As the (absence of) ink begins to dry on the heads of soccer fans around the world over the fact that Lionel Messi is leaving Barcelona, it is now clear why this situation arose. Barcelona simply did not have the financial margin to register their best player for next season under La Liga rules.
WHY BARCELONA CANNOT REGISTER MESSI
With the new contract proposed by Lionel Messi with a 50% pay cut, Barcelona’s salary / income ratio would have been 115%. Without his salary he would be at 95%. Under La Liga rules, the salary-to-income ratio cannot be higher than 70% for a club, which shows that the absurd suggestion that Lionel Messi show his love for Barcelona by playing free for them is simply not possible.
Unrepeatable 🐐 pic.twitter.com/xpWRDlHyCq
– FC Barcelona (@FCBarcelona) August 8, 2021
Barcelona is clearly in a transition phase on and off the pitch. Regardless of how heartbreaking the decision is, letting Messi go is the right thing to do for the club. President Joan Laporta affirms that they have plans to clean up the mess but for that it is pertinent to ask how we got here.
GIFTS FROM BARTOMEU
Before Laporta, the president of Barcelona was Josep Bartomeu and it would not be an exaggeration to say that he and his board are largely the cooks of the broth in which the club is located. The first year of his tenure, which began in 2014, could hardly have been better. Barcelona won the triplet powered by the MSN trio and off the field their operating loss (excluding sales and player interest) was just € 1 million.
– FootTheBall (@FootTheBall) August 5, 2021
The next two seasons they managed to maintain their dominance at the national level but suffered on the continental stage. Its finances also improved, obtaining an operating profit of 1 million and 9 million in 2016 and 2017 respectively. And then Neymar left.
His sale of approximately € 220 million brought with it a windfall for the club, but left a huge hole in the field that simply could not be filled. His purchases of Phillippe Coutinho, Ousmane Dembele and Antoine Griezmann far exceeded the amount Barcelona received. In fact, his net expense since Neymar’s departure is 393 million euros.
They have not been able to advance in transfers that did not work like Coutinho or those who stayed beyond their welcome like Samuel Umtiti, which is reflected in the drop in income from player sales. In the graph above, you can see the divergence in player sales and purchases, despite which success on the field has only grown further.
THE REAL PROBLEM
However, this is only part of the problem. Transfers, to a large extent, can be amortized and covered by some loans, and losses can be recouped over the years. In fact, most of the recent purchases from the Barcelona transfer market have been on credit.
Therefore, the problem is not only that incorrect transfers have been made. The fact that they have not been reversed is the most pressing concern. The side effect, and crucial here for Messi, is that the players on the books have spectacular salaries that the club cannot afford.
As seen below, Barcelona’s sports salary bill jumped from € 340 million to € 487 in just one year (2014-15 figure includes players’ depreciation cost). Since they have not been able to sell dead wood, their wage bill has not decreased. The lowest figure for the 2019-20 season is still a 30% increase in three years.
Pre-covid, this was concerning but not catastrophic. However, the revenue collapse following the impact of the pandemic has left the club struggling to pay the bills. Its revenue fell from € 990 million to € 855 million and all departments – media (broadcast), stadium (match day) and marketing (commercial) took a hit as seen below.
Only Manchester United’s revenue fell the most among the 12 ‘Super League’ clubs and that was mainly due to the reduction in streaming revenue caused by their participation in the Europa League.
However, the actual situation is expected to be much worse than what is seen on paper because a large chunk of player salaries were delayed in 2020 in the immediate aftermath of the pandemic, according to reports. The fact that Barcelona is owned by the members, rather than a corporation or wealthy person, makes it more difficult for the club to absorb losses.
ACCUMULATION FOR THE DEPARTURE OF MESSI
For Barcelona it was clear that to stay with Lionel Messi they would have to make big savings. They were further hurt by the Copa América in the summer, which meant a delay in negotiations that led to their contract being exhausted at the end of June.
2/6 ↕️ pic.twitter.com/Q5jchriYIe
– FC Barcelona (@FCBarcelona) July 18, 2021
This was crucial as it gave him free agent status. According to Spanish regulations, the salary on his new contract could not be less than 50% of his previous contract, a cut that he had accepted but still not enough.
In addition, Barcelona signed more free agents in Eric García, Sergio Agüero and Memphis Depay and question marks remain about their registration status. The club is working to get players to accept pay cuts as Gerard Piqué has reportedly already agreed and other senior players such as Sergio Busquets and Jordi Alba have set out to do the same.
The president of Barça, Laporta: “According to our calculations, we can register Memphis Depay, Eric García and Kun Agüero. I hope there are no problems, also because these players made an effort to join Barça ”. 🔴 #FCB #Barça
– Fabrizio Romano (@FabrizioRomano) August 6, 2021
Laporta and company. It was also considered to unilaterally terminate the contracts of the players that it did not need, but without wrongdoing on the part of those players, it would leave the club susceptible to legal charges that would be difficult (and costly) to defend against.
IS BARCELONA THE ONLY CLUB THAT FIGHTES?
The years of waste of Barcelona in terms of both the transfer market and the delivery of extraordinary contracts has reached them. However, they are far from the only ones fighting. Real Madrid’s fierce rivals had to let go of their own captain Sergio Ramos while they too sold Raphael Varane to Manchester United for a reduced price.
Italian champions Inter Milan face the threat of liquidation and have sold Achraf Hakimi and Romelu Lukaku in a bid to stay afloat. AC Milan and Juventus cannot spend a lot on players.
– Didier Drogba (@didierdrogba) August 8, 2021
Man City and Chelsea benefit from having billionaire owners ready to fund all the whims and fancies of their managers. Tottenham Hotspur had to take out a loan to soften the blow of the pandemic, while Arsenal have been slipping away for some time and still are. Manchester United benefits from having an extremely strong business side, but even that shows signs of slowing down, while Liverpool are negotiating hard in their contract talks and not looking to spend much in the foreseeable future.
In short, the decline of the big clubs over the last decade or more has been exposed by the pandemic and almost all of them are struggling. Some have done it better than others, while others have the resources to do it. One thing is clear: the Super League was more of a hail than a blow. The big clubs cannot afford to go back to their old ways in the long run.
You can’t keep football going in this “MORE MORE MORE”. On salaries, seasonal games, transfer fees, and more.
The Super League was a cowardly way of trying to fix football’s rampant hyper-capitalism with more hyper-capitalism, but a restart is needed. Somehow.
– Carl Anka (@ Ankaman616) August 6, 2021
However, for Barcelona it is unfortunate that they are trapped with a barrage of dead players and the cost of their survival becomes the departure of their favorite son. It’s a revealing moment in the history of the sport and fans can only hope the lessons have been learned.