Barcelona's debt problems part 2

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Post by Babun Thu Sep 15, 2011 9:22 pm

FC Barcelona need to reduce debt and 'generate more income'
Cesc Fabregas

Crunch Sports Staff - 15 Sep 2011
Barcelona's economic vice-president, Javier Faus, has revealed that the club are still in a tight financial situation following the signings of Cesc Fabregas and Alexis Sanchez this summer.

The Spanish and European champions spent over £50million to lure Fabregas and Sanchez to Camp Nou over the summer, and although they have reduced their debt, Faus has admitted that the Catalans "need to generate more income."

Barca are around £317m in debt, although the figure is down from around £375m twelve months ago.

And speaking via the club's official website, Faus said: "We followed an austere line, as we’re committed to growth, and we’ve reduced the debt, but we are still in a delicate situation.

"The debt is still too high for us to be able to dictate our future.

"It’s not the debt that we want, and we have to reduce it further to sustainable levels with regard to the cash flow generated by the club.

"We’ll continue to work on it. We can’t afford to owe so much money to the bank, and we need to generate more income."
Source
Last year, they made losses after winning the CL :lol!: They reduced their total debt but it is still ins't sustainable. The question, why go out of their way and splash so much cash on Fab and Sanchez? eco smile
1-2 good CBs would've covered all their needs for this year... eco smile
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Post by Great Leader Sprucenuce Thu Sep 15, 2011 9:25 pm

Sanchez was needed Babun, 4 forwards for 3 positions is pathetic lol.....

I agree a CB should have been signed instead of Cesc though.
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Post by Harmonica Thu Sep 15, 2011 9:27 pm

What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?
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Post by Babun Thu Sep 15, 2011 9:32 pm

jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?
Did you read the report? Very Happy Javier Faus says that Farca needs to generate more income because their financial situation isn't the best. He isn't someone from outside,he is Barcelona's economic vice-president Very Happy He knows more about Farca accounts and loans than you'll ever do eco smile


Last edited by babun1024 on Thu Sep 15, 2011 9:35 pm; edited 1 time in total
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Post by Guest Thu Sep 15, 2011 9:33 pm

jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?

Problem is that debt wasn't reduced with retained earnings. It was reduced by non-profit driven balance sheet transactions. That is unsustainable unless there's a huge amount of untapped goodwill value that Barca is counting on monetizing.

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Post by Harmonica Thu Sep 15, 2011 9:42 pm

sportsczy wrote:
jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?

Problem is that debt wasn't reduced with retained earnings. It was reduced by non-profit driven balance sheet transactions. That is unsustainable unless there's a huge amount of untapped goodwill value that Barca is counting on monetizing.
Which are?
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Post by Yuri Yukuv Thu Sep 15, 2011 9:43 pm

sportsczy wrote:
jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?

Problem is that debt wasn't reduced with retained earnings. It was reduced by non-profit driven balance sheet transactions. That is unsustainable unless there's a huge amount of untapped goodwill value that Barca is counting on monetizing.

Have you ever heard of a small place called qatar? Barca is set
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Post by Shamirr Thu Sep 15, 2011 9:46 pm

Seriously this is getting unhealthy... Barca are irrelevant for the most part, talk about them when we play them, the rest of the time they don't matter as far as I'm concerned...
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Post by Guest Thu Sep 15, 2011 9:58 pm

Yuri Yukuv wrote:
sportsczy wrote:
jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?

Problem is that debt wasn't reduced with retained earnings. It was reduced by non-profit driven balance sheet transactions. That is unsustainable unless there's a huge amount of untapped goodwill value that Barca is counting on monetizing.

Have you ever heard of a small place called qatar? Barca is set

That's already factored into their financials unfortunately. They would need new sponsorships and revenue.

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Post by Guest Thu Sep 15, 2011 10:14 pm

jiopsi wrote:
sportsczy wrote:
jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?

Problem is that debt wasn't reduced with retained earnings. It was reduced by non-profit driven balance sheet transactions. That is unsustainable unless there's a huge amount of untapped goodwill value that Barca is counting on monetizing.
Which are?

Actually it can go through retained earning. But it's non-recurring. What i meant is that you create a gain from an undervalued asset. For example, real estate is booked at the acquisition cost, not what its worth in the current market. If you sell the real estate, you realize non-operating gains. These types of things are not included in operating profits, but in a separate P&L line below the operating profit line (one-off transactions). The bottom line is that it's not shown as an operating profit because it's non-recurring.

You could also get capital via equity by selling shares. But i don't that happened at Barca.

When you have an operating loss and you reduced debt, you either had extra cash hanging around that you used or had an event as i described above.

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Post by julias Thu Sep 15, 2011 10:36 pm

sportsczy wrote:
jiopsi wrote:
sportsczy wrote:
jiopsi wrote:What's the problem, with the way things are going, they can reduze debt to 0 in six years, and still use 45mil for players annually?

Problem is that debt wasn't reduced with retained earnings. It was reduced by non-profit driven balance sheet transactions. That is unsustainable unless there's a huge amount of untapped goodwill value that Barca is counting on monetizing.
Which are?

Actually it can go through retained earning. But it's non-recurring. What i meant is that you create a gain from an undervalued asset. For example, real estate is booked at the acquisition cost, not what its worth in the current market. If you sell the real estate, you realize non-operating gains. These types of things are not included in operating profits, but in a separate P&L line below the operating profit line (one-off transactions). The bottom line is that it's not shown as an operating profit because it's non-recurring.

You could also get capital via equity by selling shares. But i don't that happened at Barca.

When you have an operating loss and you reduced debt, you either had extra cash hanging around that you used or had an event as i described above.

i like this post, clearly been studying accounting lol
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Post by H.A. Thu Sep 15, 2011 11:21 pm

Barca should jump on getting as much sponsors now rather than wait so they can at least guarantee highest income possible. They won't be the best team infinitely. Even with such a small squad there players do have very high salaries with longterm contracts. It really isn't sustainable.
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