MADRID (AP) — Barcelona's salary cap has been significantly reduced because of its financial struggles, becoming more than seven times smaller than that of rival Real Madrid, the Spanish league said Wednesday.
The league said Barcelona's spending limit on salaries for the 2021-22 season has been set at 97 million euros ($113 million), about 285 million euros ($334 million) less than a year ago.
The reduction was part of the reason the Catalan club failed to give Lionel Messi a new contract and led to him joining Paris Saint-Germain.
Messi reportedly earned nearly 140 million euros ($163 million) per season, although he said he had agreed to cut his salary in half so he could stay with the club. That still wasn't enough of a saving for Barcelona.
Each club has a different salary cap calculated based on a series of factors that include revenues, costs and debts. It is proportional to roughly 70 per cent of a club's revenues.
The adjustments are part of the Spanish league's longstanding financial control measures to reduce clubs' debts and keep them financially healthy.
Barcelona's struggles had already forced the league to slash the club's cap from a league-high 670 million euros (now $785 million) in 2019-20 to 385 million euros ($450 million) last season. In addition to losing Messi, Barcelona also sent Antoine Griezmann on loan to Atletico Madrid, and its only signings this offseason were free agents.
Six other clubs now have bigger spending limits than Barcelona's.
Madrid's cap is the highest, going from 470 million euros ($550 million) to 739 million euros ($863 million), which is 642 million euros ($750 million) more than Barcelona's. Madrid benefited from better management and especially from not making big signings in recent transfer windows.
Sevilla followed with a cap of 200 million euros ($233 million), up from 185 million euros ($215 million) a season ago.
Atletico Madrid was third in the list after having its limit reduced to 171 million euros ($199 million).
Valencia, owned by Singaporean businessman Peter Lim, was last in the list of first-division clubs, with its salary cap being cut from about 100 million ($116 million) euros to only 30 million euros ($35 million).
The league's total cap for top-tier clubs was at 2.27 billion euros ($2.64 billion), a figure 2 oer cent lower than it was last season.
Clubs are already starting to budget based on the expected revenue they hope to get from a new investment fund with private equity company CVC that could generate 2.7 billion euros ($3.2 billion), but that has been opposed by the Spanish football federation, Real Madrid and Barcelona. CVC would gain a 10 per cent stake in a new commercial entity with the competition known as La Liga if the investment package goes through.
The league said Spanish clubs spent 271 million euros ($316 million) in signings in the latest transfer window, the lowest among the top five European leagues.