This illustrates exactly what many of us having been shouting about for years now: the inherent and horrific deficiency of the current iteration of FFP that the cartel clubs forced upon European football as a short-sighted, histrionic, self-defeating, catastrophic protectionist response to higher competition.
Any regulations that were genuinely intended to safe guard the financial sustainability of football clubs and the overall stability of the sport (football markets) would neither allow this sort of ridiculous financing, nor eventually force clubs in to having to seek it due to cash flow issues stemming from allowing earlier highly leveraged purchases, high-proportion operations financing, and/or risky stock/bond issuances. Debt is *relatively* cheaper than it has ever been, but the clubs must still service these debts and, as United has shown, there are cascading costs to these methods of financing operations.
Barca supportors will say this is solely for the club’s stadium redevelopment, but that is only a cover for shifting cash to allow for continued operations as they bleed elsewhere. The have some fairly serious and deeply seeded management issues, including financial problems. Although Barca may *just* be able to ultimately manage this loan (though, it still carries more risk than most think), this only emboldens other clubs to attempt to “solve” their financing issues with cheep debt now.
Focusing solely on P&L, and discouraging owner equity investment, has created a situation where small and big clubs struggle to weather periods of greater market volatility and take bigger risks, with severe longer term consequences, than they otherwise would.
Translation of the tweet:
Laporta confirms that Barça is processing a loan for 800 million euros with the private investment bank Goldman Sachs. “I don't know if they have already signed for it or if they have already made a pre-agreement. It will be repaid in 20 years. They have to explain, "he said.
