Barcelona demand delay on ‘impending debts’ amid threat of bankruptcy
Barcelona have turned to banks and lenders in an attempt at leniency as they grapple with the threat of possible bankruptcy after non-payment to their creditors.
Barca are in dire financial straits and debt has spiraled out of control amid dramatic income cuts due to the coronavirus pandemic, accelerating and exacerbating existing problems that may have developed and worsened over the past five years .
According to a report by Spanish newspaper El Confidencial, Barcelona have turned to figures like Goldman Sachs, Allianz and Prudential to ask for flexibility following a non-payment of 200 million euros, apparently breaking the terms of their financial arrangements. .
The club are said to have negative working capital of just over € 600m and have asked their creditors to extend what is described as “impending debts” of € 300m for a year to avoid payment default.
Between June 2019 and June 2020, it is estimated that Barca’s debt more than doubled, while a recent estimate in Spain had already put the number at 900 million euros.
Barcelona’s income has been wiped out by the pandemic. With the Camp Nou closed to fans on match days, ticket sales and other associated income have dried up, while the stadium is also generally a tourism outlet, with people visiting the tour, museum and shops in mass.
But that’s not the only problem. Barca’s spending has been seen as reckless and lacking in long-term planning for a number of years. Lionel Messi was refused a loyalty payment of 39 million euros in 2017 which was finally handed to him last year, while Philippe Coutinho, Antoine Griezmann and Ousmane Dembele were all handed big contracts to their arrived for more than 100 million euros each.
In November, presidential candidate Victor Font described the club’s finances as being in “critical” condition, to the point that there was no cash available to outfit coach Ronald Koeman with the main goals of transfer Eric Garcia or Memphis Depay into the summer window, neither. of which would have commanded a huge fee.
The presidential election originally scheduled for this weekend has been postponed to March due to coronavirus fears, only further delaying the current uncertainty.
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