Barça’s latest defeat has led the coach to announce his deferred resignation and has generated another existential crisis regarding the possibilities of the club’s resurrection. This crisis involves both the sporting and economic aspects and both are obviously very related. What is Barça’s problem? As an external observer in the world of football, it is necessary to highlight the debt, a legacy of poor management and poor governance. Wanting the club to be competitive while dragging a large debt and unprofessional management seems like an impossible mission.
Maintaining the fiction that the club is run by the members has allowed the governance of the institution to fall short of the circumstances. Entities with poor corporate governance, whether for-profit or not, suffer from two fundamental problems, well known among organizational experts. The first is a poor selection of personnel at all levels that ends in poor performance at excessive cost, improvisation, and repeated changes of managers. Let’s think about the inflated salaries, player transfers at a loss and the ineffective recruitment of the club in the period 2017-2021. Also in the frequent changes of coach, where emotional factors often seem to weigh more than those of strictly professional quality. Institutions that tend to always look for “insiders” tend to mediocrity. It’s a well-known problem in family businesses. In this context, the attraction of staff can suffer from the phenomenon of adverse selection, where the organization does not attract exactly the best professionals.
The second problem is that adequate incentives are not provided for managers and workers to exert the effort necessary for the company to succeed. These incentives can be both material and moral. You only need to compare the salaries of the successful and exemplary women’s team with the men’s team to understand that the problem of the latter is not precisely that the salaries are meager.
How can corporate governance be reformed, management improved and debt reduced or eliminated?
The crisis can derail the bet on the resurrection made with the famous levers, which are nothing more than the sale of the club’s assets, which would generate income in the future, to get income now and get out of the way, while hoping to produce a circle economic and sports virtuoso. The debt is heavy and the exit of conversion into a public limited company to attract capital may come to be put on the table sooner or later. I don’t think it is the preferred option for the fans, or for Catalan society in general, for Barça to end up in the hands of, let’s say, the capital of the Middle East like some European clubs. However, the injection of external capital to wipe out the debt can also come from a partial IPO, keeping, for example, the Barça Foundation, which would represent the members, a controlling stake, as is the case with Bayern Munich. It is the proposal of Jaume Roures in this same newspaper last January.
The advantage of this scheme is that the management of the club would necessarily have to be professionalised, given that it would be subject to the discipline and transparency regulations of the capital market. In this corporate governance scheme, the crucial point would be the structure and representativeness of the foundation, which would exercise effective control over the club. A delicate and not minor issue.
