Barcelona’s salary cap of €671.4 million for the 2019/20 season has been reduced to €382.78 million for 2020/21, which represents a 57 per cent drop. On the other hand, Real Madrid decreased their cap by 25 per cent from €641 million to €468.5 million.

Barca and Real Madrid should prepare for the year of transition

LaLiga announced on Tuesday a completely new cost-saving initiative, with the salary cap being sharply cut for teams and Laliga president Javier Tebas warned Barcelona and Real Madrid to prepare for the year of transition. Barcelona’s salary cap of €671.4 million for the 2019/20 season has been reduced to €382.78 million for 2020/21, which represents a 57 per cent drop. On the other hand, Real Madrid decreased their cap by 25 per cent from €641 million to €468.5 million. Tebas explained the situation in a video conference on Tuesday afternoon, and details were released that showed Spanish clubs have already cut costs by 18 per cent from the 2019/20 season.

Barcelona could face bankruptcy

“In the worst-case scenario, that we don’t have fans until the end of the season, there is a high staff cost of €707 million,” Tebas said. “It doesn’t affect everyone equally, the more the club, the more it affects them. I feel free to warn Barcelona and Real Madrid that they have to prepare themselves to live through the transition year. Both clubs have to take the bull by the horns and build the right economic structure”. When Barcelona faced potentially catastrophic consequences if they did not turn their finances, Tebas indicated that the Catalan club would have to face a new reality. “Barcelona saw their incomes reduced by 30 per cent and they have to adjust, they will have a transition year,” he added. “At the moment Barcelona are not considering bankruptcy. But what they don’t reduce this year will affect their budget next year.”

Clubs that are unable to adjust their wage bills to comply with the new guidelines will then see their cap changed for 2021/22 based on the amount by which they exceeded the 2020/21 cap imposed by Tebas during Tuesday. “Those clubs that do not cut their wage bill insufficiently will have two problems,” he confirmed. “One is their economic control, which will punish them next year if the team reaches €50 million this year, they will have €50 million less. If you want to be competitive, you have to tighten your belt. And the second problem is the treasury, where some clubs have a lot of debt.”