Barcelona is reportedly facing new sanctions after breaching UEFA financial regulations for a second time.
The Spanish football giant, already fined for misreporting income, now faces harsher punishments that could impact their ability to compete in the Champions League.
This situation comes from how Barcelona tried to raise money by selling off future TV rights, which UEFA doesn’t count as regular income.
Potential penalties like fewer players allowed in the Champions League or losing points could make it very hard for Barcelona to succeed in Europe this season.
UEFA’s Financial Fair Play (FFP) rules, now rebranded as Financial Sustainability Regulations (FSR), are designed to ensure European clubs operate responsibly and avoid excessive debt.
These regulations limit how much clubs can spend beyond their earnings, with a maximum allowable loss of €60 million over three years, provided certain financial health criteria are met.
Crucially, the rules have become even stricter, with clubs now limited to spending 85% of their revenue on wages, transfers, and agent fees, a figure set to drop to 70% by 2025.
This progressive tightening means any infractions, especially repeat ones, are met with increasing severity.
Barcelona’s current predicament stems from how they accounted for the sale of future TV rights, which UEFA deemed as the sale of “intangible assets” rather than regular operating income, thus falling outside the permissible FFP calculations.
Barcelona’s history of financial challenges isn’t new. The club has grappled with substantial debt for years, at one point exceeding €1 billion, leading to significant player sales like Neymar in 2017.
To generate immediate funds, Barcelona employed “financial levers,” including selling portions of their domestic TV rights for 25 years.
In 2022, they sold 10% for €267 million and later another 15% for around €400 million.
While the club classified these as “operating income” to boost their financial reports, UEFA disagreed, ruling them as “profits on disposal of intangible assets,” which don’t count towards FFP.
This disagreement led to their initial €500,000 fine, a decision upheld by the Court of Arbitration for Sport (CAS) in October 2023.
The CAS ruling also ominously warned of “harsher disciplinary measures” for any future breaches, setting the stage for the current investigation into their 2023 financials.
This continuous reliance on such “levers” to manage immediate financial needs while potentially skirting FFP rules puts the club in a precarious position.