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The Covid-19 pandemic blocked off a lot of revenue streams for football clubs and they have struggled as a direct consequence of it. There has been a serious revenue drop over the past couple of years and top European clubs have felt the effects.
Clubs are starting to get extra cautious about their spending in the transfer window and for good reason. But the fact of the matter is that some of the top European clubs were being poorly run prior to the pandemic itself.
Hence, it is safe to say that the pandemic did not create their financial troubles, it only aggravated them. The astronomical values that have been slapped on players are slowly starting to come down as teams look to offload high-earners to balance their books.
Without further ado, let's take a look at five of the biggest European clubs which are in financial trouble right now.
#5 Real Madrid
In their 2020 annual meeting, Real Madrid revealed that they had aggregated a debt of €901 million. The redevelopment of Santiago Bernabeu has been a major contributing factor to Real Madrid's financial issues.
But things are not as concerning for Real Madrid presently as their short-term debt is reportedly in the ballpark of €200 million. It has also been reported that Los Blancos had requested their players to take a paycut in the wake of the pandemic.
They were cautious in the 2020 summer transfer window and sold players like James Rodriguez, Achraf Hakimi, Sergio Reguilon and Oscar Rodriguez. They also sent Gareth Bale and Borja Mayoral on loan.
Real Madrid are hoping to sign Kylian Mbappe this summer. They have also bid farewell to Sergio Ramos as they were not in a place to hand him a new lucrative contract. They are also likely to sell Raphael Varane in the summer with Manchester United being heavily linked with the French centre-back.
However, Real Madrid have just revealed that they closed the 2020-21 financial year with a profit €874,000 after taxes. As such, they seem to be rather sorted for the short-term and have managed the effects of the Covid-19 pandemic rather well.
#4 Tottenham Hotspur
Tottenham Hotspur recently rebuilt their stadium, but the Covid-19 pandemic has pushed them down a slope. Games being played behind closed doors has effectively led to a deficiency in matchday revenue. As per various reports, Tottenham Hotspur have incurred a debt of £589 million.
They are one of the clubs that have been hit the hardest by the Covid-19 pandemic in Europe. Spurs have also failed to qualify for the UEFA Champions League. They have also not won silverware for a long time and there is a severe shortage of returns on investments.
But Spurs are reportedly close to striking a deal for the stadium naming rights. This will provide a much-needed financial boost for the club.
#3 Juventus
Juventus are yet another side that has spent a bit recklessly in recent times. Their big-money acquisition of Cristiano Ronaldo prior to the Covid-19 pandemic has put them in a pickle. Juventus reportedly have around €335 million in debt.
Their poor performance in the 2020-21 season under the tutelage of Andrea Pirlo did not help their cause. This, coupled with a decline in broadcast revenue and a severe drop in matchday income from the stadiums, has severely hit the Bianconeri.
But Andrea Agnelli recently revealed that the owners are pumping money into the club and that is helping the club negotiate the summer without many difficulties. Towards the end of June, he said (via BlackWhiteReadAllOver)
“The Board of Directors has examined the impacts of COVID in recent seasons that are around €320m and has prepared guidelines for the increase of share capital up to €400m.
“Those of the pandemic are effects that have affected all companies. Then there are capital increases such as Roma, Atletico Madrid and we are here too. We fit into this context, it’s important that the shareholders support the growth of this club. The ownership is one of the strengths of this club, I say this as President and a member of the family.”
But the club are not going to splash the cash this summer transfer window for obvious reasons.
#2 Inter Milan
Despite winning the Serie A in the 2020-21 season, Inter Milan find themselves in a whole lot of trouble. Antonio Conte has left his role as the club's manager after the club told him they'll need to let go of some top players this summer.
Inter Milan vice-president and former captain Javier Zanetti revealed that the club is in serious financial trouble. In May, he said:
"The financial problems remain and it could take a couple of years to rediscover that balance. We need people back in the stadium to make the sponsors happy. Basically, a return to normality".
Italian financial newspaper Il Sole 24 Ore (via Forbes) claims that Inter Milan are negotiating with two financial firms, Bain and Oaktree Group, for a loan. They are looking for a loan over €250 million to cover their losses.
Inter Milan incurred losses of around €100 million in 2020 and this will reportedly rise to €150 to €210 million by the end of 2021. The club have already sold Achraf Hakimi to Paris Saint-Germain for a reported sum of €60 million. Lautaro Martinez is yet another player that the Nerazzurri are willing to sell for the right price.
#1 Barcelona
Barcelona's financial woes have been well documented. Barcelona's economic vice-president, Eduard Romeu, revealed that the club's provisional adjusted debt now stands at €1,044 million.
The Catalans' extremely high wage bill has been a contributing factor to their financial troubles. Their current wages are way above the La Liga salary cap and club president Joan Laporta is looking to bring it down by selling some of their highest earners.
Barcelona's situation is so bad that they are yet to register their new signings Sergio Aguero, Memphis Depay and Eric Garcia. Laporta is also looking to extend Messi's contract. The club are trying to find suitors for the likes of Antoine Griezmann, Samuel Umtiti, Philippe Coutinho and Sergi Roberto, among others.
They have already let go of several players like Jean-Clair Todibo, Konrad de la Fuente and Junior Firpo. Given the precarious financial condition that they are in, Barcelona will be forced to strike cut-price deals for some of their highest earners.
They have simply been run extremely poorly over the past several years and are now reeling from its long-term effects.
