Opinion | Thursday, 3rd September 2020
Lionel Messi at 33: a good investment for a football club?
Dr Nicolas Scelles explains the financial considerations behind football’s biggest transfer story
By Dr Nicolas Scelles, Senior Lecturer in the Sport Policy Unit at Manchester Metropolitan University.
Since the Argentinian footballer Lionel Messi sent a burofax to FC Barcelona on 25 August informing the club that he wants to leave, a lot of media attention has focused on his possible move to another club.
Questions have been asked about which football club could attract Messi and if such a club would have to pay a transfer fee.
Another major issue is also whether this club could stay within Financial Fair Play regulations and expect a positive financial return on investment, given that Messi is already 33 years old and nearing the end of his football career.
The cost of buying Lionel Messi
Is it possible for clubs stay within Financial Fair Play regulations and still afford Messi? This would probably depend on whether a transfer fee is required or not and how much.
Messi’s current contract with FC Barcelona includes two important elements: a €700m (£626m) buyout clause but also an exit option stating that he could leave for free at the end of each season if he lets the club know about his intention to leave by a given date.
It seems that such date is end of May – more or less the usual end of the club football season – or 10 June. Messi argues that since the season ended later than usual due to COVID-19, his exit option was still valid when he sent the burofax to FC Barcelona, something the club denies.
Who is right probably depends on the exact wording in the contract. If absolute dates were used without mentioning that the season should be played over the usual club football period, FC Barcelona should be right. If the contract mentions that dates may be reconsidered if the season is not played over the usual club football period, this would open the door to Messi being right.
If a transfer fee were required, the amount would be amortised over the length of the contract, meaning that the full cost would not be allocated to the 2020-2021 season. However, such a contract may have a limited duration given that Messi is already 33. It is safe to assume that the contract would probably be less than five years and, as such, a higher cost would need to be allocated for each season.
Messi's salary and not only his potential transfer fee would of course be very expensive, but this could be offset - Messi would also attract additional revenues for the club signing him through the opportunity of new or improved sponsorship deals (dependent on the impact of COVID-19) and merchandising.
This includes shirt sales, although it is important to keep in mind that a club receives only a small percentage of the revenues generated, probably between 10% to 15%.
It is difficult to predict the potential income from additional spectators in the stadium and/or an increase in ticket prices given the current COVID-19 context and the restrictions on stadium attendance.
On the top of these additional revenues, if Messi contributes to a better sporting performance, this will also generate additional revenues, for example more broadcasting revenues since they are partially redistributed based on sporting performance.
Broadcasting revenues also depend on the number of games broadcast live for each club so, again, Messi may have a positive impact here. Although if Messi were to transfer it would most likely be to a club of sufficient success and stature that is already reaping the benefits of these revenues.
In the end, teams could stay within Financial Fair Play regulations and still afford Messi, especially if they let one - or several - of their expensive players go. Indeed, the impact of Messi on the club’s finances would need to be assessed against other decisions made by the club.
The cost of losing Lionel Messi
When looking at the impact of losing Messi on FC Barcelona we can apply what I have written above but reverse it, with decreases in salary costs but also revenues specific to Messi, potentially counterbalanced by increases in salary costs and revenues elsewhere.
The difference with Messi’s potential transfer fee for the selling club will be that the revenue generated would be fully allocated to the 2020-2021 season rather than over several seasons.
The impact would also depend on how Messi would be replaced. Would FC Barcelona already have a player within its current squad who can step up or would they need an expensive signing?
As I am French, I would love watching Antoine Griezmann becoming the key player for FC Barcelona, a little bit like Karim Benzema for Real Madrid after Cristiano Ronaldo left!
To put the impact of FC Barcelona losing Messi in perspective, it is interesting to compare it with the impact felt at Real Madrid when they lost Cristiano Ronaldo in 2018, although it is important to note that this was not in the current COVID-19 context clubs are now operating in. Real Madrid was still able to slightly increase its revenues from €750.9m (£665.2m) to €757.3m (£667.5m) between 2017-2018 and 2018-2019.
However, the other top European clubs - FC Barcelona, Manchester United, Bayern Munich, Paris Saint-Germain, Manchester City and Liverpool - had a much larger increase in revenues, with FC Barcelona becoming the club generating the highest revenues in the world ahead of Real Madrid.
Juventus, Cristiano Ronaldo’s new club, was able to enter the top 10, with its revenues moving from €394.5m (£349.5m) to €459.7m (£405.2m).
Although it is difficult to isolate the impact of a single player on the evolution of revenues, it is likely that Real Madrid would have generated more revenue if Cristiano Ronaldo would have still been part of its squad in 2018-2019. The same would probably apply to FC Barcelona losing Messi in 2020-2021.
Return on investment
Assuming that a club attracting Messi would not be able to sell him at a later date because of his age, the return on investment would depend on the amounts involved in each of the elements I have explained above.
It is dependent on whether the additional revenues generated by Messi would be higher than his costs (potential transfer fee and salary). It is important to emphasise that, even without the prospect of selling him later, any team buying Messi may still expect a positive return on investment.
A key element would be his ability to remain at his best level despite being 33 and getting older and his impact on his new team and its sporting performance.
Although Messi could not prevent FC Barcelona from losing 8-2 against Bayern Munich in the Champions League, his display against SSC Napoli in the previous round of Europe’s elite competition suggests that he is still able to offer his magical decisive moments.
As a football fan, I can only hope for more to come… with FC Barcelona or a new club!
