What is Barcelona's salary limit?
Barcelona, like all clubs in Spain, are constrained by the conditions of the league’s salary cap rules. They have a higher wage bill than every other club in LaLiga.
Every club in LaLiga must comply with the competition’s salary cap rules, sometimes referred to as the Registrable Squad Cost. The salary cap was implemented by current LaLiga president Javier Tebas to provide greater transparency and to make sure that clubs stayed within their own spending budgets. In essence, all clubs who on 1 July, have exceeded the limit on their specific squad costs ( which includes total wages, variables, bonuses, amortisation of player rights, social security and pension payments, compensation for termination of contracts... and so on), will not be able to register any new players for the following season until their expenditure is reduced. The salary limit is calculated by subtracting squad costs from total income - money gained from television rights, sponsorship, competition revenue, club membership fees, publicity, selling players etc.
Barcelona's wages bill sky rocketed
Clubs’ respective wage bills and overall spending varies from one season to the next and obviously not every club will have the same budget. That's why LaLiga introduced the so-called 4x1 rule: for every four euros gained in revenue, only one euro can be spent on the upkeep costs of maintaining a fully registered squad of players. Tebas explained it in simple layman's terms to Onda Cero: “If Barça sell a player for 100 million euros, they can only spend 25 million of that on a new player. If Barça save 10 million euros on paying a player’s wages, they will only be able to dedicate 2.5 million of that towards paying the wages of a new signing; and if Barcelona want to sign a player who had a salary of 25 million euros per season, they would need to reduce their squad spending costs by 100 million - either by selling players or reducing the overall wage bill by that amount”.
By 2019, Barcelona’s first team wage bill had escalated out of control. The mean figure for player’s salaries was just over 10.4 million euros per player, their squad spending limit was 671.4 million. By the time the 2020/21 winter transfer window came around, their total squad spending costs had fallen to just over 347 million. On top of the wages bill and other outstanding debts, Barcelona were heavily affected by the economic knock-on effects of the coronavirus pandemic. Last week, president Joan Laporta revealed that the club had projected losses of around 200 million euros but the actual figure of lost revenue will be between 480 and 500 million.
"We closed last season with substantial losses, but the predictions in terms of revenue are encouraging,” he said before going on to explain that Barça’s current wage bill “represents around 95% of our income and we have exceeded the salary cap even without Messi's contract. The industry recommends that the limit should be around 65-70% so we still have a lot of work to do”.
Messi was reported to be earning somewhere between 35 and 45 million euros, after tax, per season during his final years at Barcelona. But for the club, that would suppose a total layout of 70-90 million euros - as it would include income tax, in Messi’s case, at 45% and on top of that the club would have to pay his social security contributions plus any other add-ons in his contract. Barça have already lightened the load by slashing their squad spending by around 35 million euros by offloading players including Junior Firpo, Trincão, Konrad, Todibo, Aleñá and not renewing Matheus’ contract. Even without managing to strike a new deal with Messi, a free agent, Laporta admitted in his press conference that the club may have to let other players go before Koeman's squad can be strengthened further. It's strange that the true scale of Barcelona's financial problems haven't come to light until fairly recently.