REVEALED: Barcelona’s salary cap limit is slashed by £246MILLION to £85m – just a fraction of Real Madrid’s incredible £638m – while Champions League contenders Valencia have to scrape by on £26m
- Barcelona have seen their salary cap for 2021-22 fall by a further €284.8million
- Ronald Koeman’s side have a €98m cap, just a seventh of what Real Madrid have
- The ramifications of disastrous finances has caused this steep yearly decline
- Peter Lim-owned Valencia have the lowest cap in the league at just €30million
Barcelona’s disastrous finances have been laid bare as they have been given just a €98million (£85m) salary cap by LaLiga for the 2021-22 season – a seventh of Real Madrid’s €739m (£638m) allocation.
The Catalan club’s financial Armageddon has been well documented and was behind their inability to keep hold of their greatest ever player this summer in Lionel Messi, who left on a free to join Paris Saint-Germain.
LaLiga have long held firm on their stance that they would not make special dispensation for Barcelona and that was validated with salary cap figures for all 20 top flight clubs revealed on Wednesday.
Barcelona have been given a salary cap that is just a seventh of what Real Madrid have got
Barcelona will get just £85m for their whole squad while their rivals can use £638m in wages
SALARY CAPS FOR LALIGA CLUBS
REAL MADRID – £638m
SEVILLA – £173m
ATLETICO MADRID – £148m
VILLARREAL – £138m
REAL SOCIEDAD – £110m
ATHLETIC BILBAO – £97m
BARCELONA – £85m
ESPANYOL – £67m
REAL BETIS – £61m
CELTA VIGO – £57m
GETAFE – £56m
OSASUNA – £49m
GRANADA – £46m
REAL MALLORCA – £40m
CADIZ – £39m
ALAVES – £37m
RAYO VALLECANO – £36m
ELCHE – £36m
LEVANTE – £28m
VALENCIA – £26m
Barcelona’s £85m cap for their entire playing squad is a major drop-off from what they were afforded just two years ago.
In the 2018-19 season the Catalan side had a salary cap of €671m (£580m), which was slashed to €382.7m (£331m), a fall of €288.3m (£249m).
But a further squeeze on Barcelona’s finances, exacerbated by the pandemic but due to unsustainable wage to turnover ratios, has seen that figure now fall to the £85m they have this season.
Debts are believed to have totalled more than £1.1billion at the Nou Camp in recent seasons, leaving Barcelona in the unthinkable scenario of having a squeezed cap that leaves them behind no less than six teams.
Spending breaches and the huge level of debt has seen LaLiga tighten the belt around the club’s waste to prevent any further financial mismanagement.
Defending champions Atletico Madrid have a more modest £148m compared to Real Madrid
HOW DOES LALIGA’S SALARY CAP WORK?
LaLiga introduced a salary cap back in 2013 in a bid to place more control on keeping member clubs away from major debts and repayments.
The salary limit for each team – they are individually worked out every season – is calculated by subtracting squad costs (fees, wages, bonuses, pension contributions) from total income generated.
That income is calculated from TV rights, sponsorship, money earned from LaLiga, club membership fees, publicity, and selling players.
In 24 months Barcelona have seen a drop of €288.3m (£249m) followed by a further drop of €284.8m (£246m) this season.
It goes a way to explain why Barcelona found themselves so desperate to move on high earners in the summer.
Club president Joan Laporta explained earlier in the summer to reporters that Barca’s wage bill with Messi on the books would equal 110 per cent of their income.
Even when Messi departed for the Parc des Princes, the wage bill remained at an untenable 95 per cent.
Antoine Griezmann was sent back to Atletico Madrid, Messi left for PSG and Miralem Pjanic has gone on loan to Besiktas.
The gap in salary cap limits is staggering with Real Madrid far and away afforded a major advantage over rivals.
Carlo Ancelotti’s side have a budget that is three and a half times greater than the next best team.
Real Madrid are so financially sound emerging from the pandemic that they added £252m of their own funds to extend their cap – allowing for the potential of a blockbuster deal with Kylian Mbappe.
‘Not a miracle, but a great job of financial management during the pandemic,’ corporate director at LaLiga Jose Guerra said upon presentation of the caps.
‘Real Madrid has managed it brilliantly. If we add the results obtained in 19-20 and 20-21 I think I remember that they achieved a profit of one million euros or more and avoided losses.
‘There are no secrets: player transfers, salary cuts… You have all seen what they have been doing and that has enabled them to reach the good situation they are in.’
Sevilla, who are second only to Real Madrid, have been given a cap of £173m.
Valencia, who are owned and run by Peter Lim, who also has a controlling stake in League Two Salford City, have the league’s lowest budget with just £26m.
Sevilla are second in the salary cap table but are still three and a half times smaller than Real
‘Covid hit them like the perfect storm,’ Guerra added when quizzed on Valencia’s total. ‘It affected them more than almost everyone.’
LaLiga first brought in a salary cap in 2013, with the belief that the league needed to protect the long-term financial health of its clubs.
It was believed that too many clubs – examples that have been cited by the league bosses include Deportivo La Coruna and Racing Santander – between the first and second divisions were putting themselves at risk with limited protections across their finances.
Clubs across Spain’s top two divisions suffered losses of €2billion (£1.73bn) for both the 2019-20 season and 2020-21 season due to the impact of the Covid-19 pandemic.
Barcelona breached their reduced salary limit last season and LaLiga have previously stated that they will not tolerate a further breach.
Back in November 2020, LaLiga president Javier Tebas said on the topic of the salary cap: ‘It’s important we all understand that it will be difficult for new players to be joining the clubs.
Peter Lim-owned Valencia have the smallest cap in LaLiga with just £26m allocated for 2021-22
Barcelona president Joan Laporta warned in the summer that the wage bill maxed the revenue
‘They are now looking to reduce costs. Some clubs will have to sell players or reduce their salaries. There’s no other choice.’
The salary cap works on the understanding that each club is given a different cap depending on the revenue and spending that occurred during the previous season.
The model is popular in American sports leagues such as the National Football League (NFL) and the National Basketball Association (NBA) but is less common across Europe’s major leagues.
Major clubs such as Real Madrid and Barcelona have typically been able to spend significantly more than smaller clubs because they generate more money.
But with Barcelona reliant on football tourism – stadium tours are huge for Barcelona – and that severely restricted amid the pandemic, revenue has plummeted at the Nou Camp.
Barcelona’s plight was laid bare during the summer when arrivals Memphis Depay, Emerson, Sergio Aguero and Eric Garcia were overshadowed by the fact the club were unable to register them without exceeding their salary cap.
Not until big earners were moved on were Barcelona able to register their new signings with LaLiga.
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