“Today, everyone knows what the problem is,” said Ronald Koeman, which was asking for it really. The “insert your own joke here” thing was just too easy, the response far too obvious. Yes, Ronald: it’s you. Barcelona had been beaten again, this time by Benfica in Lisbon, leaving them with a Champions League record that reads: played two, lost two, goals scored none, goals conceded six. They really might not get out the group.
“A critical situation,” Sergio Busquets called it.
The kind of critical situation that gets a coach the sack, but also the kind that’s too critical for just that. Asked if getting rid of Koeman would fix things, Frenkie de Jong gave a one-word reply: “no.” And while there is self-interest, self-preservation too — if he even wants to carry on with this anymore — in the Barcelona manager repeating that line about being realistic, there’s a truth there too.
Today, he had said as if he hadn’t been saying so for weeks, and that very morning, LaLiga revealed the salary limits imposed on Spanish clubs this season. The amount, in other words, a club can spend on the costs of the footballing side of its business, across transfer fees, salaries, and so on, if they wish to sign players. The fundamental basis, sadly, upon which any club is built.
Real Madrid‘s limit for 2021-22 is €739.12m.
Barcelona’s is €97.92m.
Let’s just say that again: Ninety-seven. Seven hundred and thirty-nine.
That Barcelona are in crisis is no surprise, even though some like to say it’s not really a crisis, accusing the rest of hamming it up. Well, they are on the edge of getting knocked out of the Champions League — which they absolutely can’t afford to happen — and were forced to push their best ever player out of the club*… and then get rid of their next best forward as well, for free. Which sounds quite crisisy.
They’re effectively bankrupt and there is a reason the summer went the way it did. Barcelona president Joan Laporta had already said that the total debt was €1.3bn, and that they had lost over €450m in the last year alone. But still, seen like this — delivered by the league itself, held up in contrast to other clubs — it was startling. A long list of figures that broker no argument and offer no way out, including Barcelona’s, a figure seven times lower than Madrid. Seven times lower than where they used to be: two summers ago, Barcelona’s limit was €671m.
And nor is it just Madrid. A few days prior, Koeman said that finishing in the “high positions” in La Liga would be a “success.” If, in the end, it comes down to money — and it so often does — he’s right. It is not just Madrid who can spend more on their squad than Barcelona can. It’s Sevilla and Atletico Madrid and Villarreal and Real Sociedad and Athletic Bilbao. They’re not even that far ahead of Espanyol. At under €100m, there is not a club in the Premier League that can’t spend more.
This summer, according to LaLiga’s own figures, Premier League clubs spent €1.386bn; Spain’s clubs spent €271m. The leagues in Germany, France and Italy all spent more as well, in absolute terms. When it came to net spend, though, Germany and France had recouped more money than they had spent.
Luis Suarez speaks about his departure from Barcelona and why it hurts him to see what’s happening at the club.
LaLiga’s money rules pinched more than just Barça
The figures for LaLiga teams make fascinating reading. Look at some of the other outstanding clubs on the list: the team at the bottom is Valencia. Yes, Valencia. Their limit is €30.98m. If not for the injection of cash from the league-wide deal with investment firm CVC, it may have been just over €10m.
The league’s finance director said Valencia had suffered the “perfect storm” — the pandemic, their failure to qualify for Europe, and the slowing of market when it came to sales to balance the books, with their total debt around €450m. They still made those sales, six starters leaving last summer before most people realised just how bad things would get, but without generating the return they needed.
Fractionally above Valencia are neighbours Levante, whose timing, it turned out, could not have been worse: they redeveloped the stadium just as there was no one to fill it. Atlético’s limit came down by more than half despite winning the league, essentially because they had overspent the year before.
As for Real Madrid, theirs was so high — it had increased from last year, going from €468m to €739m — because, according to LaLiga executive José Guerra, their management of the crisis provoked by coronavirus had been “brilliant.” Something, it should be said, that belied former Barcelona president Josep Maria Bartomeu’s claim that it was only the pandemic that sunk the Catalan club.
Madrid had reduced salaries, put together a contingency fund, made sales and turned a very small profit. Sergio Ramos, Raphael Varane and Martin Odegaard had all gone, the economic impact significant. Carlo Ancelotti had been told that there was not much money to spend when he took over, that there would not be signings, that the policy of austerity would continue. The money they’d saved was gathered for a bid for Paris Saint-Germain‘s Kylian Mbappe that, the league confirmed, they could have afforded. Or, at least, completed while complying with the limits.
In the end, they didn’t, and a small-ish part of that outlay was used to sign Eduardo Camavinga instead. Madrid didn’t hit the limit — just as they have not done for the past few years.
And that’s the other thing that it is worth remembering. Salary limit is not the same as budget. Salary limit is not even the same as salary mass. It is a maximum a club is allowed to spend on the squad, set by the league’s calculations of incomes and assets, held against a series of criteria, some complex some more simple.
It’s not what they have to spend, and it’s not what they have spent. It is not a simple percentage of income as is often assumed, although it is true that the league recommends that salaries should not be much more than 60% (but then that’s just good practice). It is, though, ultimate a simple number, a firm limit drawn up, a line in the sand over which a club cannot cross. And it is designed to prevent clubs in trouble deepening their problems by continuing to spend what they cannot afford to do.
These figures, revealed now as they are every year in great detail, are what the clubs were limited to in the summer just gone. When, and this is the key, it came to spending. And new spending at that. To use the obvious case: had Lionel Messi already been in the Barcelona squad with a valid contract, rather than effectively a new player they were having to (re)sign, they would have been able to keep him*. His salary would not have been considered as contributing to Barcelona failing to meet their salary limits (but the cost of having him would contribute to that limit coming down of course).
You can be over budget, but if you are, you cannot spend. The league use an application and automated system, and it is very simple: if you do not fit the criteria and you come to try to register a player with the league, you simply will not be able to click on the green button to do so. It will be grey instead. Computer says no. No arguments, no deals done, no way round it.
Well, there is one way around it. Because of the pandemic, a little wriggle room was applied. Clubs that were over the limit could still spend on new players if they made savings, if they demonstrated that they were servicing their debt, cutting costs and dealing with their financial deficit. If their net costs were not growing — if, in fact, they were declining and rapidly — they could spend at a rate of 1:4. In other words, for every €100m that they managed to demonstrate that they’d recovered, they could spend €25m. Which is why Barcelona could sign, per the criteria, despite their overall spending being above that €97.92m. (Barcelona’s actual salary costs are still over €400m.) But for every euro that went out, four would have to come in. They also might not want to sign because their overall financial health is a different (but linked) issue.
This was a situation played out at clubs all over Spain, everyone one of them held to the same criteria, if not all of them managing it in the same way. Villarreal and Sevilla used sales — less than expected in Sevilla’s case because Jules Kounde didn’t depart — to fund spending that outstripped everyone else. No one had outlays as large. Atlético signed Antoine Griezmann because they knew that Barcelona would eventually have to let go for free. Valencia only spent any money, around €8m on Marcos Andre — the first time they had paid for a player in two years — at the end of the market once the deal with CVC was done.
After Messi fiasco, can Barça afford to oust Koeman?
All of which leads to the key question, and those asterisks above: Messi. When Barcelona announced that he was departing, their statement insisted that both player and club wanted him to continue but that the league’s rules didn’t allow for it. But that’s only partly true. An early renewal would have avoided that situation and, anyway, purely by the salary limit criteria he could have stayed, according to Guerra.
Signing the CVC deal was one way, but not the only way, even if it felt that way with time running out. Whether it would have been good for their economic health is another matter, one that the men whose financial guarantees allowed Laporta into the presidency impressed upon him.
“There were solutions to have kept Messi,” Guerra claimed. “The club decided to apply its ability to contract [players] in other areas. It was not just financial issues.”
Only it was, mostly. Messi went. Others did, too. Anyone they could move on, they did. But they could not do it enough and could not choose who they moved out, either. It’s often said that financial fair play is not applied, but here it was, and to the ultimate consequences.
Why don’t Barcelona have a better team? Because they can’t afford it. That is the problem to which Koeman refers: a real, tangible, footballing one, not some abstract economic question to be ignored. It is a rule imposed by the league on everyone who wants to register a player.
Even, in Barcelona’s case, their own. The best player in their history. In the league’s too, but there was no backing down. Barcelona might have kept Messi but no one else would have come — that might not have been such a bad thing — and time was slipping away from them, no guarantee that savings could be made. No one was buying, not least because they knew they didn’t have to, Atletico playing with the clock and Laporta’s desperation with Griezmann. Players refused to move. Pay cuts happened late, when they happened at all.
Those that came — and all came on free transfers except Emerson, who was then transferred for a small summer profit — came at a quarter of the costs that Barcelona could shed, every deal dependent on another. If not, they simply could not be registered (which they were not until the last minute, of course.) They would have been left in limbo. Rather like their manager.
A lack of alternatives and a lack of money keeps Koeman at Barcelona, the existence of a problem bigger than him the reason that the particular problem of him persists, getting bigger by the game.
Ditching Koeman would cost Barcelona €12m in severance pay when the club has yet to pay Quique Setién or Ernesto Valverde. The league does not allow clubs to benefit from unilateral sackings, so any salary saved as a result of firing him without an agreement cannot be taken off the limit, freed up to sign another manager. But because the league don’t want clubs to be stuck (or managers too), there is special dispensation to bring in a new coach. Beyond the salary limit, beyond the 1:4 option, Barcelona can spend €3.91m on their new manager because the rules state that as an emergency measure, you can spend 4% of your limit.
And that, this week showed in stark black and white, is €97.92m. And that, everyone knows, is the real problem. Well, one of them, at least.