to compete financially with the unsustainable pace set by state-supported clubs”, competitors with an advantage “as no one supervises them, they are not subject to any financial fair play restrictions, and financial doping continues unchecked”. He acknowledged that this is one of the main reasons why Barça support the project. The president also criticised that UEFA should put a stop to these practices, but that it hasn’t happened so far, rather “that they do the opposite".
Convinced that the ‘Super League’ is the solution for the European football crisis, Laporta stated that Barça "will fight for the ‘Super League’ model", will work to create an open competition, with the best criteria regarding professionalism, based on meritocracy and total respect for national leagues. "We have worked to right Barça’s situation and we want to contribute to European football’s sustainability, and this is so clubs can define their own destiny".
However, until the ‘Super League’ comes to fruition, the Club has used the ‘lever’ regarding the 10% of TV rights sold to Sixth Street, generating extraordinary income of 267 million euro. Laporta outlined the operation included the registration of a company called Locksley Invest, with the club being 49% shareholders.
Barça TV and Barça Productions, 100% Club owned
The second ‘lever’ regarding the 15% for Sixth Street "led to further income of 400 million", but it "wasn’t enough for LaLiga", said Laporta, meaning the third ‘lever’ had to activated, regarding exploiting a minority share of Barça Studios and the digital business to Socios.com and Orpheus Media, an operation "that we are particularly proud of" and which generated 200 million euro in income. Laporta emphasised that this operation did not include Barça TV, "which will have new scheduling from tomorrow and will prove a very appealing TV channel" or the content producer, Barça Productions, which remain 100% Club owned. The Club did open up the exploitation of the audio-visual digital sector, which includes examples such as NFTs, the Metaverse and Fan Tokens, which are still to be developed. A subsidiary company to Barça Studios has been created for this purpose, Bridgeburg Invest, which will manage these new digital formats, in which Barça maintains a 51% majority stake.
Laporta acknowledged that "the ‘levers’ were exceptional measures during an exceptional period that required bravery and audacity to reverse the Club’s financial and sporting situation". He went on to condemn that, despite having generated 867 million euro through the ‘levers’, "LaLiga continued to state that it was insufficient, and we even had to deposit a personal guarantee of 10 million euro with the LFP in order to register Kounde”, an operation that he revealed “also involved Mateu Alemany”.
Lastly, President Laporta closed his speech with a commitment to independence and a message for "those who want Barça to fail or who have been tempted to steer the Club’s direction", in that "Barça will continue to decide its present and its future”.