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Lewandowski, Laporta & levers: Barcelona risk bankruptcy with biggest bet in club history

07:00 BST 23/07/2022
Robert Lewandowski Joan Laporta Barcelona GFX 16-9

Europe's super clubs are a bit like banks. They may be even less responsible with money but they certainly buy into the concept of being 'Too big to fail'.

In the world of economics, the idea is that certain banks should not be allowed to go under, no matter how badly they are run. As we saw during the recession, some governments decided to intervene when banks left themselves on the verge of bankruptcy, offering financial support in order to ensure that they could continue trading.

One could understand the governments' thinking, to a certain degree at least. It was essentially deemed the lesser of two evils. While the banks only had themselves to blame for their perilous positions due to gross mismanagement, their collective collapse would arguably made a dire situation even worse for the average person, creating economic chaos.

However, there are several problems with adopting the 'TBTF' approach. For starters, as former Federal Reserve Chair Ben Bernanke pointed out, "Too-big-to-fail (TBTF) firms will tend to take more risk than desirable, in the expectation that they will receive assistance if their bets go bad."

Which brings us nicely onto FC Barcelona, the ultimate example of Europe's 'super-clubs' and their staggering sense of entitlement.

  • Ousmane Dembele FC Barcelona Josep Maria Bartomeu

    How Bartomeu brought Barcelona to its knees

    Josep Maria Bartomeu infamously put the 'TBTF' theory to the test, leaving Barca on the verge of bankruptcy after a presidency characterised by enormous and superfluous spending.

    In an almost impressive display of sustained recklessness, he managed to fork out more than €1 billion (£900m/$1.1bn) on transfers between 2014 and 2019 – and wasted nearly all of it, signing just two good players during that time.

    On top of that, Bartomeu also arrogantly ignored La Liga's suggestion that no club spend more than 70 per cent of its annual revenue on wages.

    "The LFP and UEFA make recommendations but nobody sets a salary cap. We are above what is recommended but the important thing is to be sustainable. We can afford it." They couldn't of course. The pandemic exposed the fragile state of football's financial model.

    Bartomeu, though, had believed that Barca were "an exceptional case in the world of sport". And, in a way, he's right. It might be for all the wrong reasons, but Barca actually do live up to their motto: they are more than a club.

    They are not like everyone else. They certainly don't seem to play by the same rules. Or, at the very least, they have scant regard for them.

    How else to explain the fact that they've just signed Robert Lewandowski, Raphinha, Franck Kessie and Andreas Christensen – despite still being more than €1.3bn (£1.1bn/$1.33bn) in debt and not presently in a position to register any players for the 2022-23 season?

  • Laporta's shock summer spending spree

    You see, while the president may change at Barca, the approach to stellar signings remains the same.

    Indeed, Bayern Munich boss Julian Nagelsmann spoke for many within the footballing world this week when he remarked, "They got a lot of new players, not only Robert. I don't know how to be honest.

    "It's the only club in the world that can buy players without money. It's kind of weird and crazy."

    No arguments, there. But there are, of course, ways around football's fragile financial restrictions.

    We're all becoming experts in Barca's economic model at the minute. They have just introduced 'levers' into the footballing lexicon because of the way in which Laporta is trying to revive a club that was "clinically dead" when he took over from his predecessor, Bartomeu.

    He has undeniably taken smart moves to improve the club's financial situation. Wages have been cut. Unwanted players have been sold.

    However, there are still undeniable traces of the 'TBTF' attitude in his approach to putting Barcelona back on top of European football.

    He is clearly willing to "take more risks than desirable". The problem is that Barca may not be bailed out if their latest round of "bets go bad".

    Despite the precarious nature of their accounts, Laporta has decided against practising prudence for a couple of seasons, in the hope of slowly but steadily rebuilding the club.

    Instead, he has decided to go for broke.

  • Franck Kessie and Joan Laporta

    Laporta and his levers

    Laporta has just raised €582m (£495m/$591) by selling 25 per cent of the club's Liga broadcasting rights for the next 25 years, and now plans to raise further funds by selling 49.9% of Barca Licensing and Merchandising (BLM), which handles retail and marketing.

    Essentially, Barca are mortgaging their future in the hope that significant short-term gains will quickly put them back on their pedestal.

    And so, this summer, Laporta is pulling levers here, there and everywhere to temporarily alleviate the financial pressure on the club in the hope of building another winning team.

    Success, as they say, breeds success, on and off the field, and the belief is that if Barca start winning major trophies again, they'll reclaim their place at the top of the Football Money League, which let's face it, is what the modern game is all about.

    So, we know both how and why Barcelona are doing this, the question remains, though, whether they should be.

    And again, it's not really about the ethics or morality of all – alien concepts in the modern game – it's whether it's wise; if it will actually work.

  • Robeto-Lewandowski

    Lewandowski: Laporta's statement signing

    The problem, of course, is that it has to. Constantly refinancing loans and sacrificing future earnings is not a viable long-term business plan.

    Laporta's daring strategy can't afford to fail, and much will depend on Lewandowski: a statement signing, undoubtedly, but a necessary one? Arguably not.

    Barca are lacking in certain sections of the pitch but they addressed their lack of a goalscorer in January, by signing Pierre-Emerick Aubameyang, who proceeded to hit 11 goals in just 17 Liga appearances.

    Is Lewandowski an upgrade? Of course, he's arguably the most complete No.9 in world football right now.

    But he turns 34 next month. He says he feels "very strong physically" – and he looks it too. He also intends to continue playing "at the top level for many more years".

    He should certainly score freely in La Liga, and probably in the Champions League too.

    But it's hard to shake the suspicion that the money could have been better spent, which is probably a more fitting motto for modern-day Barca.

  • Robert Lewandowski-barcelona-transfer

    The Lewandowski effect

    The fans don't care, of course. They are snapping up Lewandowski jerseys at such a rapid rate that the club shop is running out of the letter 'w'. That's obviously unsurprising. After incessant and depressing talk of potential bankruptcy, their beloved Blaugrana have a new No.9 and a bona fide superstar, one that reinforces the idea that Barca remain an irresistible attraction for great players, no matter what state the club finds itself in.

    Lewandowski, after all, fought hard to make this transfer happen, so hard in fact that he upset Bayern with his antics.

    He hopes that both parties "can forget what happened in the past weeks" as "there were unnecessary things from both sides", which is effectively an admission that he forced the Bavarians into selling him.

    That is not Xavi's problem, of course. He is now in possession of a player that should enjoy playing in front of outstanding young midfield duo Gavi and Pedri.

    Ferran Torres, Raphinha and Ousmane Dembele should also provide sufficient ammunition for Lewandowski to show off his shooting skills.

  • xavi hernandez

    Defensive deficiencies

    Serious questions remain, though, over the defence, which is still being protected by a 34-year-old Sergio Busquets, and particularly in the full-back berths.

    Jordi Alba is 33 while Sergino Dest has yet to convince, which is why Barca are believed to be chasing both Marcos Alonso and Cesar Azpilicueta of Chelsea.

    However, Barca are confident of being able to bring in more players when Laporta imminently pulls lever three (the sale of shares in BLM).

    When they do, the pressure will be very much on. Nothing less than a successful season will suffice.

    They simply have to send a clear message to sponsors, creditors and investors that a previously clinically-dead club is alive and kicking once again.

    Because Laporta won't be able to resuscitate Barca a second time. There will be no more levers to pull if Lewandowski & Co don't deliver; no more assistance if this 'bet goes bad'.

    FC Barcelona are no longer too big to fail.