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Messi, Ronaldo and world’s best paid footballers set for wage cuts

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Via Financial Times

Lionel Messi and Cristiano Ronaldo are among superstar footballers facing steep pay cuts or wage deferrals, as the world’s biggest football clubs seek to offset losses prompted by the coronavirus pandemic. 

At least ten of the world’s 12 highest earning clubs in Europe are negotiating measures to reduce their multimillion euro player wage bills, according to multiple people familiar with the discussions.

Even the richest teams, concentrated in the sport’s financial stronghold of Europe, have suffered a severe cash crunch due to matches being suspended during the global pandemic. The postponement means no income from matches or broadcasting. Football is suspended across the continent until May at the earliest but is expected to be delayed for many more weeks.

Wages at the top five European leagues of England, Germany, Spain, Italy and France come in at €9bn, accounting for 62 per cent of all club revenues, according to consultancy Deloitte.

This week, FC Barcelona, the world’s highest-earning club, announced temporary pay cuts for its playing squad, including some of the sport’s biggest stars such as Messi and Luis Suárez. 

Germany’s Borussia Dortmund has said its players have waived part of their salaries in a move that will save “a double digit million” figure in personnel costs, while Bayern Munich players have agreed to a 20 per cent pay cut. 

Italy’s Juventus, where Portugal striker Ronaldo plays, is in talks over changing player pay deals, according to a person with knowledge of the discussions. 

On Friday, the Premier League held a meeting with the Professional Football’s Association, the players’ trade body in England. 

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The PFA said the talks were needed because “as with other industries, the current Covid-19 crisis is having a severe impact on the finances of the game. Several clubs have already approached players with a view to imposing pay deferrals”.

All 20 Premier League clubs are meeting next Friday to continue discussions on their response to the coronavirus shutdown. Several people familiar with the talks suggest the teams are trying to agree a deferral of wages across the board. 

They said that while the “Big Six” clubs — Manchester United, Manchester City, Arsenal, Tottenham Hotspur, Liverpool and Chelsea — have not initiated the discussions, they were likely to agree a collective measure that would support hard-pressed clubs lower down the league.

The Premier League and PFA released a joint statement which said that “difficult decisions will have to be taken in order to mitigate the economic impact of the current suspension of professional football in England and agreed to work together to arrive at shared solutions”.

Real Madrid declined to comment and Paris Saint-Germain did not respond to requests for comment.

Domestic football competitions worldwide have been paused because of the global pandemic. Flagship tournaments such as the Euro 2020 Championships and Copa America have been postponed until next year.

Consultancy KPMG has predicted the “Big Five” football leagues in England, Spain, Germany, France and Italy face a hit of almost €4bn from lost match day, broadcasting and sponsorship revenues if the remaining games in their seasons are not completed.

For this reason, many competitions, such as the Premier League, want to extend their seasons into the summer and beyond in the hope of defending lucrative broadcast contracts that will go unpaid if remaining matches are scrapped. 

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Fifa, world football’s governing body, has also drawn up plans to extend player contracts until the end of delayed domestic seasons and shift transfer window dates.

In a document outlining its proposals, Fifa suggests that to “ensure clubs do not bankrupt”, they, players and coaches “work together” to agree pay deferrals or cuts, but added: “Alternatively, all agreements between clubs and employees should be ‘suspended’ during any work stoppage . . . provided adequate alternative income support arrangements can be found.”

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