FootBiz newsletter #70: Barcelona's financial games catch up with them

“This isn’t a coincidence” said FC Barcelona president Joan Laporta at a press conference on Wednesday morning, as his own actions became acquainted with their consequences.

Spanish football’s big two are both so convinced that they are victimised by the powers-that-be in Spain that it actually gives you much more confidence in things all being above board, fair and equal.

Real Madrid made a formal complaint over refereeing mistakes they deem to be a conspiracy, and now Barca have promised, via Laporta, that their “response to La Liga and Tebas will be strong.”

“As president, I simply cannot allow this”.

Oh, Joan. If only you had said the same about the endless selling off of the club’s future revenues to make a quick buck. That is where this all actually began.

We have covered Barca’s descent into financial lunacy a fair amount so most readers will probably be familiar, and Rob wrote a piece for premium subscribers on Laporta himself, but Wednesday morning’s news which prompted such a strong reaction from the Barcelona president came in the form of a La Liga press release with some bad news.

In short: the last-gasp levers Barca pulled to fulfil financial rules in January, thus allowing them to register €60m signing Dani Olmo and striker Pau Victor, were not legitimately reported despite being signed off by an auditor.

More than that, La Liga says Barcelona are now not meeting financial fair play rules and they have reported to Spanish fiscal authorities the auditor that the club employed for four days in order to rubber stamp that deal back in January.

The auditor in question was appointed by Barcelona on December 31 and provided a certificate to the league which said that the €100m sale of VIP boxes to Middle Eastern investors was correctly accounted for as income in the club’s profit and loss statement for the 2024-25 season.

However, La Liga states that the “Financial Statements ultimately do not include the corporate transaction in the Profit and Loss Statement, contrary to what had been certified earlier by the Club and its auditor at the time of the transaction.”

"Barcelona did not have on December 31, 2024, or on January 3, 2025, nor has it had since that date, nor does it currently have, [the financial fair play capacity] for the registration of the players Dani Olmo and Pau Victor," La Liga said.

La Liga also confirmed that Barca had “reported three auditors in the last three months” - which isn’t the healthiest sign.

But what are the repercussions?

Well, for a start Barcelona won’t be able to sign anyone this summer until they’ve untangled this mess (so I wouldn’t believe any transfer reports involving them unless they’re sales).

On the player front, Dani Olmo and Pau Victor notionally should not have been permitted to be registered, but they were, and the Spanish court responsible for sporting matters previously ruled in their favour on the basis that de-registering the pair would deny them the opportunity to work. That seems likely to hold, though that same court was due to rule on their eligibility next week anyway so we should have news soon.

And the reason Joan Laporta was so angry on Wednesday morning? Well, on Wednesday night Barca played Atletico Madrid in the second leg of the Copa del Rey semi-final. A game they won 1-0 to advance to clásico final.

The lever-pulling president labelled it “yet another attempt to destabilize our team.”

“Sometimes I have the feeling that what they can’t beat us on the pitch, they try to beat us in the offices, and as president of Barça, I can’t allow this. I will continue to defend the interests of our club, in defense of our members, fans, and supporters.

“The club will respond once the legal department has thoroughly analyzed LaLiga’s letter. We will respond in the most forceful manner necessary to defend the interests of FC Barcelona.”

Maybe it’s just me, but if you break the rules then you don’t get to decide when that news emerges.

Table of Contents

• PL clubs punt on ‘Chelsea rule’

• Semi-automatic offsides arrive next week

• Burn after Reading

• Leicester financials

• Kennedy on list to chair regulator

• Fun fact

• Arteta promises ‘big summer’

• CONMEBOL chief accused

PL clubs punt on ‘Chelsea rule’

The Premier League will not revisit the controversial subject of related-company asset sales at their AGM this summer, despite grumblings from some clubs after Chelsea avoided a profit and sustainability rules (PSR) breach for a second successive year by transferring the ownership of their women’s team to parent company BlueCo.

A year after BlueCo took ownership of two hotels at Stamford Bridge at a cost of £76.5m, Chelsea’s 2023/24 accounts published this week revealed that the “disposal of subsidiaries” - believed to include the women’s team and their Kingsmeadow Stadium – had raised £198.7m. As a result they posted a pre-tax profit of £128.4m and they have no PSR issues.

The Premier League proposed to that such property sales be exempt from PSR calculations last summer – the EFL effectively banned them five years ago after the owners of Aston Villa, Derby and Sheffield Wednesday avoided breaches by selling their grounds to related companies – but the motion only received 11 of the 14 votes required to be passed. Despite having majority support there is no appetite to revisit the issue, particularly as several other clubs including Villa, Newcastle and Manchester United face battles to comply with PSR in the next few years.

Semi-automatic offsides arrive next week

The Premier League will introduce semi-automatic offside technology (SAOT) next weekend as it looks to reduce in-game VAR delays and provide more accurate decisions.

SAOT was designed in collaboration with the refereeing body, PGMOL, and the Premier League and will automate key elements of the offside decision-making process to aid those in the VAR booth, providing more accurate and efficient placement of the virtual offside plane thanks to optical player tracking. The hope is that it could shave an average of 30 seconds off every offside check.

By quickly generating virtual graphics to demonstrate the decision, the league also hopes it will improve the in-stadium experience for fans, which has been one of VAR’s great failures.

Burn after Reading

We hope and pray that by the next time we publish FootBiz, Reading FC will have new owners.

The deadline is supposed to be Saturday, though it’s still pretty unclear what would happen if that deadline wasn’t met. Technically the EFL could suspend or even expel the Royals from the league entirely but given the role they played in this debacle (fit and proper, anyone?) the more realistic expectation is that the club just needs to change hands before the end of the season. If they are seen to be too soft on Reading, however, then the teams rivalling Reading’s surprise promotion charge under Noel Hunt will have cause for complaint.

Robert Platek is in exclusivity to buy the club from Dai Yongge but Rob Couhig, the former Wycombe Wanderers owner who came very close to buying the club himself, still has liens against Reading’s property assets - including the stadium.

Couhig still wishes to buy the club and is suing Reading for loss of opportunity after Dai withdrew from a sale agreement last year, but appears to have missed his chance.

Until he lifts his securities over the stadium and training ground, however, it appears difficult for Platek to conclude his own deal.

Either way, a quick resolution is needed.

Read more: A long thread on Dai Yongge’s financial difficulties 

Leicester financials

Leicester yesterday became the final Premier League club to publish their 2023/24 accounts yesterday, which showed losses of £19.4m. Although it was the sixth successive year in which the club been in the red, Leicester’s losses in the Championship last year were far smaller than those in their previous two seasons in the Premier League, which were £92.5m and £89.7m respectively.

The improvement is largely down to a £71.8m profit on player trading as result of selling Harvey Barnes to Newcastle, Timothy Castagne to Fulham and Kiernan Dewsbury-Hall to Chelsea, while in the Championship the club’s wage-bill was almost halved to £107.2m. With income also vastly down however, the wage-to-turnover ratio was unhealthily high at 101.6 per cent, albeit down from 116 per cent the year before.

Leicester’s player sales enabled them to avoid a PSR breach, but they still have historic issues to resolve. The Premier League are appealing the decision of the independent panel that ruled they could not charge Leicester for breaches during the 2022/23 season as they had been relegated to the Championship by the time their accounts were filed, while the EFL could still charge them for overspending during that campaign if (when) they go down this season.

Leeds recorded a far bigger loss at £60.8m - almost double that of the previous year when they were in the Premier League – but their underlying position appears healthier than Leicester’s, not least as they have a good chance of replacing them in the top-flight. Daniel Farke’s side are currently second in the Championship on goal difference from Burnley, in what is a three-way fight for automatic promotion narrowly led by Sheffield United.

Although large by Championship standards – and higher than that of six Premier League clubs last season – Leeds' wage bill of £84m was £23m lower the Leicester’s and only slightly more than that of Southampton, who beat them in the Championship play-off final last May. While Leeds’ revenue dropped by 33 per cent to £127.6m in the Championship this fall was far less than that experienced by other relegated clubs, with high demand for tickets at Elland Road and new commercial deals leaving them in a comfortable position if they are able to secure a return to the Premier League.

Kennedy on list to chair regulator

Professor Sir Ian Kennedy, the first chair of the UK’s parliamentary watchdog established after the MPs expenses scandal, has been approached about becoming the Chair of the Independent Football Regulator, as first reported by Mark Kleinman of Sky News.

The 83-year-old, who chaired the Independent Parliamentary Standards Authority (IPSA) between 2009 and 2016 following a distinguished academic career, joins former Aston Villa and Liverpool chief executive Christian Purslow and Sanjay Bhandari, Chair of anti-racism charity Kick It Out, on an eclectic shortlist.

Sir Ian is emeritus professor of health law, ethics and policy at University College London, and possesses very different credentials to those of his rivals. While he has never worked in football he is an experienced regulator and has sat on numerous government and extra-governmental committees, including the General Medical Council, the Medicines Commission and the UK Research Integrity Office.

The Chair of the regulator will be paid around £130,000-a-year for a three-day week, with their first key task being to lead the recruitment of a chief executive. Despite strong opposition from the Premier League, the Football Governance Bill passed its third reading in the House of Lord’s last month and will return to the Commons after Easter.

Fun fact

From Simon Austin of Training Ground Guru

Jose Mourinho with Rui Faria: 23 major trophies in 17 seasons, including 2 Champions Leagues & league titles in 4 countries

Jose Mourinho without Rui Faria: 1 trophy in 6 seasons (Europa Conference League)

Every Batman needs a Robin.

Arteta promises ‘big summer’

Mikel Arteta knew what he was doing when he promised a “big summer” for Arsenal.

The Spanish coach was speaking in the wake of Andrea Berta being formally announced as the new sporting director, with Berta expected to rubber stamp a pre-agreed deal to sign Real Sociedad midfielder Martin Zubimendi this summer.

What Arteta is referring to, however, is the club’s ongoing search for a striker which must - surely? - bear fruit this summer.

Arsenal believe themselves to be on the cusp of regaining the Premier League title for the first time since 2003/04, but their need for a centre-forward has been clear and they made a late attempt to sign Aston Villa’s Ollie Watkins in January.

Sporting CP’s Viktor Gyokeres and Benjamin Sesko are widely reported as Arsenal’s top targets for the role but keep an eye on Nico Williams, while Arteta promising a “big summer” makes public his desire for the club (and Berta) to get him the 9 he so craves.

Otherwise, Arteta feels Berta can have a widely felt impact on the club and that a new face could provide the spark Arsenal need to get over the line and win the title.

“What I’m very confident about is how he’s going to make everybody better.

“The way he is, the personality he has, how passionate he has and what he does – that’s what we need. We need new blood with people that are so ambitious that they are so attached to the football club and what we already do but want to add value.”

CONMEBOL chief accused

Alejandro Dominguez, the president of the South American confederation CONMEBOL, has been accused of corruption by politicians in his native Paraguay, a country that has struggled with corruption for decades.

"You're not going to beat me because the judges are going to say what I want” is one of the direct quotes read aloud in the Paraguayan senate amid allegations that were described by senator Celeste Boccia as “pure, hard extortion”.

Dominguez succeeded his close friend Juan Angel Napout as the head of South American football in 2016 after Napout was arrested as part of the FIFAgate scandal. Napout, also Paraguayan, was eventually found guilty on three counts of racketeering and wire fraud conspiracy and sentenced to nine years in prison.

The predecessor to both, Nicolas Leoz, was one of the kings of FIFA corruption. Lord Triesman gave evidence to a parliamentary inquiry into football governance that stated Leoz had asked for a knighthood from the queen in return for a vote for England to host the 2018 World Cup, even after Leoz had been exposed for taking bribes over television contracts.

Interpol put out a red notice for the arrest of Leoz in 2015 as part of the FIFAgate scandal but the Paraguayan insisted he was too sick to leave his home country and instead saw out his days in a luxury suite at a hospital he owned.

US authorities fought for extradition but Leoz died in 2018 while his case was delayed in passing through the Paraguayan supreme court.