Spanish football giant FC Barcelona has reported a strong profit for its latest financial year, months after it installed Grant Thornton as its new auditor. The firm took over from EY, shortly after the Big Four auditor warned of ‘a hole’ in the football club’s finances worth hundreds of millions of euros.
After a period of financial turmoil, FC Barcelona has reported a €98 million profit for its last financial year. Looking ahead, the club contends it will kick on to even greater heights, too, suggesting it could make a €274 million profit next year.
The news suggests a dramatic turnaround in the fortunes of the historic Catalan club. Earlier in the summer, it was barred from registering new players due to La Liga financial regulations – as it had posted losses of €481 million during the 2020-21 season.
In a remarkably timely fashion, however, the club found ‘economic levers’ which freed up funding to register the likes of Raphinha and Robert Lewandowksi in time for the new season.
The measures included selling shares of their future television rights and their media production unit Barca Studios. In August, the club sold an additional 25% of Barca Studios to Orpheus Media for €100 million, in a move expected to generate enough revenue to satisfy La Liga and allow Barca to get their player registrations over the line. The deal eventually placated La Liga, having been cleared by the club’s auditor, Grant Thornton.
The firm took on the role of Barca’s auditor from July 2022 and was installed after the club ended its relationship with Big Four firm EY.
Reports from Spanish paper El Confidencial suggest at the end of the previous season EY had warned Barca of “a patrimonial hole of €451 million.” Months later, the club’s board of directors determined Grant Thornton would review the balance sheets and the club’s accounts instead – including the last minute manoeuvre to prevent resounding losses.
Grant Thornton is one of the largest audit and advisory firms outside of the Big Four of EY, KPMG, Deloitte and PwC. The firm has been one of the beneficiaries of a shift away from the quartet in recent years, following the collapse of a number of clients following accounting discrepancies.
Mid-tier firms such as Grant Thornton have also been implicated in similar scandals, though. The professional services firm held the contract of auditor for Patisserie Valerie for 12 years, before an “accounting black hole” was uncovered in late 2018. The firm recently struck a multi-million-pound settlement for the resulting court case.
Sourced from Consultancy.eu