It seems there are two ways to look at news that talks between Barcelona‘s temporary board and the club’s star players to reduce the wage bill ended in stalemate on Wednesday.
It was either dire news as the club slides towards the financial precipice or good news because there is a willingness on both sides to reach an agreement.
Sportsmail asks which is it? And what happens next at the Camp Nou?
Barcelona have reached a stalemate in their bid to secure pay-cuts with first team players
So, was it good or bad news?
Well, it wasn’t catastrophic but it’s hard to dress it up as good news really. Talks had already been extended beyond the first deadline.
The statement from the board on Wednesday night did say: ‘The negotiating process has revealed the sincere and firm desire for both sides to understand each other including the formula for the recovery of wages that must be postponed, and many of the difficulties that seemed insurmountable days ago have been overcome.’
But that just seemed to be saying: ‘Hey, things could be worse!
And the key phrase there is ‘recovery of wages that must be postponed’.
Exactly, more than wage cuts, what the club have to impose is a delay in payments. They are telling players: you will get the money you are contracted to receive but over a longer period of time.
The club appeared to play down the severity of the situation but will have to delay payments
Hence those recent new contracts?
Exactly. Gerard Pique, Clement Lenglet, Frenkie de Jong and Marc-Andre ter Stegen have all agreed contract extensions for that very reason.
So what happens now?
A new deadline has been set for November 23.
And if there is no agreement is it just more talks?
No. There will be no more talks. If players don’t agree to proposals they will almost definitely be unilaterally imposed. The statement on Wednesday night from the temporary board pretty much made that clear.
‘It is up to the board to adopt decisions to solve the serious financial problem derived from the Covid-19 pandemic,’ it said.
In other words: it is our responsibility to implement these measures. Legal challenges could follow but the club hope to avoid that.
Lionel Messi is Barcelona’s highest paid player with the forward earning around £500k a week
Ronald Koeman’s players will not have further talks and proposals could be imposed instead
Will the players agree to the measures then?
Well the board, in that statement, also spelled out the situation. It said the pandemic had: ’caused a reduction in the club’s income of more than 300 million euros for the 2020/21 season, and that forces a salary adjustment of 191 million euros.’
The club is obliged to keep its wage bill below 70 percent of income and that is impossible as revenue tumbles.
Will wage cuts be enough?
No and it’s not the only avenue being explored. The club are planning to raise another 200 million euros by selling a 50 per cent share stake in ‘Barça Corporate’ which is a package that includes Barça Innovation Hub, Barça Studios, Barça Academies, and Barça Licensing & Merchandising, which controls the club shops.
Spanish radio Cadena Ser have reported that if successful, 100m euros of money raised would go immediately into the accounts for this season. Together with the wage bill reductions that would create an extra 290m euros, to help cover the shortfall in revenue because of the closed stadiums.
Barcelona are hoping to avoid any legal challenges from players as it looks to secure its future
Barcelona are planning to raise another €200m by selling a 50% stake in ‘Barca Corporate’, which owns its merchandising division and club shops
The club have lost out on around €300m in income and are seeking to slash €190 off the books
Could the club not just take out a loan?
The previous board agreed a loan from Goldman Sachs worth 725m euros plus 90m euros in interest. The deal still has to be passed by referendum or in a general assembly. The credit was taken out to help pay for the stadium renovation set to cost around 800m euros.
Again, according to Cadena Ser, 90m euros of the loan has already been used as a bridge loan and if the total 815m credit is not ultimately agreed by the members then that 90m would need to be paid back as if it were a conventional loan.
Could the club abandon the stadium renovation and the accompanying Espai Barça project?
Abandon no. Time will tell if it’s necessary to scale down the project. Barcelona are still banking on supporters being gradually allowed back into the stadium before the end of this season which would ease the current crisis hugely.
Plans to renovate the Nou Camp won’t be abandoned but the project could be scaled down
Uncertainty comes with presidential elections looming after resignation of Josep Bartomeu
And all this against a backdrop of elections?
Yes and part of the reason why no agreement has been reached between players and the temporary board is the former’s request that they deal, not with the caretaker president, but the new one.
Seems like a reasonable ask…
The argument is that such things can’t wait and need to be done now. But yes the sooner elections can happen the better. The temporary board are discussing option now with January 17 a real possibility.