As a result of the coronavirus pandemic, sports franchises around the world have been forced to find creative ways to cut costs and minimize losses. Without fans in the stands, teams have had to make do without the traditional revenue that would come by way of ticket, concession and merchandise sales.
For some franchises, the pandemic has accelerated an ongoing financial downturn. Professional teams around the world have cut player wages, requested federal aid and even gotten rid of mascots in order to minimize the economic burden caused by the pandemic. For an example of a club hit hard by the pandemic, look no further than Spain’s FC Barcelona. Rumors of financial turmoil at Barcelona have been swirling for a few years now, but recent reports indicate the club’s debt has surpassed $1 billion.
Barca has always been willing to take financial risks, as the club made major investments into its global and digital presence in 2018 in an effort to become the first club to surpass a billion euros in annual revenue. While the world’s second most valuable club fell just short of that mark prior to the pandemic, its finances have only worsened since. While many top European clubs usually possess a significant amount of debt at any given time, Barcelona’s debt is exceptionally high.
Nonetheless, while the club mires through its worst financial crisis in history, the club has gone about transfer and contractual business as usual. A recent report from Spanish publication El Mundo revealed one player in particular, Lionel Messi, has been living particularly comfortably. The report showed Messi’s most recent deal, signed in 2017, was the largest in sports history. Over four seasons, Messi’s deal is valued at just over $670 million, including incentives.
While Messi and fellow FC Barcelona players agreed to a wage cut to help offset losses, Messi’s case is different from his teammates and it should be treated as such. No other player on Barcelona’s roster makes nearly as much annually. In fact, you’d struggle to find another athlete in the world who makes those figures. While players undoubtedly are told to maximize their earnings while they’re in their physical prime, a player taking in close to $150 million per season should probably be treated as an exception.
To be fair, Messi and his teammates not only agreed to a pay cut, but they also offered to cover the remaining salaries of staff members who had their wages cut. Despite the 70% player wage cut and the offer to cover staff salaries, Barcelona still cut members of its staff, citing concerns related to the pandemic and loss of match-day revenue. Make no mistake, Barcelona is not the only club losing tremendous amounts of revenue, but it does seem like the only club this deep in trouble. Barca is also the only club laying off long-serving staff members in order to pay one man, who openly expressed his desire to leave the club this summer, upwards of $100 million annually.
The issue here is not with Messi. Rather, blame should be placed on those who managed Barcelona’s finances so poorly that it ended up in this position. A club of this stature should not have to furlough non-playing staff as quickly as Barcelona did. Other top-flight European soccer clubs have reversed decisions to furlough staff after receiving backlash from the public. Barcelona chose to follow through with its furlough, while paying one player likely more than what it would have cost to keep every member of the staff it let go.
Messi and Barcelona know how bad this looks. It’s probably why they’ve already taken legal action against those who leaked the report.
The issue and solution here are both quite simple. To be frank, Barcelona laying off staff for “financial reasons” while privately playing a single player almost $150 million a season is despicable. Asking players to take wage cuts and needing them to cover salary for other employees is borderline dumpster-fire-esque. But worst of all, this could have been avoided by either making Messi’s contract public when it was signed in 2017, or restructuring player contracts to accommodate for staff salaries at the beginning of the pandemic.
Player salaries are astronomical. Staff salaries aren’t. A path to righting its wrongs is there if those at FC Barcelona want it. Based on what we’ve seen so far, though, the club will continue to tarnish its image.
Moving forward, Barcelona’s brass should not pretend they don’t have money to pay their staff when they do. They just don’t want to.
David Ramirez is a junior writing about the intersection of sports and business. He is also a sports editor at the Daily Trojan. His column “Playing for Profit” runs every other Monday.