Barcelona "Austerity Policy" as Financial Crisis Hits Nou Camp

(WFI) Spanish champions Barcelona are seeking a €150 million ($189m) loan to help ease a serious cashflow problem and help pay player and staff wages as doubts emerge about the club’s finances.

The situation is so grave that new club president Sandro Rosell - who only assumed his position last week - used an interview on the club’s website to promise an “austerity policy”, but said that he hopes to resolve the situation in the next few days.

“We found the club in debt and with cashflow tensions but we’re sorting that out,” Rosell said.

“The club isn’t bankrupt. This week we’ll have everything in place to impose a policy of austerity to be able to make savings in unnecessary areas and meet very important commitments such as paying the wages of our players, coaches and employees.

“We have to improve our cash flow to meet our short-term commitments. In the next few days, our vice-president for economic affairs will close a deal for a syndicated credit of €150 million.”

Rosell admitted that the €15million sale of Dmitro Chygrynskiy to Shakhtar Donetsk had been completed in part to help alleviate Barcelona’s financial predicament.

Barcelona’s need for extra financing comes as serious concerns have emerged over its broadcast partner, Mediapro, and its ability to fulfil a seven-year €1billion contract with the club, which runs until 2013.

In June Mediapro announced it was applying for bankruptcy protection after becoming embroiled in a dispute with a pay-tv station. Rosell said that after speaking to the company he had received assurances that Barcelona would receive payment. Worryingly for the Catalan giants, Rosell pointed out that unlike TV deals with other clubs, Barcelona only had a verbal agreement for payment.

Other factors, including Rosell’s refusal to raise the club’s membership subscription – a tenet of his electoral campaign – and Spain’s severe economic recession have been cited as compounding Barcelona’s financial situation.

When campaigning for the Barcelona presidency, Rosell warned of the club’s “stratospheric” debt cloud and urged for greater prudency.

According to Rosell the club possessed debts of €500million, without taking into account last summer’s acquisitions of Chygrynskiy and Zlatan Ibrahimovich, who cost around €80million.

“We must improve the squad each year, but we must also make sure that we are managing the economic resources that the club needs to survive,” he said in May.

At the same time the club were able to complete the €40million signing of David Villa from Valencia in May, and are hot on the trail of Arsenal’s wantaway captain Cesc Fabregas, who is valued at a similar price.

Last week, Barcelona claimed to be the world’s biggest football team in terms of turnover, with sales for the year to June 30 up 16 per cent to €445.5m.

By INSIDER’s James Corbett.

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