Barcelona's alarming wage cap meaning they cannot register new Messi contract
The Catalan giants had the highest wage bill in football until a year ago but the drastic unravelling of their finances has ensured that it is likely to be just a quarter of that figure for the upcoming campaign.
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Barca’s salary cost limit for the 2019/20 campaign was a whopping £579 million (€671m); by comparison this was £247million more than Manchester United, who had the Premier League ’s highest wage bill for that season (the Red Devils no longer have the highest outgoings).
The economic situation at the Camp Nou means they now must work within a budget of just £138million (€160m) - less than a quarter of the figure from two years ago.
These salary restrictions are imposed by La Liga upon all 42 clubs across the top two divisions of Spanish football - with the budget for each club based on their earnings, revenue streams, profits and losses, overhead costs, investments and debt repayments.
The league places the restriction upon each club based on their audit of the club’s health and finances, in a move to each the growth of clubs sustainable and to ensure outgoings are justified by their income.
Barcelona ’s significant drop off is mirrored - although not to the same alarming extent - by Real Madrid, whose wage budget for the upcoming campaign is set to be £255 million (€300m) - almost double that of their El Clasico rivals.
This represents another notable drop from the 2019-20 campaign, when Madrid’s salary limit was £553 million (€641m) - meaning that over 50 percent of the budget has disappeared in the space of two seasons, in numbers outline by The Athletic.
Yet it is Barcelona’s financial situation that has set all the alarm bells ringing and is presenting themselves multiple problems this summer.
Lionel Messi has technically been a free agent for three weeks as the club cannot yet register his new contract as their outgoings are still - by a distance - above their salary limit, so La Liga will not accept his registration.
This is despite Messi accepting a 50 percent pay cut - although the contract being spread over five years and with the nature of the bonuses and performance-related add-ons, it is higher in reality - and players across the club accepting reduced terms.
The same is true for the trio of signings on free transfers - Sergio Aguero, Eric Garcia and Memphis Depay, alongside Emerson Royal who has been signed from Real Betis following the two club’s co-ownership of the Brazil international.
Last summer, the club cashed-in on sellable assets who were high earners: Arturo Vidal, Ivan Rakitic and Luis Suarez. But now, they are running out of players who they are willing to sell and players who are prepared to accept more wage cuts.
A report from Diario Sport on Wednesday outlined how the club captains met with Barca over a fresh set of wage cutbacks, but no agreement could be reached.
Earlier this year, Catalan media outlet La Vanguardia claimed the club’s situation was “out of control” and the debt was described as “runaway” and they attested that austerity was now the “inescapable destiny” of the club.
As outlined by Football Espana, the club’s current debt stands at over €1billion (€1,173million) with €730m of that sum due in the short term while €266m is owed to the banks by 30 June, of which €90m is owed to Goldman Sachs.
The club’s president Joan Laporta - elected in March to permanently succeed the board of Josep Maria Bartomeu, whose team resigned en mass in October - has since helped restructure elements of that debt and bought more loans to help ease the immediate concerns.
Nonetheless, the situation is drastic and was outlined by Carles Tusquets - the interim president who was in place between Bartomeu’s exit and Laporta’s election - who gave a revealing interview in which he claimed the club should have sold Messi last summer.
The Argentine actively tried to end his Barca contract and whilst the exit of Bartomeu subsequently has changed Messi’s stance on his future, his troublesome new contract is now adding further issues.
Tusquets told Marca: "Economically speaking, last summer I would have sold Messi. It would have been desirable. For what we could have received (in transfer fees) and for what you save (on wages). La Liga demands salary limits."
The interim president also said that the Camp Nou needed urgent funding as it was “falling down” and “pieces of the roof are falling onto the seats.”
The pandemic has cost the Blaugrana an estimated €350m but the problems were pre-existing and were turbocharged by the ramifications of Covid, as they were spending upwards of 70 percent on their income on wages - the desirable amount for a football club is between 40 and 50 percent.
Some low-key exits have been processed this summer - Carles Alena, Junior Firpo and Jean-Clair Todibo have all been sold for combined transfer fees in the region of €28m, while Francisco Trincao has joined Wolves on loan with a €25million option to buy.
Matheus Fernandes has been released but is suing the club over his dismissal while Juan Miranda was paid a significant sum by Barca to leave the club - the Spain Under-21 international has joined Real Betis.
These are minor dents into their budget and significant exits will need to be processed if they are to come close to meeting their slashed expenditure.
Antoine Griezmann is almost certain to leave the club permanently this summer and possibly for a fee that is nominal while Ousmane Dembele - who is out of contract next year - would also be close to an exit but he is injured until October.
Questions may now be raised over the future of first-team stars who the club would in normal circumstances laugh off approaches for from other clubs - goalkeeper Marc-Andre Ter Stegen, midfielders Frenkie de Jong and Pedri and the talented teenage forward Ansu Fati may be among those who elite European clubs are now eyeing up for moves.
The only thing worse than a desperate club is a club who everyone knows are desperate, and for whom any sale will be countenanced - apart from the player who is technically no longer on their books.
Two seasons ago, Barca were La Liga champions and had double the wage budget of Atletico Madrid.
Now, it is Atleti who are champions and who now, remarkably, have a higher salary cap than the Catalan giants.
Barca’s financial headaches are likely to last for many years to come but this summer’s problems are likely to generate all the headlines over the coming weeks.
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