Barcelona chief executive Ferran Reverter said Wednesday the club was "technically bankrupt" when Joan Laporta took over as president in March, and would have been "dissolved" if it was a public limited company.
The Spanish giant's financial woes were laid bare in August when they were forced to allow Lionel Messi to join Paris Saint-Germain after admitting they could no longer afford to keep the six-time world player of the year.
The new board inherited debts of 1.35 billion euros ($1.56 billion) and a bloated first-team payroll as Laporta returned for a second spell as president following the resignation of Josep Maria Bartomeu.
"If the club had been a PLC (public limited company) it would have been dissolved," Reverter revealed during a news conference in which he outlined the results of an audit carried out by accountancy group Deloitte.
"In March 2021, we were in a situation of technical bankruptcy, but as a sports association we were able to refinance the debt," explained Reverter, revealing the club had "difficulties in paying salaries" due to "almost zero cash flow".
To tide the club over in the short term, officials took out a temporary loan of 80 million euros ($92 million) "to cover the treasury obligations for a period of 90 days", and refinanced a debt of 595 million euros.
Barcelona have confirmed losses of 481 million euros for last season, which was even higher than the club anticipated.
According to Reverter, the audit, which studied the club's finances from 2018/19 until March 2021, showed there had been "serious administrative deficiencies" and that directors "bought players by being disconnected from reality".
Bartomeu was forced to resign in October last year following mounting pressure from fans and his public falling-out with Messi over the Argentine's wish to leave the club.
"When they were signing players nobody considered if they could pay for them. The same night that (Antoine) Griezmann was signed, they realised that there was no money for him, and they had to ask for more funds."
Griezmann left to re-join Atletico Madrid on loan at the start of this season.
Between 2016 and 2020, Barca's wage bill soared by 61 percent, rising from 471 million euros to 759 million euros, Reverter added. The total has since been slashed by 155 million by the new management.
Reverter also pointed out the unusually high rates of commissions paid to intermediaries involved in player transfers of "between 20 and 30 percent".
Yet despite the club's financial struggles, Barca hope to finish this season with a profit of five million euros.
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