Barcelona’s swift move to cut pay smacks of panic
The statement from Barcelona on Thursday morning was certainly intended to announce something in relation to the reduction of the biggest wage bill in world football, but for exactly what was planned you just had to take the word of those privy to less formal briefings.
A “proportional reduction of the remuneration provided for in the respective contracts” was the club’s explanation. Elsewhere, the word was 70 per cent salary cuts for the first team, pro rata until the coronavirus crisis had passed, with no suggestion that these would be deferred.
News of the negotiations had broken a couple of days earlier as the club president, Josep Maria Bartomeu, proved unusually quick out of the blocks to try to rescue the situation.
Barcelona’s wage bill is extraordinary: €671million (£601million) in their last accounts for all their sporting teams including basketball, handball and the rest, although it is Lionel Messi and his first-team peers who account for all but about €55million of that. Even without a global pandemic and economic meltdown, Barcelona’s situation was precarious, but the speed – some might say panic – with which Bartomeu rushed in would suggest this is a matter of urgency.
The Barcelona players may well be looking at Juventus, whose squad, it was announced yesterday, have waived the equivalent of four months’ salary – around £90million – to help the club through the crisis. Juventus’s wage bill for the first half of this season was up €30million to €173million from the same period last season but they are still more profitable than Barcelona. What lies in store for the big stars of the Nou Camp?
They were still keeping their counsel this weekend over any wage cut although their basketball counterparts in Barcelona Basquet were beginning to break rank. Alex Abrines, a former NBA player and Spanish Olympian, tweeted that talks between management and players were being leaked. “The only reason I see [for leaking] is that you want to destroy the team,” he posted, adding that were those responsible to be successful they would be “left without a team”.
The key question being: what are Barcelona and their president doing? Real Madrid have kept their powder dry, presumably waiting for developments ahead of the July 1 deadline when their payroll for the preceding six months is due. The season was already becoming a management nt catastrophe for Bartomeu, who somehow made his ham-fisted sacking of Ernesto Valverde worse orse by alienating Messi at the same time. me. Barcelona then struggled to o raise the funds to sign a striker in January anuary amid a major injury crisis. It makes akes you wonder just how dire the situation uation had become before coronavirus s struck.
In their accounts ccounts for last season, Barcelona announced a record turnover of f €990million, albeit with operating ting expenses of €973million. n. They are a club operating right ight at the maximum of their earning power, with h a profit after tax of just €5million. illion. In January, they ey could not even tie up a loan deal with Valencia cia for striker Rodrigo. It does not sound like a club who can weather r the kind of
They are a club operating at the maximum of their earning power
storm being whipped up.
Ultimately, it seems that the savings will have to be made among their star players, although there is no word yet from the senior members of the dressing room on how big the savings will be, or for how long. The rest of the world is watching. If Messi, Luis Suarez and Gerard Pique, among others, are prepared to take a reduction in pay, with no prospect of a deferred payment, then it will make that decision much easier for, say, English Championship clubs to sell to their own squads.
Another star of Barcelona Basquet, Nikola Mirotic, who is thought to be the highest-earning European-based basketball professional, on a salary estimated between €4million and €5million, has said that he has agreed a pay cut. He said he spoke personally with Bartomeu and volunteered to do so. Given that Barcelona’s basketball operation is loss-making, there may have been no other option.
In Spanish football, the announcement from Barcelona meant that others felt confident to do the same. Atletico Madrid cited employment legislation enacted by Pedro Sanchez, the Spanish prime minister, to which the closest equivalent is the UK Government’s furloughing measure. The Spanish government has promised relief in the hundreds of billions but there has been much less detail forthcoming about how it will do so.
Atletico’s wage bill is about €350million, much less than the big two in Spain but considerably more than the next largest: Sevilla (€185million) and Valencia (€177million). Espanyol, who have a wage bill of €86million, are another who have announced a pay cut. The club are owned by Chinese businessman Chew Yansheng and, struggling in the first half of the season, invested in players in January to try to avoid relegation. How many more Spanish clubs will follow suit this week as the crisis worsens?
The crisis is exposing clubs who for too long have lived month to month and those who have extended themselves the furthest are being obliged to take preventive measures earlier.
In the English game that has started in the Championship, where Leeds United have been the first to announce wage deferrals. In the leagues below the April payroll is looming like treacherous rocks in a storm.
But at Barcelona, named in the Deloitte’s Money League this year as the biggest revenue-generating club, it seems to have come sooner than expected. They say they are closer than any to a €1 €1billion billion turnover and yet they have a wage bill that holds them hostage to fortune. If this latest crisis does not prompt a rethink of the way they operate, then it is hard to think what will.