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Behind Lionel Messi’s Astronomical Contract

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Lionel Messi’s leaked contract in early 2021 has definitely shaken the world of sports and, particularly, the football business industry. The publication from the Spanish newspaper El Mundo of the most lucrative contract in sports history has arisen all sorts of debates in relation to what having the Argentinian superstar really costs and generates for FC Barcelona. 

 

Amidst one of the worst economic and social crisis the Catalan institution has ever faced, the club “expressed its absolute support for Lionel Messi, especially in the face of any attempt to discredit his image, and to damage his relationship with the entity where he has worked to become the best player in the world and in football history.” Let’s take a close look to the business behind the controversy. 

 

According to Forbes, if details are correct, we are in front the most expensive contract ever paid to a football player. The copy of the contract of the 33-year-old player reported by El Mundo includes an agreement valued at 555,237,619.00€ for the length of the 4-year deal signed on November, 25th 2017. On an annual basis, it represents a total annual salary of 138,809,404.75€, complemented with a loyalty bonus of 77,929,955.00€ and a renewal fee of 11,522,500.00€. According to the newspaper, taxes account for almost half of the value, with a total amount of 270,000,000.00€.  

 

 

Without a doubt, numbers that, at first glan ce, can look more than disproportionate. Nevertheless, in order to assess the “real business” for FC Barcelona by counting with Messi in their team, some of the insights and data shared by experts regarding the topic have been evaluated. When analyzing this issue, one cannot forget the current situation the club faces, battling to contain a €1.17bn debt and with wages bills accounting for more than 70% of the club’s overall income. 

 

Ivan Cabeza, economist and the founding partner of Laudem Partners, explained to Marca that the estimated income that Messi brings into the club is between 130 and 200 million euros per year. “There are things that we cannot quantify exactly but that show us the importance of Messi”. Cabeza stated that Messi’s impact must be assessed from an economic, sporting and emotional point of view. “If you take the proportional part of his salary, bonuses and everything for a season, it doesn’t exceed the amount he receives”, said the economist.  

 

Sponsorship, friendly games, merchandising, ticketing and social media awareness are some of the main revenue streams the club will see affected the most in case the striker leaves next summer. Marc Menchén, 2Playbook founder, described how partners have started to rethink their investments as “Rakuten renewed for one more season but with a substantial reduction, Beko will do the same but at fifty percent”. 

 

Messi’s final decision on staying or leaving at the end of the season will certainly influence FC Barcelona’s financials at least in the short-term. A relationship that, despite being considered as astronomic regarding its financials, experts tend to agree on its profitability based on what the player recurrently brings on and off the field. Finally, from a fan perspective, the local and global audience of the Catalan club will ultimately demonstrate how relevant Messi has been for areas such as TV rights, sponsorship or matchday.  

 

 

 


Sources: Forbes, Bloomberg, The Sun, Off The Pitch, El Mundo, Mundo Deportivo. 
Image source: FC Barcelona

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