It is the news of the summer in Spanish football. Lionel Messi leaves Barcelona as the culé club cannot fit his contract within his current salary limits. But why has it come to this situation? What factors influence when determining the salaries that LaLiga allows teams to pay?
Sports template cost limit
LaLiga introduced salary caps in 2013, at a time when Spanish football owed more than 700 million euros to the Tax Agency. This measure, together with others such as the centralized sale of television rights, have allowed a certain cleaning up of the balance sheets.
To set the template cost limit For each club, LaLiga takes the expected income for the season in question and deducts its structural costs and debt payments. The teams have to send the employer’s budget for the following season before the end of April, so that it can validate it and set the ceiling. Therefore, they know in advance the limits with which they will have to handle in the summer market.
Once LaLiga calculates the limit, each team has to include the cost of its “inscribable sports team”, that is, the players of the first team, their coach, their second team and the physical trainer; and also that of the “non-inscribable”, athletes from other professional sections together with coaches, runners-up and physical trainers. And here concepts such as salaries, transfer of image rights, the annual amortization of transfers, Social Security contributions, etc. are added.
The setback of Barcelona
Barcelona had a salary limit of 671.4 million assigned in the summer of the 2019/2020 season. In other words, your spending on salaries, amortizations, contributions … could not exceed that figure. In the 2020-21 winter market it had dropped to 347 million, practically half.
In between the pandemic, which has caused the club a loss of income of more than 200 million euros, and a runaway debt. Its short-term liability as of June 30, 2020 was more than 400 million. Factors both that explain a cut that made it urgent to drop ballast and cut wages to meet the limit and be able to register new players.
How to fit in with Messi? The burden of depreciation
Joan Laporta has affirmed this Friday that the salary mass of FC Barcelona with Messi represented 110% of income, and of course, exceeded the salary limit set by LaLiga, although he has not detailed in what proportion. As his contract had expired on June 30, his renewal would have been counted as a signing, so that, as long as Barcelona did not get rid of players and lower salaries, he could not register either him or the four new signings that he has signed. summer.
But both the sale of footballers and the renegotiation to the downside were an arduous task. In the first case, the Amortization, indicated by Laporta as a great burden. In the accounts of the 2019-2020 season, the Catalans dragged a pending expense for this concept of more than 170 million euros.
The ideal way of saving for Barcelona would have been the sale of players with capital gain. The sum of this and the salary saved made it possible to rapidly reduce the wage bill. But in the current market circumstances, and with the salaries that Barcelona footballers receive, it has been an impossible mission.
For example: the club signed the French Antoine Griezmann two years ago for 120 million, with a five-year contract. At an annual depreciation of 24 million, he still has 72 left. If he had sold him for 60, although it seems a significant figure, he would have generated a loss of 12 million, which would subtract the potential savings of his tab, which is around 20 million net.
The same goes for players like, for example, Bosnian Pjanic, which came in for about $ 60 million last summer and for four seasons. Therefore, you have 45 million remaining to be amortized, and again, a sale for a lower amount would subtract the potential savings of your tab, currently unaffordable for most teams. Hence, the club came to offer him the letter of freedom, which he did not accept. The same goes for footballers like Coutinho O Umtiti, with two years still to be amortized.
Another necessary formula was the renegotiation of the footballers’ contracts. Last season, Barcelona deferred the salaries of some of its players by extending the duration of their contracts, so they would receive the same salary, but in more years, with little impact on the cap set by LaLiga. The Real Madrid, for example, it did undertake a 10% cut, which has allowed it to stay within the margins set by LaLiga. Today Laporta has recognized the difficulty of renegotiating downwards with some players who want to keep contracts that are in force.
The 1×4 rule
Faced with the possibility, as has happened to Barcelona, that the impact of the pandemic would reduce its income and therefore its cap on staff spending, LaLiga last season gave the clubs a break. It suspended the sanctions set for cases in which the limit is exceeded, and approved a rule, the so-called 1×4, which even allows them to register signings in a percentage of 25% of what they save with the departure of footballers. That is, if Barcelona obtained savings of 100 million, it could use 25 to register signings. But to date, the outputs have been insufficient.
In addition, as explained above, Messi’s renewal would have been counted as a transfer for registration purposes, so the 1×4 rule should also be followed. And with the salary figures that the Argentine manages, it was a chimera to obtain the necessary savings for his registration. Barcelona proposed a five-year contract in which Messi would only play for the club in the first two. This was not accepted by LaLiga.
Laporta asked the employer more flexibility in recent weeks. And it has slipped that from the same they indicated that the agreement of 2,700 million with CVC solved the problem. “We cannot accept an operation that mortgages certain Barcelona assets for 50 years. Also, those who pay [CVC] They do it for a third of what we think those assets are worth. I cannot mortgage the club 50 years to make decisions today, “he said this Friday.