Barcelona have been given a reprieve over €200m of their substantial debts, easing the financial pressure the club have found themselves under during the coronavirus pandemic.
Barça‘s finances weren’t in great shape anyway, partly owing to careless spending in the transfer market and an out-of-control wage bill. But the pandemic has taken things to another level. Their latest accounts posted losses of almost €100m, and their gross debt recently surpassed the €1bn mark.
Back in January it was reported that the club had pleaded to some of their investors for leniency, in an attempt to avoid defaulting on their debts and potentially going bankrupt. They asked Goldman Sachs, Allianz and Prudential for flexibility after they were unable to meet a payment of €200m.
While it’s unclear if that request has been granted, it is now being reported by Bloomberg that an unnamed group of European investors have agreed to ‘remove limits on indebtedness and financial expenses’ to the tune of €200m.
This essentially means that those debts are no longer an immediate problem for the club, and they can focus on meeting other payment deadlines for the time being. But they are a long way from out of the woods.
The reprieve means bankruptcy is less likely in the short-term, but the club are still in serious financial trouble. Their net debt – their debt after the value of their assets is subtracted – still sits close to €500m, and is only likely to get worse with no sign of a return to full normality any time soon.
Their financial troubles were one of the driving factors behind their decision to join forces with Real Madrid over the controversial Super League. They are one of three clubs, along with Real and Juventus, who are yet to abandon ship.