Barcelona are selling 10 per cent of their TV rights for £178m
Barcelona agree a £178m deal with investment group Sixth Street Partners to sell 10% of their TV rights for the next 25 years… but the sale does NOT mean Xavi can inject the money into the transfer market
- Barcelona have sold 10 percent of their TV rights over the next 25 years
- San Francisco-based Sixth Street Partners paid £177.5million for those rights
- Sixth Street Partners already works closely with Barcelona’s rivals Real Madrid
- The deal doesn’t mean Barcelona can now spend a lot in the transfer market
Barcelona have announced they will sell 10 per cent of their TV rights over the next 25 years to American investment firm Sixth Street Partners – but they still need to sell more of the club if they want to be free in the transfer market.
The €207m (£177.5m) deal means the club can end the financial year loss-free, but it doesn’t automatically mean they will sign Andreas Christensen and Franck Kessie to LaLiga or move forward with their bid to sign Robert Lewandowski can.
The deal Barcelona rejected last season between CVC and LaLiga to cede just under 10 per cent of the TV rights over 50 years included the release of 15 per cent of the €270m (£231.4m) paid outright should be used for squad expenses .
But deals with other partners don’t have the same guarantee and they now have to negotiate with LaLiga what percentage of that deal can be used in the same way.
Barcelona president Joan Laporta has sold 10 percent of the club’s TV rights for 25 years
San Francisco-based Sixth Street Partners are already working with Real Madrid after signing a deal to commercialize the club’s refurbished Santiago Bernabeu stadium.
Barcelona members voted to sell part of the retail arm Barcelona Licensing and Merchandising (BLM) and a portion of its future TV rights revenue, last week.
At the time, club president Joan Laporta said the deals could fetch up to €700m (£600m).
The deal is huge for Barcelona as June 30 is the last day of the financial year for the clubs
This does not mean that they can register new players, such as new Andreas Christensen
HOW DOES THE LALIGA SALARY CAP WORK?
LaLiga introduced a salary cap back in 2013 to gain more control over how member clubs are kept out of large debts and paybacks.
The salary limit for each team – it is determined individually for each season – is calculated from the squad costs (fees, salaries, bonuses, pension contributions) from the total income achieved.
This income is calculated from TV rights, sponsorships, LaLiga revenues, club membership fees, advertising and player sales.
But so far progress in closing the deals has been slow and this first sale is seen by LaLiga as the club moving in the right direction but still falling well short of the amount of money Barcelona need to invest to attract new players to win .
Barcelona still have time to sell more parts of the TV rights and the BLM package. If the club can strike deals for €700m (£600m), it will take LaLiga’s imposed salary cap of €144m (£123.4m) down last season to slightly closer to €550m (£471m). .2 million pounds sterling) lift ) positive.
That would still be above their current payroll of €560m (£480m) but then with a slight reduction in the payroll they would finally be free of the 4:1 rule which obliges them to spend just a quarter of their earnings.
Barcelona weren’t the only club in Spain threatened by the prospect of ending the financial year in losses.
Atletico Madrid have admitted they have to sell a player for €40m before July 1 to end the year without losses.
The admission about the state of the club’s finances came from President Enrique Cerezo.
“You know that like all clubs, we have certain financial obligations,” he said.
Barcelona manager Xavi Hernandez is keen to make several signings to strengthen his squad
“We will be able to sign what we can sign. I think in order to sign we all have to sell.
“We have to sell for 40 million euros; This is the position we are in. The market is not easy.”
Despite this public admission, they are not expected to release players from the team today.
Valencia are understood to be €70m (£60m) away from completing the year without a loss and Sevilla, who sold defender Diego Carlos to Aston Villa earlier this month, are expected to lose around €30m (£25.8m) to announce.
The record of losses reduces the spending limits set by LaLiga, although none of the above clubs expect to be given a spending limit in the red like Barcelona were last January.