It didn’t take long for the jokes to start on social media in Spain when it became apparent that ‘levers’ were set to play a key role in Barcelona’s summer transfer activity.
The club has been labeled as FC Palancas by several fans, which translates to “Levers FC”.
Yes, if last summer at the Camp Nou was all about Lionel Messi and a fax machine, this one was dominated by talk of levers.
“Activating these levers will take us out of intensive care to a ward where we can receive more treatment and soon be out of hospital,” Barcelona president Joan Laporta said in June.
Here, Athleticism explain what it all means…
What just happened?
Barcelona have agreed to sell a further 15% of their future TV rights revenue to US investment firm Sixth Street. This is the second ‘lever’ as the club have marked these cash-generating moves, and comes after the first was activated earlier this summer when they sold 10% stake in future television rights to the same company.
Barcelona will receive 315m euros (£268m, $322m) from the deal and in total the club have accrued around €522m from the TV rights sale. Sixth Street now receives 25% of Barcelona’s TV revenue as members of La Liga for the next 25 years.
“We continue to move forward with our strategy and are pleased to have entered into this additional agreement with Sixth Street, providing us with a significant increase in capital strength,” Laporta said. “Over the past few weeks, we and Sixth Street have engaged and collaborated with a common understanding of what we seek to achieve for our organization, and we look forward to our long-term partnership.”
Why did Barcelona do this?
Barcelona have activated these ‘levers’ to ease the economic pressure they are under. This type of income will have an impact on the club’s salary cap, as decreed by La Liga, so that it can register new signings.
La Liga sets salary caps for each of its clubs, which are subject to the revenue reported by those clubs over the previous five seasons. Recording more revenue maximizes the money that can be spent on player salaries.
Barcelona were governed by the 3:1 rule – they had to recover €3 for every €1 spent on new player salaries. Now that’s the 1:1 rule, or €1 for every €1 that comes in.
What will Barcelona do with the money?
This gives the club room to improve their squad for the upcoming season. It is understood that activating this latest lever will allow new signings such as Franck Kessie and Andreas Christensen, who joined Bosman’s free transfers, to be registered as Barcelona players.
At the same time, it will still not be enough to include other newcomers, such as Raphinha and Robert Lewandowski. Barcelona still need to offload more salaries from the current squad before these two can be registered.
Players such as Neto, Samuel Umtiti, Oscar Mingueza, Riqui Puig and Martin Braithwaite weren’t included in the ongoing pre-season tour of the United States. They have all been encouraged to consider other clubs as they won’t have a guaranteed presence in coach Xavi’s squad for the coming season.
Key figures such as Frenkie de Jong are also on the list of potential departures. Barcelona are said to be happy to sell the Dutchman after reaching a deal with Manchester United over his transfer, but the 25-year-old midfielder is said to be happy with his life at Barcelona and isn’t considering a move.
United oldboy and Dutch international Memphis Depay is in a similar position. After joining them last summer on a free transfer from Lyon, the Catalans are reportedly ready to sell the striker in order to free up space on the club’s wage bill.
Meanwhile, Barcelona sources admit they are still working on After reinforcements to the team.
Defense is the main focus, with Chelsea’s Spanish right-back and captain Cesar Azpilicueta and Sevilla centre-back La Liga rivals Jules Kounde among the targets.
Chelsea are also interested in Kounde and are said to be in charge. Barcelona could consider other options if the 23-year-old France international ends up joining the Premier League outfit.
Wait, how are Barcelona going to find the money for this?
A third economic “lever” remains to be activated at Camp Nou.
This would include the sale of a 49% share of BLM, the club’s merchandising arm, Barca Studios, their audiovisual content producer, and the rights to exploit the metaverse and NFTs (non-fungible tokens).
FC Barcelona launches “In a way, immortal”, the first NFT artwork in the history of the Club, which will be auctioned at @Sothebys New York: a digital work of art recreating @JohanCruyffthe legendary kick and flying goal of 1973.
— FC Barcelona (@FCBarcelona) July 21, 2022
Barcelona are hesitant to pull that third lever but won’t hesitate to do so in the future.
What does this mean in a larger context?
Barcelona are racking up revenue this summer – but losing potential sources of income going forward.
These sales of TV rights will have an impact on their finances in the years to come. It has been reported in Spain, for example, that the sale of the 25% share of their TV rights could have a negative impact of 40 million euros on the balance of the next season.
However, the club remain hopeful of finding new ways to boost their commercial appeal if they provide Xavi with a good enough squad to fight for the top honours.
“Football waits for no one,” Laporta said this week when asked about his summer transfer strategy, in an interview with US television.
Barcelona firmly believe the best way to improve their revenue streams is to restore the competitiveness their first team have lost in recent years.
But, much like English and Welsh clubs spending big in the Championship in hopes of securing promotion to the Premier League, it’s a financial gamble.
(Top photo: Eric Espada/Getty Images)