MADRID, Oct 6: Barcelona was technically bankrupt when president Joan Laporta took over earlier this year, the club said Wednesday.
Barcelona CEO Ferrán Reverter presented a grim picture of the club’s financial situation while releasing the results from a Deloitte audit that started after Laporta arrived in March following the resignation of former president Josep Bartomeu and his board of directors last year.
Reverter said the audit concluded that “there have been serious administrative deficiencies” during the administration of Bartomeu, who in the past has denied being responsible for the team’s current financial struggles.
“The new board of directors and its new executive structure encountered an economic and financial situation marked by negative equity and in a situation of technical bankruptcy,” Barcelona said.
Reverter said the new administration found debts and future liabilities of 1.35 billion euros. “There was no operating cash flow as the club struggled to pay all the salaries,” he said. “There was an urgent need for refinancing.”
He said the new administration had to fully restructure the club’s debts and drastically reduce its payroll to start getting back in shape, which was one of the reasons the club couldn’t give Lionel Messi a new contract. Messi eventually signed for Paris Saint-Germain. Reverter said the club will bet on the youngsters from Barcelona’s famed “La Masia” academy for its future success.
Barcelona’s salary cap had to be slashed to 97 million euros ($113 million), about 285 million euros ($334 million) less than a year ago and more than seven times smaller than that of Real Madrid. (AP)
