The Spanish Football League has lowered the salary ceiling for its first division clubs by some 700 million euros. Barça and Real, in particular, have been hit hard: their salary ceiling has been almost halved. A departure of Messi seems inevitable, but for Thibaut Courtois and Eden Hazard it will probably have little effect. It is more for future transfers that this will be visible. « Many top-level transfers, in particular, will not take place for this reason, » says sports economist Wim Lagae of the KU Leuven.
The financial sacrifices caused by the coronavirus crisis are forcing the Spanish soccer league to tighten its belt. Liga clubs have to save a total of about 700 million euros on salaries. « Many clubs will have to cut salaries or sell players, » said Javier Tebas, president of the league. « The clubs ended the season with a deficit of 490 million euros. If no public is admitted in the stadiums until the end of the season, this will rise to 707 million euros ». With this drastic measure on the wage bill, La Liga hopes to avoid an economic massacre in its clubs.
Sports economist Wim Lagae of KU Leuven welcomes the Spanish league’s initiative. « They’re turning on the blinkers in time to avoid bankruptcies. A large part of the income from the matches is lost: tickets, merchandising, catering and sponsoring. Then they have to reduce their expenses and it is logical that this happens in the biggest expense item: salaries ».
Ceiling set at 382.71 million euros
Even though such a strict salary ceiling for soccer clubs is completely unheard of in Europe. « We know this mainly because of the United States, but the economic reality forces us to do it. So we can only applaud the fact that the Liga is acting so proactively to avoid an economic massacre. Hopefully, other countries will follow suit, » says Lagae.
It is especially the top Spanish clubs that have been hit hard by this new measure. FC Barcelona, for example, has seen its payroll fall by more than 270 million euros. Whereas last season the Blaugranas were allowed to spend 656.43 million euros on staff and player salaries, the Catalans now have to make do with a ceiling of 382.71 million euros.
An impact for Courtois and Hazard?
Real (-180 million euro) and Atletico Madrid (-95 million euro) also have to reduce their spending. « The higher the level of the club, the greater the impact, » said the president of the Liga, in all clarity. « The big clubs are more often rich. They rely on match receipts, receipts from European competitions and sales to finance their expenses. This is not healthy and that is what this crisis clearly shows », Wim Lagae continued.
Should Thibaut Courtois and Eden Hazard fear that Real Madrid will soon be cutting wages? Maybe not, according to Lagae. « The current contracts are very difficult to revise. New contracts in particular will suffer. The biggest transfers will not take place or will be at much lower amounts than we knew before. Clubs can also make a collective deduction from the salary, as many Belgian clubs did at the beginning of the year, but this is rarely communicated ».
Departures of high-paying alumni
FC Barcelona and Real Madrid want to put the figures back in order by letting their former high earners go at the end of the season. Real has already said goodbye to James and Bale. Modric and maybe Sergio Ramos might follow soon. Barça, for their part, have let Suarez and Vidal go.
This unprecedented crisis could therefore seal the fate of Lionel Messi at FC Barcelona. Indeed, the Argentinian’s salary of 110 million euros per year would no longer be in line with the new rules enacted by the Liga. « The fans won’t be happy, but because of the precarious financial situation, Messi’s departure will now be easier to explain to the fans, » says Wim Lagae.