LaLiga cuts the salary limit of Barcelona, Atlético and Sevilla

LaLiga has updated the salary cap for each team in the Primera Division. Real Madrid remains the leader in this category with a maximum of 683.46 million euros (€1 = $1.07 at time of writing). Barcelona, on the other hand, will have to tighten its belt next season, but is still benefitting from last summer’s activities and has a capacity of 648.82 million euros, a little lower than the limit established at the beginning of the season.

What are the salary caps for Real Madrid, Barça, Atlético...?

Top flight clubs can spend a maximum of 3.022 billion euros on their players’ salaries during the current season. This has decreased compared to the figure announced at the beginning of the season, which was set at 3.052 billion euros. The variations have been minimal, as they are related to player transfers during the winter market and some new sponsorships.

As can be seen in the table below, Real Madrid have the most available money for player salaries (683.462 million euros). Barcelona is second with a cap of 648.82 million euros, down from the 656.43 million euros it had in the summer. Their elimination from the Champions League is one of the reasons for the drop of almost eight million, but it is the least of their problems right now. LaLiga has already warned Barcelona that they will have to tighten their belts by around 200 million euros next summer to avoid exceeding their limit. In other words, they will have to increase their income or reduce their expenses to avoid this situation.

The clubs that have fallen out of the Champions League, such as Barcelona, and other big clubs like Atlético and Sevilla, have taken the biggest hit. Diego Simeone’s team remains in third place in this ranking with 315 million euros, but with a notable decrease compared to the 341.04 million euros it had in the summer. In other words, being eliminated from all European competitions from the outset has led them to reduce their limit by more than 25 million euros. The largest decrease in a club in this update has been experienced by Sevilla, which goes from having almost 200 million euros to a cap of 191 million euros.

Although the total limit has decreased, more teams have managed to increase it slightly (Betis, Cádiz, Mallorca, Valencia, Celta, Rayo, Valladolid, Girona and Almería) than those that have decreased it (Barcelona, Espanyol, Atlético, Sevilla and Getafe). Elche, with a salary cap of 42.67 million euros, is the team that can spend the least on its players’ salaries. They are followed by Girona (43.47 million euros) and Cádiz (46.97 million euros).

What is the salary cap, who calculates it and how?

The Límite de Coste de Plantilla Deportiva (Sports Team Cost Limit) is the concept that sets the maximum amount that each Spanish team can spend on salaries for players, coach, assistant coach, and physical trainer (i.e. the registered team), as well as on the reserve team, academy, and other club sections (unregistered team). It is the main pillar of the financial controls to ensure that clubs are solvent.

The registered team includes fixed and variable salary remunerations (whether payments in cash or in kind such as a house, a car, a holiday...), remunerations for transfers of image rights, the amortization of signings, social security contributions, indemnities for contract termination, collective bonuses, acquisition expenses as having to pay bonuses to representatives.

The calculation of the salary cap is based on the difference between a team’s income (including television rights, advertising, and ticket sales) and their structural expenses and expected debt repayment for the season. Each team creates its own salary limit, which must comply with LaLiga Economic Control rules and be approved by the validation body. Although teams can set a limit below their ceiling, this body will reduce the limit if it doesn’t ensure the club’s stability.

The salary caps are determined by objective mathematical formulas, without any subjective input. If a team exceeds its salary cap at the end of the season, they must correct this by saving money through the 40% rule. In other words, new player registration is only possible using 40% of the income from selling or terminating another player’s contract.