LaLiga reduces the salary limit of the clubs due to the serious crisis

LaLiga communicated last Thursday to the First and Second Division clubs the maximum amount they can spend on the cost of their squads during the 2020-21 season and today shared the figures with the media in an informative meeting. The teams, which have seen their income reduced in general due to the effects of COVID, have had to readjust their budgets even more than on other occasions and, as a consequence, readjust the amount allocated for this concept (payments to players, coaches, coaching staff , subsidiary …). According to the president of LaLiga, Javier Tebas, the clubs must reduce an excess of about 500 million by losing almost half of last season's income due to ticketing as they cannot enter the stadiums.

The Barcelona, which is one of the teams that faces the most financial problems and has formed a negotiating table with the players to reduce their salary by 30%, they have established a salary limit of 382 million euros. In February 2020, when LaLiga published the last update of this concept, it had the ribbon at 656.43 million euros; € 671.43M will go back until September 2019. The real Madrid, which has traditionally occupied second place in the ranking of those who could spend the most to pay their sports squad, has a cap of 468.53, which places it as the club that can spend the most in the First Division. Atlético de Madrid is around 252 million. The club that could spend the least in LaLiga Santander is Elche with 34.6 million. In Second, the club with a higher salary limit is Espanyol, with 45 million.

Javier Tebas, president of LaLiga, warned that the limit set has improved once the summer has passed, since at the end of last season a starting point of one billion euros less than a year ago was established: “The expenditure ceiling data came to be about 2,843 million. This is very important. That's the most that could be won two years ago, and it was already $ 1 billion less last season. Then, on the way out, they were 1,000 million less compared to the summer of the 2018-19 season. The salary expense was already reduced. Right now there are about 600 million less to spend. It is impossible to remove all contracts at once. There are clubs that need to reduce salary mass or to sell to players. “.

In addition, he warned of a possible problem: “These limits have a possible major error. The tickecting can vary the numbers because we thought that fans could go to the stadiums from January and that is not going to be the case. That is not going to happen. These calculations are for summer and in that calculation there is an excess because it was done in July “.” If there is no audience until the end of the season, the excess would be 707 million. It does not affect everyone equally. It depends on the level of the club. The higher the level, the more it affects. We can correct this excess and keep it at 600 or 550 million if people go to the stadiums before the end of the season, “he added.

What is the salary cap and how is it calculated?

The salary limit o The Sports Template Cost Limit is the concept that includes the maximum amount than each First and Second Division club can be spent on salaries for players, coach, assistant coach and physical trainer (registrable template), as well as in the subsidiary, the quarry and other sections (non-registrable template).

The concept of inscribable sports squad includes the fixed and variable salary payments (whether in cash or in kind such as a home, a vehicle, a trip …), the remuneration for transfers of assets image rights, the amortization of transfers, the fees of Social Security, compensation for the termination of contracts, collective bonuses, aquision expenses when having to pay bonuses to representatives …

Its calculation, as Tebas explained this Thursday together with the general director of LaLiga, José Guerra, to the media in a telematic conference, is made from the difference between income (television, commercials, ticketing …) of structural expenses and the repayment of debt expected throughout the season. From there, it is each club that develops its own salary limit, but must comply with the rules of Economic Control of LaLiga and that, later, It must be approved by the Validation Body. In case of having a salary limit that does not guarantee the stability of the club, this body would reduce it to an amount that if it did.

“We have made changes in three parts of the economic control standard and in our regulations and statutes for COVID. It is a sudden impact and you have to adapt to it so that the clubs can adjust. The sanctions are also modified. We need time to adapt, “said José Guerra, General Director.