El Mundo Leaks
El Mundo sent shock waves through the sports world after leaking Messi’s contract. They made drastic claims that it was Messi’s contract that has lead the club into massive financial trouble. Ignoring the full picture of both Messi’s value and Barcelona’s larger financial issues, El Mundo falsely placed sole responsibility for the club’s situation on Messi.
Something that must always be considered when dealing with leaked documents, is motive. In the case of Messi’s contract the timing of the leak is very telling. With two days left in the January transfer window and Barcelona currently trying to avoid a seemingly imminent bankruptcy, the timing of this is very interesting. Given it is near the end of the transfer window, it could be done in an attempt to try to force Messi out of the club mid-season. However, it seems more likely that Barcelona is getting close to defaulting on some of their loan payments, so they are trying to put the blame on anyone but their own gross mismanagement or Barcelona opposition groups are trying to destabilize the club.
The Truth About Messi’s Contract
Per the leaked contract, Messi was revealed to earn up to 555 million euros over a 4-year time frame. The deal means Leo Messi is earning about 139 million euros per year. That is a massive number that has shocked many. Given Barça have debts in excess of €1 billion, El Mundo placed the blame on the size of Messi’s contract. Their claim is that Messi’s past four years alone accounts for half the club’s current debt, therefore he is responsible for this crisis.
The first thing to look at with Messi’s contract is what he costs vs what he earns. Based on the number leaked, Messi earns €139 million per year. Estimates are that Messi brings Barça between €250 and €300 million every year on his own. Barcelona anticipate revenues and expenses of about €1 billion/year. Messi’s contract is about 14% of that, but his revenue makes up as much as 30% of the club’s entire revenue.
Even taking his wages into account, it means Messi earns Barça a net profit of €111 to €161 million every year. That money is generated from things like shirt sales, with 3 out of every 5 Barça shirts sold baring Messi’s name, higher sponsorship deals to have Messi involved, and increased ticket revenue from people coming to watch Messi play rather than the team itself. Given those numbers it is not surprising to see the backlash at El Mundo’s framing of the leaks.
The one caveat of Messi’s contract, is that it drives up other players wages, players that have not earned their salaries. Poor negotiation tactics in contract talks have allowed for players to have very high wages on long-term contracts. The reports of the deal that Bartomeu’s board offered Eric Garcia illustrates this failure perfectly.
Eric Garcia is a largely unproven 20 year old, yet Bartomeu offered a contract that would be more suited to someone significantly older with significantly more experience. Given what Garcia would have made under Bartomeu’s deal, the contracts the rest of Barcelona’s players are on is concerning.
Reports are that Barcelona’s wage bill is 74% of their expenses, indicating there are many irresponsible contracts. Messi’s contract is 14% of the overall expenses, meaning the other players are costing 60% of the club’s expenses. If those players brought in twice the amount they are paid, as Messi does, the club would not have the trouble it does. However, these players are clearly over paid. It is those contracts that are causing the club to lose money, not Messi’s.
In addition to the contracts and salaries of the players, the transfer fees Bartomeu paid for players are causing a problem. Over the period of Messi’s most recent contract, FC Barcelona and Barça B both have net transfer losses, about €251 million and €5 million respectively. It is also being reported that Barcelona owe other clubs between €126 million and €200 million in unpaid transfer fees, which amounts to about 20% of their debt. Combine that with the underwhelming performances of several of their most expensive signings, and it is easy to see where some of the debt comes from.
The truth about Barça’s debt is that it is a result of bad management. Bartomeu flung money around and overpaid players and clubs. He also wasted funds on things like creating false stories about current and former players, managers, and staff. Contrary to El Mundo’s claims that Messi’s contract is the reason for Barça’s debt, the truth is that there is only one person to blame, and that is Bartomeu.