The terms of the automatic salary raise in Leo Messi's Barcelona contract, revealed last week by Argentinean daily ARA, represent a stomach blow for the club's accounts. In accordance with the terms of his contract, Messi's annual wages will jump to 39.4 million euros net per year from 22.8 million as of June 30. Having some of the best players in the world at Camp Nou will oblige Barcelona to significantly increase the club's income to meet Financial Fair Play rules and to stay within the parameters in terms of debt and expenditure laid out in the club's statutes.
This obliges the board to resign if during the course of two consecutive mandates the ratio of debt to EBITDA (income gained before tax and repayments) does not meet pre-established objectives. Last year that ratio should have stood at 2.5 but was at 3.2. At the end of the next financial year the ratio must be lowered to 2.25, or Josep Maria Bartomeu and his board will be forced to step down.
Messi's pay rise, coupled with Neymar's pending contract renewal and the large salaries of other star players such as Andrés Iniesta, Luis Suárez and Sergio Busquets, who also has a renewal coming up, has placed Barça in a delicate position. The club's plan is to expand its commercial base to bring in some one billion euros a year by 2021.
As things stand, Barça are on the cusp of the salary cap imposed by LaLiga of 421 million euros. Barcelona's wage bill for players and staff currently stands at 419 million, which represents 73 percent of the club's annual budget.
If we consider that Messi will be paid 80 million euros before tax as of June and that the terms of Neymar's new deal will not be any lower than 50 million a year (22.8 million euros net), and that Suárez gets paid 20 million gross, it can be calculated that Barcelona's front three account for 155 million euros' worth of the overall wage bill of 421 million.
In Neymar's case, the Brazilian signed an agreement in 2014 that would see his annual wages rise automatically after two years at the club. Currently on 9.1 million a year net, to which has to be added the infamous 40 million that Barcelona parted with during the negotiations to bring the player to Camp Nou, this season Neymar's basic wage will rise to 17.6 million this season even without negotiations on a new deal. The player's current contract expires in June 2018.