September 29, 2021

CSGO

Next Level Game Over

Lionel Messi, why is he leaving Barcelona, finances explained, salary cap, La Liga, how much will PSG make


Barcelona were desperate to keep Lionel Messi and the Argentine wanted to stay at the Camp Nou — as his tears at a farewell press conference attested.

So why, then, is he leaving the only club he has ever represented in his 17-year professional career?

LA LIGA SALARY CAP

Barcelona say they had no choice other than to offload the 34-year-old — on a free transfer with his contract having ended in June — as they battle to slash a 1.2 billion-euro ($A1.9 billion) debt mountain.

Messi had agreed to take a 50 percent wage cut, and studies suggested his commercial value to the club far exceeded the astronomical cost of his salary.

However, those debts and the need to comply with a strict Spanish league salary cap have forced Messi out.

The Catalans squandered the 222 million euros they received from PSG in 2017 for Neymar by committing fees of over 100 million euros each on the likes of Philippe Coutinho, Antoine Griezmann and Ousname Dembele.

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BOLD BID: Distraught Barca fan takes legal action to stop Messi move

President Joan Laporta admitted that losses for last season alone totalled almost 500 million euros and insisted he could not “mortgage” the club’s future for any player, Messi included.

Clubs in Spain’s top two divisions suffered a loss of earnings totalling 2.013 billion euros ($A3.2 billion) for the 2019-20 and 2020-21 seasons due to the impact of the coronavirus pandemic.

La Liga rules say no Spanish club can go over a totally salary limit which the league itself has set: in Barca’s case that was 348 million euros for last season, down from 671.4 million euros in the previous term.

Barca went over that reduced limit last season and now La Liga will not tolerate a further lapse.

Laporta admitted that Barca’s wage bill with Messi would amount to 110 percent of income. Even with him it would have been too high, at an untenable 95 percent.

NO NEW SIGNINGS ALLOWED, INCLUDING MESSI

Some have asked why Messi, if he loved the club so much, couldn’t stay and play for free.

Ignoring the fact that it is ludicrous to think the best player in the world could or should agree to that, it would have been impossible.

Without being in line with the salary cap rules, Barcelona are not allowed to register any new signings. With Messi’s previous deal having expired in June, he would have been considered a new signing.

That also raises questions about the summer signings the club had already announced, with Memphis Depay, Sergio Aguero and Eric Garcia having already been recruited on free transfers and Emerson Royal arriving from Real Betis.

Some may ask why La Liga could not be more flexible, given the receipts Messi pulls in while he is a huge global draw for the Spanish game.

UEFA has already relaxed its own financial fair play rules to help clubs affected by the pandemic, but the Spanish league is standing its ground.

Messi’s Barcelona departure EXPLAINED | 01:57

WHY IT WORKS FOR PSG

Barcelona could not afford to keep Lionel Messi but Paris Saint-Germain have made their move for the 34-year-old and, while the cost of the deal may be astronomical, it is still likely to be a very smart bit of business if or when it goes through.

Barca — swimming in debt of 1.2 billion euros ($A1.9 billion) — ultimately found themselves in a no-win situation with their talisman.

Keeping him would have maintained salaries at an untenable 110 percent of revenue.

Even letting him go leaves that figure at 95 percent with the Catalan club a prime example of how living beyond one’s means eventually ends in the tears Messi shed Sunday in confirming his departure, Barca unable to defy financial gravity any longer.

An annual salary north of 70 million euros ($A112 million) net per season, while breaking Spanish league salary cap requirements, was a price that made sense for Barcelona.

Marc Ciria, director general of Diagonal Inversiones consultancy, recently calculated Messi generated some 235 million euros more than he earned over the past four years.

Qatari-owned PSG, who bought Messi’s close friend Neymar from Barcelona for 222 million euros in 2017, can afford the Argentinian wizard, who they see as the final piece in the jigsaw to land a first Champions League crown.

Messi breaks down in Barca farewell | 01:05

Messi, who had agreed to a 50 percent wage cut with Barcelona and a five-year deal taking him to the age of 39, is reputedly being offered some 40 million euros a year ($A62) over two seasons in Paris with the possibility of a third.

Neymar, whose transfer will ultimately cost PSG more than 500 million euros wages included, earns an after-tax salary of 30 million euros annually according to documents released in 2018 by Football Leaks.

Messi, nicknamed “La Pulga” (the flea), boosts overall annual earnings to around 110 million ($A176 million) euros thanks to lucrative sponsorships with the likes of Pepsi and Adidas, ahead of the likes of long-time La Liga rival Cristiano Ronaldo, LeBron James or Roger Federer.

“We’re on another planet here — it’s stratospheric” with Messi, says sports marketing analyst Virgile Caillet, adding a putative arrival at the Parc des Princes would constitute “an event such as (has happened) only once or twice in football — with (Diego) Maradona when he signed for Napoli or (Zinedine) Zidane going to Real.”

Paris Saint-Germain’s already boast stars like Neymar (L) and Kylian Mbappe.Source: AFP

PSG have essentially taken over the Real Madrid mantle of the home for “galacticos” — megastars whose global status lifts their clubs to another level.

Although the pandemic knocked a 125 million-euro dent in PSG’s finances across 2019-20 alone, the club’s ownership by Qatar Sports Investments (QSI) means their pockets are deep enough to close a deal.

The recent relaxation of UEFA’s financial fair play rules because of the pandemic helps too.

“That leaves more margin than previously,” says Christophe Lepetit, director of France’s Centre for the Law and Economics of Sport in Limoges.

Getting Messi aboard would mean PSG “developing new marketing approaches. That dovetails perfectly with the PSG strategy,” says Caillet.

“Messi is a cast-iron guarantee. From the moment you recruit him you have a number of additional revenue streams which flow almost automatically: derivative merchandise, ticketing, partnerships. It’s an unmissable opportunity.” A further plus compared with the 400 million euros shelled out in 2017 to buy Neymar and Kylian Mbappe is the fact PSG don’t have to pay a transfer fee for the out-of-contract Messi.

“In terms of amortisation (costs) there is just the salary — I’d say that makes it much more affordable,” smiled Caillet.

Barcelona’s Argentinian forward Lionel Messi cries during a press conference at the Camp Nou stadium.Source: AFP

A decade into their ownership of PSG, QSI have pushed a policy of capturing big names — even those in the twilight of their careers, notably David Beckham and Zlatan Ibrahimovic.

PSG are the seventh-richest club in the world according to the most recent Deloitte Football Money League, still trailing the likes of Barca, Real Madrid, Bayern Munich and Manchester United.

For Caillet, Messi will lift them to even greater heights on and off the pitch. “A second stage was needed for the PSG rocket. Messi will bring an acceleration,” says Caillet.

“It seems paradoxical given his age — but Messi incarnates PSG’s future both economically and in sporting terms,” says Caillet as “his arrival brings together three iconic brands — Paris, Jordan (PSG’s kit manufacturer) and Messi.”



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