With Barcelona unable to register the new contract for Lionel Messi nor any of their four summer signings, the Catalan club’s financial crisis has been outlined by their new salary cap
The alarming financial situation at Barcelona has been laid bare by the club’s frightening drop in their wage budget for the upcoming season.
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.
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.