Football

Latest wage caps favour Real Madrid as La Liga hit Barcelona with €280 million cut

In the La Liga expenditure limits for the 2021-2022 season, Real Madrid has been given a salary cap increase of €270 million. However, bitter rivals Barcelona have had their cap slashed by €280 million, in the wake of recent financial troubles.

In the La Liga expenditure limits for the 2021/2022 season, Real Madrid has been given a salary cap increase of €270 million. However, bitter rivals Barcelona have had their cap slashed by €280 million, in the wake of their recent financial troubles.

Real will have a total spending limit of well over €739 million, whereas Barcelona will only have a total spending limit of €97 million, which is less than one-sixth of their rivals and the league’s seventh-highest.

Atletico Madrid, the current champions, have also had their spending limits reduced from last season, with Diego Simeone’s side allowed to spend €171 million, down from €81 million in 2020-21.

La Liga derives these figures after auditing its teams’ earnings, expenditures, losses, overheads, and debts. They’re in place, in principle, to encourage sustainability and keep teams from overspending.

In other words, each team has its own salary cap, which is determined by a combination of criteria like revenue, costs, and debts. It accounts for about 70% of a club’s earnings.

The changes are part of the Spanish league’s long-standing financial control regulations, which aim to decrease debts and keep teams in good financial shape.

Barcelona’s troubles had previously prompted the league to reduce 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 due to the club’s struggles. Apart from losing Messi, Barcelona also loaned Antoine Griezmann to Atlético Madrid this summer, and it’s only new additions were free agents.

Six other clubs currently have spending caps that are higher than Barcelona’s.

Madrid, who has the highest ceiling, increasing from 470 million euros ($550 million) to 739 million euros ($863 million), or 642 million euros ($750 million) more than Barcelona, profited from improved management and, in particular, the fact that they did not make any major acquisitions in previous transfer windows.

Sevilla came in second with a budget of 200 million euros ($233 million), up from 185 million euros ($215 million) the previous season. After having its cap decreased to 171 million euros ($199 million), Atlético Madrid was placed third on the list.

Valencia, which is owned by Singaporean businessman Peter Lim, came in last among the first-division clubs, with its pay ceiling reduced from almost 100 million euros ($116 million) to merely 30 million euros ($35 million).

The league’s total cap for top-tier clubs was 2.27 billion euros ($2.64 billion), down 2% from last season’s level. Clubs have already reaped the financial benefits of the league’s new multibillion-dollar partnership with investment firm CVC.

Spanish clubs spent 271 million euros ($316 million) on new players in the most recent transfer window, according to the league, the least of the top five European leagues.

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