FC BARCELONA: CHANGING THE RULES OF THE GAME
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DG1/481-I
FC BARCELONA:
CHANGING THE RULES OF THE GAME
Original written by professor David Allen and Raúl Eguía at IE Business School.
Original version, October 2004. Last revised, 15 September 2008. (R.L. 19 January 2012).
Published by IE Publishing Department. María de Molina 13, 28006 – Madrid, Spain.
©2004 IE. Total or partial publication of this document without the express, written consent of IE is prohibited.
"The club was in a dramatic situation of social break-up. Our candidature to the
presidency proposed a total change that was safe and innovative. A real change in the
management model. We had analysed the problem, the various situations that could
arise and how to deal with them, as well as how to execute the decisions we had
taken and how to make them compatible. However, we did not stop at the analysis; we
also prepared and executed very ambitious projects. It was an unorthodox situation.
We have done what management manuals recommend you should never do under
any circumstances. And we have done it in full awareness, since we were faced with
an exceptional situation. The key has been the capacity of the people in the everyday
routines and work of the entity. The interesting part is that we have managed to
change well and we have also generated innovation with regard to the management
model of entities. This is something that makes it a reference point1."
Joan Laporta gave this description of the management model implemented in his first year as
chairman of FC Barcelona. The crisis in which the club found itself — characterized by increasing
debt and the failure to win championships over several seasons — led a group of young
professionals to join together and present themselves for election to the presidency of the club.
They proposed a detailed project for change and against all odds the affiliated supporters of the
club gave them the most support that has ever been given to any candidate in 104 years. They
were elected and they implemented a new management model to reform and improve the three
most fundamental parts of the club: its sports management, economic management and social
management.
One year later, FC Barcelona is one of the leading football clubs in the world. In this case, the
protagonists themselves describe the challenges and the key factors that led to the club’s quick
transformation into one of the top five football teams in the world.
ELEFANT BLAU (the Blue Elephant): THE EMBRYO OF THE TEAM WHICH
WAS TO FRONT THE CHANGE AT BARÇA
On 6 May 1978, Josep Lluís Núñez was elected chairman of FC Barcelona by promising a renewal
of the club. His term of office lasted 22 years. During this time, the club underwent notable growth,
significant improvement in the organization’s finances and significant social expansion (a
considerable increase in the number of affiliated supporters and supporters’ clubs) and an increase
in assets — the opening of the Miniestadi (see annex 1) and successive remodeling of the stadium.
The club also had a sports record which took FC Barcelona to be the best club in the world in 1997
according to the IFFHS (International Federation of Football History and Statistics). Over these 22
1
Interview with Joan Laporta (17 February 2004). © IE
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years of leadership, special mention must be made of the period in which this so-called dream
team (1990-1994) managed to win four Spanish League Championships in a row, together with the
European cup, under manager Johann Cruyff (an ex Barca player and considered as one of the
best players in the history of football).
However, at the end of the so-called Núñez era the directors of the club were not popular with all
the affiliated supporters. In December 1997, a group of them, under the name of Elefant Blau (see
annex 3), launched a protest and presented a motion of censure against the club's chairman,
Josep Lluís Núñez. Elefant Blau was led by Joan Laporta, a young lawyer who had formed part of
the candidature of Ángel Fernández in the last elections to chairman of the club in June 1997.
Elefant Blau articulated its criticism of management by stating the following
"The scorn shown by the club’s directors towards the democratic culture that has always existed in
Barça, the erratic sports decisions they have taken,
BARÇA HISTORY (1899-1978)
which have led to great economic damage and the
lack of information about the real situation of the clubs
FC Barcelona was founded on 29 November economy.2"
1899 by Hans Gamper, a Swiss
businessman. The pitch known as Les Corts
was opened on 20 May 1922. It was called Elefant Blau, the group which opposed Núñez, had to
"the Cathedral of football" and was a obtain 4,600 signatures for the motion of censure to
magnificent stadium with an initial capacity for succeed. This did not happen until March 1999, when
30,000 spectators. It was also the main stage
for the growth of the club and represented its the resignation of chairman Núñez was again
golden age (1919-1929). In 1924, FC requested owing to the poor financial condition of the
Barcelona had 12,207 affiliated supporters. club. Joan Laporta's argument was as follows:
Years later, Barça won the first championship
of the Spanish league (1928-1929). The
outbreak of the civil war in 1936 forced the "This action must be completed as quickly as possible
team to play outside of Spain and resulted in to prevent the economic crisis we believe affects the
a magnificent tour around Mexico and the
United States, which saved it financially but
entity from worsening. At the end of the 1995-1996
also resulted in the loss of half of the squad, season, the club had 5,000 million pesetas in its cash
who remained exile in Mexico and France. In account [€30 million], and now it has a debt of 15,000
1950, the team had 26,300 affiliated million pesetas [€90 million]. We believe that this debt
supporters, and the team brought in its first
“crack” or star: Ladislao Kubala. has possibly been created intentionally in order to
Between 1951 and 1953, Barça won modify the future management model of the club. If the
everything in sight. This winning period debt continues, the club might lean towards a situation
included the golden season of 1951-1952,
when the club won 5 cups: the League, the which the board itself will seek to correct in order to
Cup, the Latin cup, the Eva Duarte and the explain and justify the change in the model. In other
Martini Rossi. As a result of Ladislao Kubala words, the change from a sports association to an
and his sporting triumphs the Les Corts
stadium needed to be expanded and the club
anonymous sports association3."
opened the doors to the Camp Nou in 1957.
The new stadium, which had an initial Although this time it obtained more than the signatures
capacity of 80,000 spectators. At this point
it needed to prosper, Núñez defeated the motion with
the team had 49,000 affiliated supporters. In
1971, FC Barcelona won the cup and in the support of 24,863 of the 40,327 affiliated
October the Palau Blaugrana and the ice- supporters who voted. This gave him an advantage of
skating rink were opened. Two years later, in more than 10,000 votes with regard to the opposition
1973, the signing of the Dutch player Johann
Cruyff gave rise to the famous football platform led by Joan Laporta, which obtained 14,358
machine which won the league championship votes in favour4. Alfons Godall, an affiliated supporter
in 1973-1974. With 69,566 affiliated of Elefant Blau, explains the reason for the
supporters, the club was now one of the most
powerful sports entities in the world and independent candidature of Joan Laporta:
celebrated its 75th birthday.
"We launched a motion of censure against the
One of the most internationally recognized
Catalonian artists, Joan Miró, painted the
directors in March 1999 and received 14,000 votes in
poster to commemorate this important date
favour. That was the beginning of the end of an era
which had lasted too long. According to the principle of democratic hygiene, a board of directors
and the chairman cannot remain in their posts for 20 years. This creates bad habits, defects and
2
El Mundo (12 December 1997).
3
El Mundo (16 March 1999).
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corruption, which is not good. With Elefant Blau, we set down the bases of what was going to be
the action in the future: the presentation of an alternative candidature in the elections4."
One year later, in 2000, Josep Lluís Núñez resigned and elections were called to select a new
chairman of Barça. Two candidates ran for the position: Joan Gaspart (the former vice-chairman
under Josep Luis Núñez) and Lluís Bassat (a publicist who owned Bassat & Ogilvy). Joan Laporta,
leader of Elefant Blau, also stood for election as part of the candidature of Bassat. In the words of
Alfons Godall:
"In 2000, Núñez resigned and elections were called. Joan Laporta wanted to stand
with his own candidature, but he was advised not to do so because it was too soon.
The vote on the motion of censure (promoted earlier by Elefant Blau) was the reason
why the media had generally opposed his candidature. Therefore, we stood as part of
the candidature of Lluís Bassat, who supposedly represented the change. However,
when one delegates in other people, projects never work well. Throughout that
campaign, we were very worried because at times it seemed that there was a pact
between Joan Gaspart and Lluís Bassat to avoid a vote. We didn't think this was right,
since we believe that it is of fundamental importance to uphold the democratic
principles of an associative club like Barça. Finally, we managed to prevent a pact
between Lluís Bassat and the party in power, and the voting went ahead. For reasons
that are difficult to explain — I think possibly because people were afraid of the
change — Gaspart won the vote as a continuity of Núñez's mandate 65.”
JOAN GASPART: A CONTINUIST CHAIRMAN
On 23 July 2000, with 54.81% of the votes, Joan Gaspart Solves became the new chairman of FC
Barcelona. His first proposal was to restructure the club. To do this, he appointed a managing
director as the executive in charge and the club was separated into five large areas: economy and
finance; sports; commercial and marketing; social communication; and assets. Each area was
under the management of five executives and five vice-chairmen. Furthermore, a board of advisers
was created with affiliated supporters such as former chairmen, former players and illustrious
Barcelona supporters. Gaspart gathered together all the sectors of Barcelona support into a macro-
board of 100 directors, which was dissolved before the end of the first year as it was deemed
impractical and unwieldy.
In 2001, the club invested 15,331 million pesetas (€92.14 million)6 in signings players. This amount
was doubled in the following year to €189 million7. During this time, the club did not win any titles.
Two years earlier, the club had a net debt of €82 million, which in 2002 had grown to 181 million.
Furthermore, the vice-chairmen Jaime Llauradó, Josep Martínez-Rovira and Ángel Fernández
questioned the management and resigned, following the footsteps of other directors who were
close to Josep Lluís Núñez.
In December 2002, 133 Barcelona supporters and more than 200 affiliated supporters signed the
so-called Alcarrás manifesto, a text which demanded the resignation of the club's chairman. Lluís
Bassat, a candidate to the elections of 2000, also signed the petition:
"Personally, I am asking him to resign as a demonstration of his support for Barcelona8."
In view of this social pressure, Gaspart's plan was presented on 1 January 2003. This was a
strategic plan comprising 30 economic social and sports measures which would be applied during
4
Interview with Alfons Godall (5 July 2004). © Instituto de Empresa.
5
Interview with Alfons Godall (by July 2004). © Instituto de Empresa.
6
El Mundo (25 December 2001).
7
El Mundo (13 September 2002).
8
El Mundo (13 December 2002).
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2003. The objective was described by Javier Pérez Farguell, managing director of the club, as
follows:
"Implementing a slight increase in the dimensional and economic strength of the
institution, modernising the organisational structure to make it more efficient, dynamic
and competitive, and consolidating the club's position as one of the best in the world9."
In February 2003, FC Barcelona was the football club had the most debt of any major sports club in
Spain, totaling €230 million10. The budget for the 2001-2002 season, initially estimated at 154.2
million, finally tallied at 194 million11.
The problems in the sports management (which was a unwieldy policy for signing players, poor
continuity in sports staff - four different managers and poor on the field results - no title), the
organisational management (changes in the organisation chart), the economic management (the
club that was taking on ever increasingly levels of debt) and the social management (the affiliated
supporters showed their disagreement with the chairman's management by booing and waving
white handkerchiefs during many of the matches played by FC Barcelona in Camp Nou) led Joan
Gaspart to resign on 12 February 2003, two and a half years after he had become chairman. Enric
Reyna (third vice-chairmen in Gaspart's organisation) was appointed as a temporary chairman and
was to carry out the functions of the position until the elections, which had been brought forward to
June. Joan Laporta gave his opinion of the resignation:
"It is a demonstration of responsibility which I respect and share12."
However, Enric Reyna failed to win the elections and on 5 May 2003, during the extraordinary
assembly of delegates, he presented his resignation with the rest of his board. From that moment
on, the club was governed by the management commission run by Joan Trayter, whose objective
was to run the club until the elections of 15 June 2003.
The final three seasons led the club to a situation of deep crisis, break-up and social
disenchantment. In the last season, with Josep Lluís Núñez as chairman (1999-2000), income
totaled €118.7 million, which reached only 123.4 million (an increase of 3.9%) at the end of the
third year of management (the 2002-2003 season). Expenses, however, doubled and grew by
79.5% from €109 million in 2000 to 195.7 million in 2003. Joan Gaspart increased the price of
being an affiliated supporter by 15% in 2001 and by 5.4% in 2002. In 1999-2000, salaries totaled
46 million and in 2002-2003 this total was 102.5 million, which represents an increase of 122.8%.
From 151 employees in 2000, the figure increased to 188 in 2002 (24.5% more) and contracts
were signed with top executives. The three financial years closed with a deficit in ordinary activity:
€38 million in 2000-2001; 48 million in 2001-2002; and 71 million in 2002-2003. The candidates
were aware of the clubs financial and sports operations related problems and that the development
of a sound strategic project was of key importance in the election campaign.
THE ELECTION CAMPAIGN OF 2003
Joan Laporta, former leader of Elefant Blau, the platform which opposed Núñez, was asked to be
part of the management team led by Lluís Bassat to take over the club, as had happened in the
elections of 2000. However, he rejected his inclusion on Bassat’s list because "affiliated supporters
must continue to own the club13."
9
El Mundo (1 January 2003).
10
Association of users of financial services.
11
El Mundo (7 February 2003).
12
El Mundo (8 February 2003).
13
El Mundo (20 May 2003).
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Alfons Godall explains the reason for the independent candidature of Joan Laporta:
"In 2000, we learned the lesson that one should defend one's own projects. That's why
we presented the candidature of Joan Laporta14."
TABLE 1
ELECTION CALENDAR
ELECTION CALENDAR
8 May Notice of upcoming election
13 May Designation of the affiliated supporters who will make up the election board and table
15 May Constitution of the election board and table
16 May Publication of the electoral roll and handing out of ballot papers for the collection of signatures
20 May End of the publication period of the electoral roll
23 May Approval of the definitive electoral roll
24 May Start of the period for the presentation of candidatures
31 May End of the period for the presentation of candidatures (21:00)
4 June Announcement of candidatures
5 June Start of the election campaign period
13 June End of the election campaign period
14 June Day of reflection
15 June Elections (Miniestadi, from 09:00 to 21:00)
Six candidates stood up for election, with Lluís Bassat as the clear favourite according to surveys.
On 30 April 2003, Lluís Bassat had 42.6% of the votes according to the surveys and Joan Laporta
had 2.2%. Almost one month later, on 20 May, Bassat seemed to have consolidated his leadership
with 44.65% support according to polling data, whereas Joan Laporta was only polling at 11%.
THE TEAM BEHIND THE CANDIDATURE PRESENTED BY JOAN LAPORTA: THE CHANGE
The hard core of the candidature presented by Joan Laporta was made up of former affiliated
supporters of Elefant Blau (Alfons Godall, Albert Vicens, Alfons Castro and Jordi Moix). Joan
Laporta attracted the hard core to the collective protest movement known as Els Pinyols (the fruit
stones), a group with very Catalonian root which collaborated with non-governmental organisations
such as Justicia i Pau (justice and peace). Jordi Moix put Laporta in contact with Sandro Rosell,
former director of Nike for Spain and South America, and son of Jaime Rosell, ex manager at the
club. Rosell added another family to Elefant Blau and Els Pinyols: He signed up Marc Ingla, a
partner at the consultancy firm Diamond Cluster (formerly Clusters Consulting), a firm that had
launched numerous telecommunications projects. In turn, Marc Ingla brought another partner from
Diamond Cluster into the candidature: Ferran Soriano.
14
Interview with Alfons Godall (5 July 2004). © Instituto de Empresa.
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TABLE 2
1: Joan Laporta. 2: Sandro Rosell. 3: Albert Vicens. 4: Ferran Soriano. 5: Alfons Godall. 6: Marc Ingla.
Everything came together in only a few weeks, remembered Sandro Rosell, Ferran Soriano and
Alfons Godall, respectively:
"Barça is part of my life. As a worker in the sports business, I was embarrassed by
what was happening to Barça. So I decided to join a project to help the club become
what I had known it to be during my childhood. At the beginning, I had a few meetings
with Bassat and was on the verge of taking a decision when I received a phone call
from Jordi Moix. I then met with him and Joan (Laporta). Joan told me that nobody
knew that he wanted to present an independent candidature. I had known Joan for 20
years because we had played together in the same football team, Sant Andreu, but we
hadn't seen each other since then. We met that night in Hotel Hesperia. After dinner
and after speaking for six hours about Barça, around two o'clock in the morning, we
shook hands and decided to begin the project to present our candidature for the
elections15."
"Marc Ingla met Sandro Rosell and then we met Alfons Godall and Joan Laporta. Nine
weeks before the elections, we met together over breakfast in a bar. We talked about
what we would do with Barça with regard to management, sports and social
management, etc. We realised that our ideas made a lot of sense and that we all
agreed with each other. Some others had received offers to take part in another
candidature, but we decided that as a group, our profiles were quite similar. We were
all around 40 years of age and agreed about what had to be done with Barça. We
decided to present our candidature. We weren't sure that we were going to win but we
did know that we were capable of putting together a good project, of learning and,
perhaps, winning in four or eight years’ time. The elections were called two weeks
later. We therefore had seven weeks and a lot of work to do16.”
"We had been working in and around FC Barcelona for a long time, writing opinion
articles, analysing the club's progress on a social and economic level and looking at its
image and future. We attended conferences at the University of London on the
analysis of the football business in the digital era. We had a very elaborate vision of
the real situation and of the business itself. As soon as we saw that Gaspart would not
end his office, we set to work. We had all the financial information about the club from
15
Interview with Sandro Rosell (8 July 2004). © Instituto de Empresa.
16
Interview with Ferran Soriano are no (5 July 2004). © Instituto de Empresa.
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1996. This enabled us to put together a very specific analysis which led us to the
conclusion that sports and economic management were closely related. It is very
important to have a clear policy for salaries and signings, as well as for bringing in
players from the youth teams. In short, to run a club like Barça you have to have a
model and we had been working on such a model. Furthermore, during the months
prior to the elections of 2003, we met up with top-level executives in sports and
economic management, such as Sandro Rosell, Marc Ingla and Ferran Soriano17."
Joan Laporta put together a list of candidates with Barcelona supporters from different areas
(sports managers, strategy consultants, etc.), entrepreneurs, with a creative and global vision for
business. His candidature was presented under the motto Primer, el Barça (Barça comes first).
Joan Laporta was committed to change:
"Continuism takes you nowhere. It is time for a change at both sporting and
management levels18."
JOAN LAPORTA'S PROJECT
Laporta’s project was based on an initial investment of €50 million, with an increase of income and
a reduction of expenses which would end with a zero deficit in the first year. The plan promised to
grow revenue in the following four until the club was at the same levels of sports and economic
prestige as during the era of the dream team put together by Johann Cruyff.
"The idea was to position Barça back at the top of the world of sport and media.
Manchester United charges €2 million for each friendly; Barça charges only €300,000.
We must succeed in achieving the situation where a young boy in Singapore or Tokyo
wears a Barça shirt and not a Manchester United shirt."
The net investment of €50 million would be aimed, in principle and partially, at signing a big star in
the world of football such as David Beckham, who was playing for Manchester United at that time.
That investment was part of the so-called "virtuous circle" for Barça's revival (see table 3) as a
result of sporting success that would generate greater enthusiasm and higher income.
TABLE 3
THE VIRTUOUS CIRCLE OF FC BARCELONA
2
Great sport
1 Sign the Return to the
results 3
best fore of the world
players of sport and
media
Sports
area
4 New
9 International
projection of sources of
Barça income
Social Economic
area area 5 ... at the same
time as
rationalising
8 spending
Identification and
cohesion of affiliated 6
supporters and other 7 Continued Capacity for
supporters strengthening expensive
of the team signings
17
Interview with Alfons Godall (5 July 2004). © Instituto de Empresa.
18
El País (9 June 2003).
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Joan Laporta detailed his objectives: keep FC Barcelona independent from financial and political
groups and not sell the club's assets, together with a greater commitment to the historic values of
the club (support for Catalonia, public-spiritedness, democracy, etc.). It was a commitment to an in-
depth renewal of all facets of the team. Laporta’s objective was to achieve income of €200 million
per annum in the medium-term.
The campaign was developed under the leadership of Ferran Soriano as campaign director. Alfons
Godall pointed out the following:
"The incorporation of Ferran Soriano was of key importance for the organisation of the
campaign with regard to the distribution of tasks and persons in charge. As an
executive, he had led a series of complicated projects19."
The expertise of the various affiliated supporters of the candidature was put into practice and the
planning and training of the messages we issued was critical. In the words of Ferran Soriano:
"Marc Ingla and I stopped working in our companies. We put together a strategy plan,
which was a 100-page document with a classic professional structure: what the
industry is like, where its strengths lay, what competitors do, etc. I also contacted a
political consultant in Washington to find out how an election campaign is put together.
In several sessions, he told us how campaigns are organised in the United States,
who does what, etc., and we organised ours. During those seven weeks, I took up the
post of campaign director and we hired a press officer: an adviser from Barcelona who
was recommended by the political consultant in the United States. This person fulfilled
the role of political adviser and helped with the construction and transmission of the
message, etc. The campaign was planned in detail. Our message was clear and
direct: "Change". The adviser helped us shape the message and decide on the timing
when the messages would be transmitted. We had a strategic project for the club
which was well-prepared and set down in that 100-page document (no other candidate
did this), individuals with drive and capacity, a great candidate and a message: "The
change"20.
"During the first weeks, we focused on the project to increase our credibility and to
become a consideration. The risk to which we were exposed was that we would be
considered too young. Consequently, we made great efforts to qualify ourselves. We
took the strategic plan and we explained it to the leading journalists in the city,
including sports and economy journalists. This gave us our qualification. The next
thing we did was to speak about ourselves, about our team. And the third thing we did
was to speak of the change, but we did this after we had qualified ourselves because
if we had done it the other way round, we might have failed. Only in the fifth the week
(three weeks before the elections) did we speak about change: "We are the change".
In the sixth week, we change the message and we said: "We are the change wanted
by the majority". And in the last week, we said: "We are ready to govern". On the last
day, we published an insert in the newspapers containing the strategic plan.”
"For seven weeks, five all of us worked full-time on the project: the candidate; Marc
Ingla, who was given all the ideas, working on the business plan and a strategic plan;
Sandro Rosell, who is experienced in the world of football and transmitted the
message there; Alfons Godall, who was responsible for economy and Finance; and
myself, who worked as campaign director. All the other candidates who were to form
part of the board of directors also worked on the project, albeit part-time. We also had
a team of qualified collaborators who were working non-stop. We spent seven weeks
in premises on Paseo de Gracia, where we had a meeting every day at eight o'clock in
the morning. During the meeting, we set out the planning for what would happen
19
Interview with Alfons Godall (5 July 2004). © Instituto de Empresa.
20
Interview with Ferran Soriano (by July 2004). Instituto de Empresa.
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during the day. We wrote what was to happen each day on a wall, together with the
message that day, so that everyone knew the idea they had to get across21."
"I think that was the first time anything like that had been done in the world of football.
What we did was to bring together the expertise of management and to buy the
expertise of campaign management. My experience as a partner in a consultancy firm
was important for two reasons: for putting together a plan and also for the
organisation. The seven weeks’ work was very intense and costly. The people who
had taken part in previous campaigns thought that an election campaign was
something chaotic and disorderly, but we put together a campaign that was organised
and focused. In hindsight, we perhaps did more work than we needed to because "we
won by a huge difference". We started out in last place and the opponent was very
important (he owns a huge advertising agency and we were simply a group of
friends)."
"We had to work twice as hard and we had to do it four times better. We set up this
campaign machine and Bassat simply didn't react until the last week. I think there may
be several reasons that this: he tried to put together a candidature of consensus; he
tried to create political balance, a consensus among Barcelona's establishment, and
that takes up a lot of energy. While you're doing that you don't put together any
content. Secondly, he underestimated us: he realised he had a problem when there
were three weeks left. And when he realised, we were at the crossroads and we had
surpassed him in voting intention. We were on the way up and he was on the way
down. He was overconfident. When he realised, it was too late22."
THE RESULT OF THE ELECTIONS
On 8 June, Joan Laporta had cut into Basset’s lead. The surveys showed that Bassat had 26.6%
support and Laporta had 23.9%23 (see table 4). Five days later, Joan Laporta, improved to 29.5%,
surpassing Bassat, who had 28.324, in the surveys.
On 15 June 2003, Laporta won the elections with 52.57% of the total (27,138 votes). He beat Lluís
Bassat by 21 points (31.80% and 16,412 votes) and he also set a new record for the number of
votes ever in Barça's history (25,441 votes for Josep Lluís Núñez in 198925) (see annexes 4 and 5).
Laporta was to be the new chairman of Barça with a young team of directors (an average of 40
years of age) and with four years of office in front of them (until 30 June 2007). Joan Laporta:
"We forced Bassat to change his opinion. The new image of Barça is on the move26."
"People have wanted and made a commitment to the change27."
21
Interview with Ferran Soriano (by July 2004). Instituto de Empresa.
22
Interview with Ferran Soriano (by July 2004). Instituto de Empresa.
23
Durán-Tortosa survey, data presented in Sport (8 June 2003).
24
Durán-Tortosa survey, data presented in Sport (13 June 2003).
25
El País (15 June 2003).
26
El País (16 June 2003).
27
El País (17 June 2003).
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TABLE 4
SURVEYS FOR THE 2003 ELECTIONS
45%
40%
35% Survey Date Bassat Laporta
30%
1 30 April 03 42.60% 2.20%
25%
2 20 May 03 39.50% 10%
20%
3 08 June 03 26.60% 23.90%
15%
10% 4 13 June 03 28.30% 29.50%
5%
0%
1 2 3 4
Alfons Godall speaks of Laporta's leadership in the following terms:
"From a very young age Joan Laporta showed the qualities of a leader. He was an
individual with very strong principles, a hint of rebellion and he had very prominent
characteristics of a student leader. Laporta won the elections against all odds because
we were capable of generating the enthusiasm and hope for the change. He also
showed himself to be a leader here28."
A YEAR FOR THE CHANGE: TOWARDS A NEW MANAGEMENT MODEL
Joan Laporta talks about the first steps taken by the club:
"The process took on continuity from the moment we won the elections. We had
planned a package of 45 measures which we were to adopt from the very first day.
This meant that we were very clear about each of our functions, as we had made clear
in the campaign. We had analysed the problem, the various situations that could arise
and how to deal with them, as well as how to execute the decisions we had taken and
how to make them compatible. This is not an orthodox method in the world of
business management. We were not satisfied simply with the analysis; we also
wanted to be compatible with the preparation and execution of very ambitious
projects, which would enable us to achieve what we had proposed in the election
campaign. That is why we organised the Gran Repte campaign and canal Barça TV,
together with other projects which were developed in parallel to the shock we had to
create29."
In the first meeting of the board of directors, after taking up our posts, we defined the positions and
responsibilities of the board (see annex 6).
THE REAL SITUATION OF THE CLUB
It was important to discover the real situation of the club in order to develop action plans for the
possible deviations from the estimates we had made in the Barça comes first project. Joan Laporta
pointed out the following:
28
Interview with Alfons Godall (5 July 2004). © Instituto de Empresa.
29
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
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"We had to know where we stood. Our first obligation was to make the club work30."
To do this, the new directors performed an audit. Sandro Rosell:
"The decisions have been developed, but now we have to confirm the diagnosis. We
must perform an audit in the economic and sports areas31."
The audit revealed that at the close of the last financial year (30 June 2003), the real situation of
the club differed from that put forward by Enric Reyna on his resignation, when he stated that the
net debts totaled €98 million. The audit showed that FC Barcelona had suffered the largest net
losses in its history (€164 million) during the 2002-2003 season. Ferran Soriano, economic vice-
chairman, acknowledged in a press conference that the club had generated €123.4 million in
income while spending a total of €195.7 million, which, implied losses from the ordinary activity of
€72.3 million. These losses had increased to €164 million, 33 as a result of other activities
including: a €29.5 million tax bill; and another totaling €63.8 million to compensate the losses
resulting from the signing of footballers by previous directors. Joan Laporta argued the following:
"What surprised us most were the commitments that had been taken on. There was
no logic in either the price or the term. I am disappointed to see that these
commitments have been accepted because they do not benefit the entity and, to a
certain extent, they condition the club's future. However, the situation can be
corrected32."
The way of correcting the situation and turning the club into a solvent entity was based, according
to Ferran Soriano, on three pillars: creating clear objectives; introducing an in-depth organisational
change; and maintaining an aggressive attitude. About the third of these pillars, Ferran Soriano
said the following:
"One of the most important factors has been the concept of what has to be done this
year. An aggressive turnaround had to be carried out. When I appointed myself as
managing director, I spoke with the employees and I told them the following: "This is
like a start-up: In the next 12 months we are going to turn everything around. This is
the only priority and I don't want to see anyone worrying too much about the tiny
everyday problems with the organisation33."
A NEW ORGANISATIONAL MODEL
The new organisational model included a team of directors who had made financial commitments
including providing a guarantee for their management totaling €25 million. They had left their
companies to work full-time at the club and did so without pay for the first year of the change. After
this first year of management, they were to be replaced by professionals in the field. Furthermore,
one of the pillars of the new organisational model was the in-depth organisational change in both
structure and personnel. To do this, in the first weeks the directors from the Gaspart-Reyna era
were replaced. Ferran Soriano:
"The management committee was made up of nine people and after four weeks,
seven of them left. In the meantime, we had recruited people and we had trained
interdepartmental teams. We then hired freelance workers and reliable consultants to
take up executive positions and to implant the organisation while we hired the
definitive executives. Consequently, the project also included a change in personnel.
The eventual justification lies in the results. The previous team had lost €70 million
and the general atmosphere was one of disappointment. We thought that they were
30
El País (23 August 2003).
31
El País (17 June 2003).
32
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
33
Interview with Ferran Soriano (5 July 2004). © Instituto de Empresa.
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incapable of completing the change. We assumed the risk of asking some of the top
executives to leave without having replacements at the ready. We did this because
we knew that with those people the change was not possible. We began to hire people
who had no experience in the world of football. We sacked people and Marc Ingla and
I took over the management positions ourselves. We had to complete a full
turnaround, almost as if it were a start-up34."
The organisational model focused on creating interdepartmental change, but many noted that
executive leadership changed as well Contrary to traditional models of change management, in this
case the directors participated in daily operation decisions – essentially “dropping down” a level in
the hierarchy of the organization to lead the change from executive positions (rather than trying to
change the organization simply through standard Board meetings.) This unique situation lasted
only through the first year. As Joan Laporta explains:
"The impact on the directors has been one of a renewal and almost complete
replacement, with the incorporation of new expert executives in each of the
fundamental areas in the entity. The management model we want to implement during
this shock phase (first six months and/or first year of management) consists of
directing the club with the new executives and directors, who are the members of the
board, involved in the management. One particular case is that of the economic vice-
chairman, who is also completing the functions of managing director (Ferran Soriano).
Each of the vice-chairmen intervenes directly in the management and in my case, as
executive chairman, my function consists of coordinating the team as a whole.
Everyone works in conjunction with a vice-chairman and a director. This is not an
orthodox situation. The management manuals recommend that this should never
happen, but we have done it. And we have done it in full awareness, since we were
faced with an exceptional situation35."
THREE ACTION AREAS: THE SPORTS AREA, THE ECONOMIC AREA AND THE SOCIAL
AREA
THE SPORTS AREA
One day after Joan Laporta's became as chairman of the club, the new sports vice-chairman of
Barça held a meeting with Javier Pérez Farguell (managing director of the club in the previous era)
to talk about the most urgent matters. The new board of directors will have to solve almost
immediately the future of the current manager, Radomir Antic, and also that of five players.
A few days later, Txiki Beguiristain, a former Barcelona player, is appointed as the new technical
secretary of the club. In 2000, Beguiristain had represented the sports area of Bassat's candidature
to the chairmanship. Beguiristain describes the club’s project in this area as follows:
"Our aim is to achieve a football identity and the style that distinguishes the club. We
have four years to put together a team which will grow in keeping with an idea, a style
and a unique way of playing football. The first step was to sign the manager, a coach
who symbolises the football concept we are looking for. Now we have to put together
the squad. We cannot mix things together — as we have done in the past. Now we
have to gradually shape our idea: discarding and signing step-by-step36."
On 23 June 2003, Frank Rijkaard, the former National coach of Holland, reached an agreement to
become the new manager of Barça. Once the organisation of the sports area had been established
with Sandro Rosell, Txiki Beguiristain and Frank Rijkaard, the new management began formulating
34
Interview with Ferran Soriano (5 July 2004). © Instituto de Empresa.
35
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
36
El País (14 July 2003).
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policies in keeping with the provisions laid down in the strategic project of the candidature. To do
this, and taking the virtuous circle as a model (see table 3), the first step was to sign international
stars.
During the campaign, there was talk of signing David Beckham. However, owing to the impossibility
of signing the player — he eventually signed for Real Madrid C.F. — the club decided to sign
another player with similar characteristics: Ronaldinho de Assis Moreira (Ronaldinho Gaucho).
Ronaldinho was the fifth signing of the Laporta era and his first star. The player signed for five
seasons and for €27 million plus another 3 million linked to Barça's results; the payment was
spread over five years37. Joan Laporta described the signing as follows:
"Beyond the magic in his boots, we have a player of great human quality, a man who
is very close to the people. He is the type of player we want to represent Barça38. We
could not let the opportunity of signing Ronaldinho pass us by. The importance of this
signing is firstly economic, since 75% of the investment in this area has been placed
on this player. The other players have great futures, but their amounts are not
relevant in relation to the club's budget39."
The new board of directors proposed its objectives for the sports management. Joan Laporta:
"As with all culés40, I would like to win every title, but the technical team is being very
careful and is saying that time is needed to form the right squad: We have minimum
objectives, which includes being among the top four in the Spanish league and
reaching the final of the UEFA cup41."
THE ECONOMIC AREA
"We found out about the situation of the entity through the official accounts that were
adopted by the club. We had the economic financial information and knowledge about
the world of football thanks to our past and by monitoring the sports and social activity
of the club. The surprises came when we carried out a due diligence on taking up our
posts and reviewing everything. The economic magnitudes were as we expected;
however, confirmation of the fact surprised us. There was an operative deficit of €70
million. Furthermore, after the provisions we had to make, we reached a deficit of 164
million and a debt of 150 million. In any case, of all the things we discovered it wasn't
this that surprised us most because this could be solved by reducing expenses,
increasing income and refinancing the debt42."
Joan Laporta describes the basic guidelines for the management of the club's economic area as
follows: reduced spending, an increase in income and refinancing the debt. To this, he set up a
workgroup. Joan Laporta:
"Four people worked full-time in the financial area during the months of July, August
and September. We monitored the refinancing process on a daily basis and dealt with
the situations as they arrived. We had to act like firemen: putting out fires43."
The new board of directors wanted to reduce expenditure from €195 million to the €165 million
budgeted for 2004-2005. To do this, their objectives were clear: zero-deficit, with a deadline set for
30 June 2004. The cutback in spending would be divided into two large areas: the reduction of the
37
Le Figaro (21 July 2003).
38
Canal Barça “100 days” (30 September 2003).
39
I nterview with Joan Laporta.
40
This term refers to all FC Barcelona supporters.
41
Marca (9 September 2003).
42
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
43
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
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players’ fixed salaries and the dismissal of top level executives who were being paid astronomical
sums of money.
The increase in income was to come from increased ordinary and extraordinary income. The new
board of directors presented a strategic plan for increasing the €125 million to €162.7 million. The
club wanted to distribute income among five areas: The renegotiation of television rights (€7.2
million); the increase in the price of season tickets (€8.5 million); the renewal of sponsorship
contracts with the brands that were already being advertised at the club (€3.5 million) so that the
team's goals would appear on the screens of users anywhere on the planet (€2.5 million); and the
profits resulting from the new policy for tickets sales (2.5 million).
La Caixa and the solution to the debt
FC Barcelona could not pay its debts in this first year. Ferran Soriano described the club's situation
with this simile:
"We have picked up a rucksack that is very heavy and we can't walk with it44."
"During the first year, we won't be able to pay anything. And in the second year, very
little. We can't walk with this rucksack. We are negotiating with four groups of banks to
restructure the debt. The weight of the rucksack can't be changed, but we can change
its shape45."
The need to renegotiate the debt in the long-term was critical, since without that the club would not
have resources for investing in its sports project (the first point of the virtuous circle), which would
destroy the new board of directors’ strategic project.
At the beginning of December 2003, FC Barcelona reached an agreement with La Caixa, a bank
which was to lead a syndicated credit agreement for €151 million46 together with other entities such
as Banco Sabadell, Caixa Catalonia, Banco Popular, Banesto, Caja Mediterráneo (CAM), Cajamar
and Deutsche Bank. The transaction, which was spread over seven years, would make it possible
for the current sports project to go ahead and for the sports centre in the Barcelona town of Sant
Joan Despí to be completed. Joan Laporta:
"We convinced the banks that the important thing at that time was to invest in the
sports project. We worked very professionally. We spoke with the banks and they
trusted our business plan. They were convinced by the idea that it was innovative in
the world of sports entity management. To start with, they advanced the payments for
affiliations that were to be made in August (€35 million) and this advance put us in a
position where we could begin to negotiate with, I think, a certain amount of success.
Finally, we reached an agreement on the syndicated credit and this has enabled us to
refinance the debt over seven years as well as reduce costs. This made it possible to
make the debt compatible with investments in signings, since we now had a certain
amount of room to move47."
Reduction of expenses: deficit-zero
From the beginning, the new board of directors took measures to control spending by eliminating
intermediaries for certain services, contracting suppliers by means of tenders and reducing the
number of invitations at the football matches played at Camp Nou. The objective was clear: the
44
El Entorno Blaugrana (23 October 2003).
45
El Entorno Blaugrana (23 October 2003).
46
El Mundo (5 December 2003).
47
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
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reduction of spending in order to achieve a zero deficit. This is how it was explained by Joan
Laporta and Ferran Soriano, respectively:
"The situation was dramatic. Consequently, we drew up a very aggressive business
plan which consisted of achieving deficit-zero in the first season, in other words,
reducing spending and increasing income in such a way that the €70 million deficit
would be reduced to zero during the first financial year. Then, we would have to deal
with investments in signings and the payment of salaries48."
"The objective was easy to see and that helped us a lot: ‘deficit-zero’. Last year, the
club lost more than €70 million and this year we are going to lose nothing.
Furthermore, we were hampered by a historic debt that was not very well structured
and totaled approximately 150 million. Our objectives were easy to communicate: stop
losing money, no excuses49."
This clear objective of deficit-zero had two main areas: the dismissal of top level executives who
were being paid astronomical sums of money and the reduction of the players’ fixed salaries.
As for the first area, the new organisation model, according to which new directors guaranteed their
management work with €25 million and carried out executive tasks during one year with no pay,
made it possible to fall in line with the policy that was established. Furthermore achieving a zero-
deficit was an objective for the entire organisation, in other words, the new executives who were
hired — Anna Xicoy (finance), Laurent Colette (installations), Jordi Badia (communication), Laura
Alsina (external relations) and Elias Frade (security) — and the executives in the previous
organisation chart — Esteve Calzada (marketing), Josep Vergés (resources and services) and
Fèlix Palau (information technology) — also accepted a variable salary which was linked to the
objectives achieved: 50% for posts with greater responsibility and 25% for the rest.
Furthermore, the board made sure that all the directors realised on a daily basis that this objective
was fundamental for the development of the club's strategic project. Ferran Soriano:
"We even started to measure the degree of compliance with deficit-zero (now every
month, but during the first months it was every two weeks). All the department
managers were called to a meeting so that everyone felt the pressure of the objective.
We said, "this is how much you are going to spend and not a penny more50".
All the purchases made by the club had to have a person who was responsible, and the more
important contracts would be carried out by tender. Under these criteria, we initiated our physical
transformation which included altering the offices, a change that made it possible to revitalise the
club and create open spaces and better ergonomics, where it would be possible to encourage
interpersonal contact and the flow of new ideas. The idea was to give the club a new look,
beginning in the back office and extending to the most visible area: the pitch. Another of the
measures taken by the board was to review the guest and invitation packages implemented by the
previous directors. Up to the previous season, 6,900 people had seen a football match at Camp
Nou for free. The club gave away 4,800 tickets: 600 season tickets and 1,500 invitations. The
directors used most of them, as they did the almost 600 tickets to the chairman's box, and
expected to receive between €3-4 million for the sale of these tickets.
As already mentioned, the second critically important area for achieving deficit-zero was the
reduction of the fixed salaries paid to the players. The new directors understood that the players’
salaries were ‘too high':
48
Interview with Joan Laporta (17 February 2004). © Instituto de Empresa.
49
Interview with Ferran Soriano (5 July 2004). © Instituto de Empresa.
50
Interview with Ferran Soriano (5 July 2004). © Instituto de Empresa.
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"The team's salaries? All I can say is that they are too high. The multi-million salaries
we have to pay have been inherited. As far as we can, we are going to apply a more
rationalised salary policy51."
The imposition of a more rational salary policy involved limiting signings to below €50 million. Joan
Laporta reiterated the policy of austerity:
"We have set down a series of economic conditions and we intend to uphold them
whatever the consequences52. As for the players that were already under contract to
the club when we arrived, we understand that some of their contracts are not in line
with our philosophy. Consequently, together with our trainers and the technical
secretary, we have to restructure these contracts in a way that benefits both the
players and the club. To this end, we have opened negotiations with some of them
and we are receiving their cooperation. As for the new players, the club has
established a fixed amount that is indexed to a variable in accordance with
performance and titles53."
Laporta’s final objective was for the squad to receive a salary with a fixed part and a variable part.
This is how it was explained by Txiki Beguiristain and Ferran Soriano, respectively:
"We are working with previous contracts. We need another year for all the squad to
be receiving a salary in accordance with the same structure. Clearly defined objectives
have been laid down: classifications, and then titles. Each member of the squad and
their responsibility are valued so that the way in which their salaries are paid is the
same. We are convinced that the dual format of fixed/variable salary is a good idea
and that these amounts should be 60:40 or even 50:5054.”
"We want the players to share more risks with the club. For example, we propose that
if they are paid 100, they should be paid 70 as fixed payment and 60 as a variable55."
The new directors wanted to save €40 million with the changes in their salary policy. The new
signings — except for Ronaldinho owing to his status as star — reduced the cost of salaries with
regards to the players who left the club. Furthermore, the salaries of other players were reduced:
"We have had the good fortune, the skill and understanding of players who have come
new to the club and of others who were already in the squad and who are prepared to
accept a reduction in their salary. We must be very grateful for this because it means
that everyone in the club is becoming involved in the project56."
As Joan Laporta stated, the cost of the squads was reduced by €15-20 million. Ferran Soriano:
"With the reduction of the salaries paid to the footballers, we have managed to save
between €15 and 20 million for the club each year57."
However, despite the debt, Barça (with €41 million58) was the European club to invest the second-
highest amount in signings during the 2003-2004 season, second only to Chelsea. This meant the
club incorporated seven new players: Rüstü, Luis García, Márquez, Cuaresma, Ronaldinho, Mario
and Van Bronckhorst.
51
El País (5 August 2003).
52
El País (7 July 2003).
53
Canal Barça "100 days" (30 September 2003).
54
Interview with Txiki Beguiristain (8 July 2004). © Instituto de Empresa.
55
El País (5 August 2003).
56
Marca (9 September 2003).
57
El País (5 August 2003).
58
El País (5 December 2003).
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Increased income
Parallel to the reduction in spending, the new directors face the challenge of increasing income
sufficiently to position Barça among the top four or five clubs in the world with regard to income
(see table 5). Ferran Soriano:
"We needed to increase our income because Barça was number 13 (on the list of
football clubs by income) and 10 years ago it was among the top three. This position
does not correspond to FC Barcelona. It is our aim to position the club among the top
four or five with the highest income in the world and this cannot be achieved gradually;
we have to make a huge leap59."
TABLE 5
INCOME FOR THE 2002-2003 SEASON (IN MILLIONS OF EUROS)
251.4
218.3
200.3 200 192.6
162.7 162.4
149.6 149.4
138.9 133.8 132.4
123.4 119.5
Man. Utd. Juve Milan Barça Madrid Bayern Inter Arsenal Liverpool Newcastle Chelsea Roma Barça Schalke
2006 Utd. 04
To do this, Barça tried above all to create a higher level of enthusiasm throughout the organization
and within the club’s supporter base. This would lead to an increase in the average attendance at
the stadium during the season. The new directors began to set up innovative projects, transforming
match days at the stadium into spectacular shows. With this, they tried to attract affiliated
supporters through a series of spots which showed the club's players in cartoon form, which they
called Barça Toons. One spot was created for each match and shown on the TV screen. Another
project put on shows before the matches, such as live music, food tasting, etc.
However, the first measure that most directly affected the economy of the affiliated supporters was
the increase of between 20% and 40% of the price of the affiliation. According to forecasts, this
would give the club an income of €8 million60. A comparative study made by the club's directors
with information from the 2001-2002 season showed that Manchester United received €1,149 for
each seat, Real Madrid received €749, Arsenal received €639 and FC Barcelona received €413.
Joan Laporta:
"An increase in the price of affiliation is possible at the discretion of the directors to
counteract a delicate moment in which the difference between income and expenses
is very great61. Faced with the economic situation of the club, people have to be aware
that the increase all of the affiliation prices of between 20% and 40% is necessary for
the institution, but it is not very pleasant for the chairman of Barça to have to
announce. In any case, we must also point out that compensatory measures are also
being offered, such as seient lliure, where the affiliated supporter can save a
significant amount on his season ticket cost62."
59
Interview with Ferran Soriano (5 July 2004). © Instituto de Empresa.
60
Cadena Ser (25 July 2003).
61
El País (25 July 2003).
62
Canal Barça (30 September 2003).
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