Ferran Torres has joined Barcelona, but how is the club working around debt?

“We’re back!”

Joan Laporta was in a bullish mood, which is the mood he’s in most days, but especially on days like this. It was the first day of the rest of their lives, a sunny morning in the city. Up in the stands at the Camp Nou were 13,513 people, optimism returning. On the pitch below them, the Barcelona president, who started singing when he was last down there presenting Dani Alves and Xavi Hernandez, was beaming, ready to take on the world. Or so he said.

This was a big deal. Ferran Torres had just joined Barcelona for a transfer fee of €55 million, plus €10m in add-ons. Aged 21 and long seen as the country’s outstanding player of his age group, he’d come from Manchester City, no less. Destined, some said, to lead Spain‘s forward line for the next decade, Torres has already scored 12 international goals, including a hat-trick against Germany, at a rate better than a goal every other game. His salary is understood to be structured to reach something the region of €12.5m per year.

It wasn’t the first big signing of Laporta’s second spell at the club, but it felt like it. And it wouldn’t be the last.

That’s what Laporta said, anyway.

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If Torres’ arrival suggested a shift, a signing they could genuinely get excited about — a properly good player they’d persuaded to join and who you could still see there in 10 years’ time — then Laporta’s words shouted about it. So much so that when he was asked about the arrival that would be transformative, the player everyone wants, the signing that would say look at us and guarantee that everyone did just that, he didn’t back down. Could Erling Haaland join too? “Everything’s possible,” Laporta said.

If that sounds a little noncommittal, he didn’t say no, which was entirely deliberate. What he did say was this: “We’re still players in the market. Everyone had better get ready because we’re back, and with the desire to do good things. We’ve got our status back. The resurgence of Barcelona is a reality.”

That might depend on how you define “resurgence,” when it becomes a reality.

You know all this by now, so let’s get through it quickly: Barcelona are over €1.35 billion in debt; they lost €481m last year alone; they were forced to let Lionel Messi go and for free; and this season their salary-cap space, their budget, in other words, is €97.7m. That’s an eighth the size of Real Madrid‘s and lower than Real Sociedad‘s, Athletic Club’s and Villarreal‘s. Let’s not even look at England, where a team like Watford has as much muscle. And so the inevitable, recurring question was asked: How? How could they sign Haaland?

In fact, never mind Haaland, how could they sign Torres?

The short answer is: They can’t. Not really. Not yet.

Everything’s possible, Laporta had said, but at the moment not everything is possible. And that includes registering Torres. By Sunday it should be, said the club’s director of football, Mateu Alemany. Torres has tested positive for COVID-19 and is recovering from an injury, so it may not need to be that fast, but either way the answer is: soon. That is what they hope, at least. And there is a plan. The problem is that hopes have a horrible habit of not being fulfilled and the best-laid plans gang aft agley and all that.

If Torres was fit and there was a league game tomorrow, Barcelona would not be able to play him. And so, to return to the question: How did Barcelona manage to sign Ferran Torres?

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There are two parts to the answer. The first is the cost of the signing itself, and that’s easily explained. Barcelona won’t pay much of the fee up front, the salary is spread across his contract, and the club have taken a €600m loan from Goldman Sachs, the same bank that will provide a further €1.5bn for the redevelopment of Barcelona’s new stadium.

So where does the money come from? That’s where. In footballing terms, meanwhile, they believe this is a signing that they cannot really afford not to do, even if his value has effectively doubled since he went to England.

That’s the first part — actually signing him — and it’s quite simple. The second part — registering him so he can actually play — is the league’s salary limit criteria.

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To review, there are two different things, conceptually and practically: There’s having the money to do it, and there’s fulfilling the criteria to be able to do it now. The salary limit part is more complex — on some levels, anyway. On others, it’s very simple, and very rigid: If you do not comply with the rules, you will not be able to register your player. End of story. It’s an automated system, and that button you want to click on will not be clickable.

Barcelona’s permitted salary limit is €97.7m calculated on the basis of what they spend and generate. It’s not that they are right at the limit; they’re miles over it, with the actual amount spent on salaries over €400m. This tends to lead people to suggest that the rules are pointless as they bemoan another big club just ignoring financial fair play. The questions are inevitable: What’s the point if they can still sign players? What’s the point if they can be at four times their permitted salary limit without it having any tangible impact?

First, it’s not without consequence; these are not rules simply ignored and unenforced, nor are financial difficulties long term entirely ignored. Not now, anyway. In the summer, you may remember, they lost the best player in their entire history — someone named Lionel Messi — for free. Whatever other elements were at play, everyone can surely agree that’s quite a big impact. Antoine Griezmann left too, also for free. (For now, at least: There is a €40m purchase clause applicable a year on.) The summer before, Luis Suarez left for free — and won the league at Atletico Madrid. Gerard Pique and Sergio Busquets took pay cuts. Without Pique’s drop, Memphis Depay wouldn’t have been able to play the opening game of the 2021-22 season.

The limits shift with each season too. Last year, Barcelona’s limit was €382m, and next year, with the impact of the pandemic lessening, it will likely climb again, although it is inconceivable that it will reach the level of their actual expenditure on salaries unless that continues to drop. (While you could theoretically just sit on the same squad and change nothing, any new contract would break those rules — in other words, you couldn’t renew anyone — and to be able to invest anything, you have to comply with the salary limit.) In Barcelona’s case, that means bringing the total under €97.7m.

This last bit is impossible. You can’t even give some players away to shed their salaries — not if they don’t want to go. Unilateral terminations risk a court case, which could cost more than it would save. Because of that, and because of the pandemic and its impact on those limits, creating a kind of negative equity in which you couldn’t even pay for the squad by getting rid of the whole squad, there is another way out. You can be over the limit and still invest, but only with evidence that you are addressing the shortfall and how much you invest is capped at a ratio of 1:4. That is to say, for every €1 a club wants to invest in their squad, they have to have made €4 in savings.

Usually, a combination of savings go towards any investment, of course, but to put that in very simplistic terms: If you’re over your limit, you can’t sign a player on €1m a year by getting rid of a player on €1m a year, keeping the level the same; you would have to get rid of a player on €4m a year. If it’s a very expensive player, the margin grows: If you can move on a player who accounts for more than 5% of your limit, you can reinvest at a ratio of 1 to 2, meaning a €10m player gives €5m of margin.

Barcelona currently have no margin to register Torres, and finding that is their immediate task. (Long-term plans are a different issue, which is why some costs are postponed until then: By the summer, €40m could be incoming for Griezmann, for example, and other necessary sales may become possible.) It is not an easy one, but nor is it an impossible one. While Laporta was his usual bullish and enthusiastic self, his director of football Alemany was calm, clear and concise — it is that personality, along with his competence, that increases the optimism that this could just work.

Alemany had already said that before anyone could arrive, players had to leave. Now they had signed Torres despite no one going yet. “The reality is that when we signed Ferran, we knew that we didn’t have any margin with the salary limit,” he admitted on Monday. “We made an exception with Ferran because it was worth it. We accept that and we’re working on various avenues.”

“If we can generate ‘fair play’ [margins], we will decide if there are other signings; [the latter] will depend on exits,” Alemany added. For all the desire to seek other arrivals — Alvaro Morata foremost among them — registering the one player they actually have signed has to come first. If they succeed in doing that, then and only then will they look at other potential signings.

Those avenues are varied, creative and often time-sensitive. Some are walked more willingly than others. In many cases, solutions are ultra short-term and mean shifting costs further down the road to a time, they hope, when they will be easier to assimilate and fit within financial regulations — a time when there may be money incoming. At that point, some of the plans made this summer will likely be picked apart: Memphis Depay, Sergino Dest and Luuk de Jong are all players lined up to depart within a year of arriving, itself an indication that some solutions don’t solve anything. And so they work, hands partly tied.

A useful indication of how fine the margins are, and how delicately balanced it all is, is shown by the fact that Yusuf Demir is no longer playing games — if he makes one more appearance, Barcelona would have to exercise a €10m purchase option — and even more clearly by a comment made by Xavi Hernández this week.

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Craig Burley reacts to Barcelona’s narrow win at Mallorca after Xavi is forced to call up eight players from Barca B.

In the midst of negotiations over a new contract for Ousmane Dembele, Barcelona’s manager was asked his opinion. He replied that the Frenchman was important, a player he wanted to continue at the club. That was nothing new — he has said before that Dembele could be the world’s best in his position — but what was new was just how important, and why. “If Ousmane renews, it will allow us to make one or two signings,” he said.

Stop a moment and read that again. This is not there will be savings if Dembele leaves — which there would be, of course — but there will be savings if he stays. At least in the short term. In other words, Barcelona’s plan — well, their offer — involves him reducing his salary or at least spreading what he is earning now over the coming years, loading some of it into the back end of his contract. In the simplest terms, it means this: They depend on him. Put bluntly, it appears he has the upper hand.

Dembele has not agreed a renewal yet, and it is starting to look like he might not. The demands are greater than the offer, and patience is running out. So is time. “We have been talking to his agent for five months,” Alemany admitted, the frustration clear. “We have been very patient. They knew we want him to stay and he has our offer. We can’t delay much longer. We are waiting for a definitive answer so that we can take the decisions that are convenient for the club.”

There have been suggestions that he would be banished to the stands to put pressure on him to renew or leave now, maybe even get a fee for him, but for Dembele, there’s little to be gained by going now, which brings us back to a familiar place: Savings can be made, but they are not simple.

Sergio Aguero‘s retirement allowed Dani Alves to register, for example, while renewing Sergi Roberto in order to defer some of his salary remains another option illustrating how immediate Barcelona’s issues are. As Alemany said, it depends on the players who leave, but the fact that that’s not easy has been repeatedly demonstrated before. Just sell an expensive player, people say. Go on, then, try it. Samuel Umtiti is in no hurry to go. They have been trying to sell Philippe Coutinho for two years. As the World Cup approaches, and yet another manager sees little place for him, it appears he may be willing to depart.

“We’re working on it, and we’re convinced we’ll be able to register [Torres] before Sunday,” Alemany said. There is a player and there is a plan. Something has to happen, and soon, or the one signing they actually made, the man whose arrival announced their return, won’t actually be able to set foot on the pitch.

“I’m calm; I know I’ll be able to register,” Ferran said.