Messi Split From Barcelona Reveals LaLiga’s Pay Limits

A week ago, a new five-year contract between Barcelona and Lionel Messi seemed like a done deal, with the sides nearing agreement to extend their 20-year relationship and possibly allow the Argentine superstar to finish his career with the club. On Thursday, however, the long-awaited contract signing was canceled, and the club, citing LaLiga regulation, announced that Messi “shall not be staying on at FC Barcelona.”

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The turnabout begs the question of how a player and a team, having agreed to terms, couldn’t execute an agreement. But the situation in Barcelona, with its history, fan base and existing debt load, is never simple.

“Barcelona are bust at the moment, the club is broke, and paying Messi’s salary is just not sustainable for them,” Dr. Stefan Szymanski, co-author of Soccernomics and a professor at the University of Michigan, said in a phone interview. “It seems to me that this is the perfect excuse for Barcelona. They can’t willingly let him go because the fans would be so angry, but if they can blame LaLiga for it, that’s the perfect get-out…. This might be the only way to save the club financially.”

The 34-year-old player became a free agent on July 1, when Barcelona was forced to let his contract expire, though hope remained that he might re-sign at a more team-friendly rate. Barca’s league-high budget of €715 million ($815 million) for the 2019-20 season has been cut in half. In 2020, due to the pandemic, their revenue streams were strained. After a full season without fans and matchday revenue, the Blaugrana are also facing cuts in sponsorship deals.

The result made keeping Messi a challenge. In 2013, LaLiga introduced a set of measures to “ensure responsible spending across all clubs” that applied to all of its 42 clubs from the first and second divisions. The budget for each is based on its earnings, revenue streams, profits and losses, investments and debt repayments. Once this number is determined, clubs go into the transfer season knowing the total amount they can spend on players and coaching staff. While there is a spending cap, LaLiga does not impose a wage cap on players.

The measures taken by LaLiga are made by all regulatory institutions, according to Istanbul-based Galatasaray Football Club Board member Ural Aküzüm. “Barcelona wants to create its own ‘Los Galacticos’ collection of superstars with unlimited money and power, but it is feared that this will affect the value of LaLiga,” Aküzüm said in a phone interview.

In the last 30 years, the LaLiga title has been won by either Barca or Real Madrid 25 times; in the last 20 years of the Champions League, the same 5 teams have reached the quarterfinals of the tournament, Aküzüm said. “Football is meaningful when there is competition and surprising results. A system in which the strong always beat the weak prevents the league from being sustainable. Fans and regulators are uncomfortable with this.”

The Messi shocker comes about 24 hours after another LaLiga bombshell. The league’s executive committee unanimously approved a plan Thursday to create a new holding company, alongside an investment from private equity giant CVC Capital Partners, that will give it access to billions in capital. The plan, which still needs to be approved by the whole league, has already drawn vociferous opposition from Real Madrid.

Michigan’s Szymanski said that more movement may be afoot in the league, which, despite its consistency at the top, is never short on drama. “Two earth shattering events have happened in Spanish soccer in consecutive days,” the professor said, “and while they aren’t directly linked, they’re both representative of the financial crises in Spanish football right now.”