Why Lionel Messi and Neymar's wage increase could force Barcelona to sell players
According to reports, Lionel Messi’s contract will see him get a raise next season that will push the Catalan club’s spending to the limit. Moreover, if Neymar’s contract is also renewed, the club could be in dire straits with respect to La Liga’s salary cap and Financial Fair Play (FFP) rules.
Messi’s current salary is €22.8m per year but his new contract will see it rise to €39.4m in July this year, ahead of the 2016/17 season. Neymar’s contract expires in 2018 and Barcelona will have to offer him a new and improved contract or risk losing him to their rivals in Europe, most notably Real Madrid who have been constantly linked with the Brazilian forward.
Barcelona on brink of La Liga salary cap
La Liga’s salary cap currently allows Barcelona to spend only €421 on wages of the players and staff. At present, they are spending a total of €419m – reportedly 73% of the club’s yearly budget, according to AS. To also ensure they remain within the limits of FFP, they will need to considerably increase their commercial income. Barcelona are currently second on the list of highest earning clubs in Europe.
The biggest problem the board face is bringing the ratio of club debt to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) down. The club board must resign if this ratio is not in accordance with the directives issued. Last year’s ratio stood at 3.2 when it should have been much lower at a required 2.5. If the ratio is not brought down to 2.25 by the end of the financial year (2017 in Spain), the board must resign, including newly-elected president Josep Maria Bartomeu.
With the comparatively higher tax in Spain, Messi’s pre-tax wages amounts to €80m while Neymar’s new contract could take it up to €50m so he gets to keep approximately €23m after tax. With Luis Suarez also earning around €20m, the trio of MSN will reportedly earn more than €150m of the €421m available – more than a third of the club’s total wages.
Apart from Neymar, even other starters such as Andres Iniesta and Sergio Busquets are in line for contract renewals. 31-year-old Iniesta’s contract runs out in 2018 while 27-year-old Busquets’s contract runs til 2019.
Will Barcelona be forced to sell Neymar?
The precarious financial situation of the club is the root cause for the rumours linking Neymar to a premature exit from the Camp Nou. With the club’s wages at the absolute limit, they will not be able to sign new players unless some are moved on.
Neymar seems most likely to leave for more reasons than one. His current contract already has a clause to increase his wages next season regardless of a new contract being offered. But outside the club, he is in trouble with the Spanish authorities with respect to unpaid taxes.
Many of his assets were frozen by a court order last year after suspected tax fraud during his transfer from Santos to Barcelona. the Brazil captain was also fined in his home country for unpaid taxes. With Barcelona also accused of evading taxes to the tune of millions when they signed the 23-year-old, he has been asked to testify on 2 February in a Spanish court.