On the eve of Sunday, after the details of Lionel Messi’s contract with FC Barcelona was published by Spanish news outlet El Mundo, it generated mixed reactions, with many saying that the Argentine has ruined Barcelona financially and others that he deserves what he’s got.
The contract details put Messi’s earnings from 2017 at $672 million, making him the highest paid athlete in sports history.
The financial turbulence that the Spanish club is currently going through lent credence to the uproar. COVID-19 pandemic ushered in a new era in the world of football that left every club in a briskly financial status as ticket sales is no longer part of football business. Barcelona, depleted of players, needs money to reinforce the team that has been struggling both in European and domestic competitions. The situation appears to have justified the outcry.
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No other player in the world has come close to amassing such wealth in such a short period. Messi’s contract which was signed in November 2017 runs till June 30 this year, saw him earning about $167 million a season. The contract includes bonuses, media rights, a renewal fee of $139 million for accepting the contract and a $94 million loyalty bonus.
It was huge, but the question many are not asking is: does Messi deserve the pay?
Apart from his genius in the field of play that has single handedly placed Barcelona in top flight football, with crazy individual records such as 650 club goals, 260 assists in 755 matches, Messi has contributed more financially to the Catalan side than many know.
Marc Menchen, the director and creator of 2playbook and Ivan Cabeza, an economist and the founding partner of Laudem Partners, spoke to Spanish sports news outlet Marca, on the economic impact of Messi on Barcelona, and it’s revealing.
Cabeza categorized Messi’s impact on the club into three: economic, sporting and emotional, while Menchen asserted that the left-footed wonder boy made between 130 to 200 million euros for Barcelona annually before the pandemic.
“There are things that we cannot quantify exactly but that show us the importance of Messi,” Cabeza explained.
“For example, 36 percent of the trophies won by Barcelona have been won with him. Most commercial or sponsorship contracts have a clause that is determined according to this player. And on an emotional level, the Barcelona-Messi brand is known all over the world; there are tourists who come to the city to see the player, followers on social media…”
The economist believes Messi generates more money for Barcelona than he takes, and therefore deserves what he received in the leaked contract.
“Annually he must generate between 130 million [euros], minimum, and 200 million, maximum.
“Therefore, if you take the proportional part of his salary, bonuses and everything for a season, it doesn’t exceed the amount he receives,” he said.
Menchen noted that apart from the direct revenue, Messi is also generating indirect money that impacts Barcelona’s finances positively, but it is difficult to quantify.
For instance, the club will not receive the same amount if Messi plays in a friendly game or if he doesn’t travel. There is however, a penalty clause if the Argentine astro doesn’t travel for a supposed game or sponsorship events because his presence is largely what people want.
Apart from sponsored games and events, Messi generates money for Barcelona through shirt sales. An estimated eight out of nine shirts sold in the club have Messi’s name on the back, and they account for around 20 million euros yearly.
There is also revenue from ticket sales. Before the pandemic, interest in Barcelona’s match is hugely at Camp Nou. About five to 10 percent of tourists who come to Barcelona are largely interested in watching their home games, mainly because of Messi.
Menchen also pointed out his social media impact. The name “Messi” in the content guarantees maximum traffic.
“The videos of Messi celebrating a goal or anything else ensure great media visibility, whether he plays well or not. It is a difference, for example, with Real Madrid,” he said, adding that he compensated what was paid with what the club generated.
Messi’s impact on Barcelona’s sponsorship deals is also notable. His stay at Barcelona has been largely responsible for the lucrative partnerships, such as with Rakuten and Beko. Even in the face of the pandemic that has drastically plummeted many clubs sponsorship earnings, Barcelona has remained on top. Rakuten renewed for one more season although with a substantial reduction in the emoluments, and Beko is expected to do the same.
Barcelona was declared the richest club in the world, according to Deloitte’s latest Football Money League, despite the club’s revenue falling by 125 million euros to 715.1 million in the 2019-20 season, beating Spanish rivals Real Madrid, largely due to Messi’s impact.
Granted, the club has suffered financial woes, but it has been attributed to mismanagement by the board.
“The problem has been the mistakes in economic management made in recent years, the millions spent on signings and some renewals,” Victor Font, Barcelona presidential candidate said.
However, Barcelona has responded to the leak by saying it will take legal action against El Mundo, as it is against ethics to make a player’s contract public.