Lionel Messi Stays At Barcelona; Takes 50% Pay Cut

Friends,

Despite pandemonium last year when he informed Barcelona that he wanted to leave, Lionel Messi has agreed to a new 5-year deal with the world’s most valuable soccer club.

There was interest from Paris Saint-Germain and Manchester City, but the new deal will keep Messi at Barcelona until he is 39-years-old and early reports suggest that the legendary forward has accepted a 50% reduction in pay.

Messi became a free agent after his previous contract expired on June 30th at midnight.

Many sports fans were shocked when Lionel Messi’s contract details were leaked last year — a four-year deal worth $674 million. At $168 million annually, that made Lionel Messi the highest-paid athlete in the world by a wide margin.

But it was complicated. The $674 million deal included a ~$135 million “renewal bonus” and a ~$90 million “loyalty bonus” — a sum given to a player as a sign of gratitude for his long-time services — which left about ~$450 million in salary and bonuses.

Messi’s base salary was about ~$85 million annually, including both performance pay & image rights, but he also had about $20 million in annual bonuses — playing 60% of games, winning La Liga, Champions League, etc. — many of which weren’t met.

The point being: Lionel Messi made more money through base salary than any athlete in the world over the last four years, but the headline “Messi brings home $168 million in annual salary” is a little misleading.

This thread does an excellent job breaking it down.

Regardless, despite being with the club since he was 13-years-old, Messi was vocal about his desire to leave Barcelona last August following a Champions League loss to Bayern Munich.

Why? A damaged relationship with then-president Josep Maria Bartomeu. Among other things, Messi called Bartomeu a "liar" and said the Barcelona board had been "making things up as they go along" and "plugging holes" for years. Not great.

But with Bartomeu being replaced by Joan Laporta — president of the club when Messi made his first-team debut — things appeared to be moving in the right direction. Laporta has maintained a good relationship with Messi & his family throughout the years and was reportedly “convinced” he would be able to persuade Messi to stay.

Spoiler alert: He was right.

The deal should be publicly announced in the next few days, but Bartomeu’s work isn’t done yet. Barcelona was previously warned by La Liga president Javier Tebas that they would need to reduce spending to comply with the league’s Financial Fair Play rules.

Barca dropped its salary cap from $800 million to $450 million during the pandemic, but with the club still holding a whopping $1.5 billion of debt on its balance sheet, there is still more work to be done.

Having the legendary Lionel Messi stick around on a deal worth 50% less is certainly helpful. Still, in the end, it will come down to Barcelona’s ability to maximize revenue, reduce debt, and return to proper financial health.

Ps. Messi will be just fine; he was the world’s second-highest-paid athlete last year — earning more than $130 million in income — and will almost certainly be a billionaire at some point…if he isn’t already :)

Have a great day, and I’ll talk to everyone tomorrow.

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