Within just a few days, the true scale of Barcelona and Real Madrid’s perilous situation became clear.
First, on Wednesday, January 27, Real Madrid revealed accounts that put the club’s total debt at a staggering €901 million. Days later, on Sunday, the intimate details of Lionel Messi’s €555 million Barcelona contract were exposed in the Spanish press. No athlete has ever been paid more through a single contract.
The Camp Nou's current debt totals at over €1.1 billion with around half of that sum to be paid bank imminently. Barcelona and Real Madrid are arguably the two biggest clubs in world soccer and yet they both face a very real existential threat. It’s not beyond the realms of possibility that one, or both, of Spain’s big two could fall into financial oblivion.
Real Madrid at least have some tangible explanation for their current financial state. The €525 million redevelopment of the Santiago Bernabeu is well under way, with Zinedine Zidane’s side presently playing their home games at the club’s training ground near Madrid’s Barajas Airport. That has been the case since the start of the Covid-19 pandemic when a decision was made to accelerate construction, as supporters were not allowed in the stands.
This project will see Real Madrid’s spiritual home become one of the most modern, cutting edge arenas in all of sport. There will be a financial payoff once the redevelopment is complete, with Real Madrid adding significantly more hospitality suites and facilities. In this sense, the capital club can claim that a significant portion of their debt represents an investment in the future.
However, Barcelona can’t really make that argument. The Catalan club has stadium redevelopment plans of their own, but the Camp Nou remains untouched, a crumbling emblem of the general deterioration of the organisation as a whole. Barca’s debt is reflective of the boardroom mismanagement and recklessness that has characterised the last decade or so.
Years of ill-judged transfer market activity has contributed in taking Barca to this point. Not only have the Catalans splurged close to €1 billion on new signings that have barely improved the first team over the last 10 years, their wage bill accounts for 74 per cent of the club's total income. For so long, a transfer market arms race forced Spain’s big two to keep outdoing each other. Now, the two clubs are reckoning with the damage. And in Barcelona's case, the instability of the current board — who have already delayed the much-needed presidential election — will only breed longer-term pain
Barcelona and Real Madrid’s off the field problems have permeated their results and performances on the field this season. Atletico Madrid have a 10-point lead at the top of La Liga, with Diego Simeone’s side already champions-elect in the mind of many Spanish soccer fans. Barca and Real Madrid have struggled for consistency all season long.
A period of cost-cutting will be required for both clubs to recover and this could reshape the Spanish—and European—soccer landscape. Barcelona and Real Madrid have positioned themselves at the top of the sport’s food chain in the 21st century, with soccer’s brightest and best players naturally drawn to Catalonia and the capital. Inherently, food chains don't change. The apex predators are expected to remain so, such is the balance of nature. Now, what many long assumed was the natural order in the footballing world could rapidly be re-written.
The cost-cutting has already started. Luis Suarez was allowed to leave the Camp Nou last summer with no direct replacement for the Uruguayan striker. The club’s senior squad have taken pay cuts following lockdown, but the wage bill needed taming even before the Covid-19 pandemic hit.
Lautaro Martinez was linked with a move to Barcelona last summer, but no transfer materialised as the Catalans club lacked the necessary funds. The signing of Miralem Pjanic from Juventus was only facilitated through a swap-deal involving Arthur. Meanwhile, Real Madrid haven’t made a single new signing in any of the last three transfer windows.
If ever there was an opportunity for Spanish soccer’s duopoly to be broken, it’s now — and that’s an opportunity Atletico Madrid, who have significant debts of their own, appear to be taking. The door is also open for clubs across Europe to walk through, with Premier League clubs like Liverpool and Manchester City finding it easier to keep hold of their best players.
For years, European soccer has been tilted towards Spain’s big two clubs. Barcelona and Real Madrid dominated an entire era of the Champions League and had their pick of the sport’s biggest names. Philippe Coutinho, Antoine Griezmann and Eden Hazard, just to name a few, all felt the allure of the two giants.
That allure, however, isn’t so strong when the money isn’t there to keep Barcelona and Real Madrid competing at the top of the domestic and continental game. Manchester City defender Eric Garcia has reportedly agreed to forego pay for a season in order to facilitate a return to the club where he received his academy education, but Barcelona won’t have sentimentality on their side in every transfer pursuit. These could be lean times for Spain’s big two. The established order of European soccer could be about to shift.