Losing Lionel Messi need not be a catastrophe for Barcelona. It might be an opportunity.
The Catalan soccer team is — by revenue — the richest sports club in the world, wealthier even than the NFL’s Dallas Cowboys.
However, Messi’s reported annual salary of 71 million euros (US$84 million) has a distorting effect on Barca’s cost structure, allowing other — worse — players to seek comparable pay, and dragging overall costs up.
Photo: AFP
The club last year reported net profit representing just 0.5 percent of its 837 million euros in sales.
The exit of Messi, who submitted a transfer request this week, should let it reset salary expectations and allocate its capital more efficiently.
The measly profit is partly because the club is owned by its 142,000 members, which means that it reinvests all of its proceeds into the playing squad. As the club’s income has increased, so have player salaries.
The 44 percent revenue jump from 2017 to last year was matched by a commensurate increase in player wages.
The single biggest sales boost came from a new sponsorship agreement with Nike, which started in 2018. It was reported to be worth at least 155 million euros a season, although it has ended up being quite a bit less after Barca reclaimed some marketing rights.
That deal gave Messi the chance to snag a pay rise of his own.
Bumper contracts followed for other players such as striker Luis Suarez, midfielder Frenkie de Jong and French star Antoine Griezmann.
Barca’s total salary bill now exceeds 485 million euros a year, the highest of any soccer team in the world, but performance on the pitch has not kept up. The team have failed to win the Champions League, Europe’s top club soccer competition, since 2015.
When Liverpool won the tournament last year, their wage bill was just 276 million euros — and they had five more players in their squad.
Because Barcelona’s largess has not brought silverware and prize money, the club has inched toward being unprofitable. Were it not for some transfers, it might have been.
For example, last year it exchanged second-choice goalkeeper Jasper Cillessen for Valencia’s Neto in a straight swap, but because of the way player values are amortized over the duration of their contract, that might have allowed Barca to record an increase in the value of its intangible assets — its players — without actually paying out any extra money. This can translate into an accounting profit at the operating level, even though there is no cash income involved.
Messi has been the talisman for a team who were once deemed the greatest club side ever, and he helped transform Barca into a money-spinning behemoth, but recent years, his pay package has stretched costs for less reward.
Fans might ask how do you replace the irreplaceable, but decline comes to everyone eventually. Now is a good time to hit the reset button.
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