COLUMN: La Liga Salary Limits – How Much is Too Much Economic Control?

As part of their usual economic control measures, La Liga announced Thursday last week the new and updated salary limits for the 2023/24 season. Unsurprisingly, the news and discourse on this subject often focused on FC Barcelona. The Catalan giants have seen their salary limit drop from €656m in the 2022/23 season to less than half of that amount this season, €270m.  

A reduction in salary limit was expected at Can Barca since the lever mechanisms used last year to boost revenue were one-time cash injections. However, the drop was worse than expected due to several factors, including issues with the payments of the levers and the major reduction in matchday income with the move to Montjuic, while the Camp Nou is renovated. This means that Barcelona has significantly exceeded its salary limit, and is subject again to La Liga’s spending controls. This situation will complicate the registration of new players in the winter, affecting the expected arrival of Brazilian striker Victor Roque. 

For the current season, clubs over their salary limit can spend just 50% of any savings they make on new players. This spending can increase to 60% if the arriving player accounts for more than 5% of the club’s total wage bill. La Liga’s spending controls typically used a 1:4 rule—only 25% of savings can be used on new players. However, the league has softened up this rule as Spanish clubs experienced sharp drops in revenue during the pandemic years and have struggled to recover that revenue afterward and stay within their salary limits. 

While Barcelona’s salary limit reduction has been the most prominent case, it is far from the only one. Twelve out of twenty teams in La Liga have seen their salary limits reduced this season. As a whole, La Liga has seen its salary limit reduced from €3.052b last year to €2.564b this year. Even Segunda has been affected, with their salary limit dropping from €211m last season to €180m this season.  

Aside from Real Madrid, all the Spanish clubs that play in Europe – Barcelona, Atletico, Real Sociedad, Real Betis, Villarreal, Sevilla, Osasuna – have seen a salary limit reduction this year. Without specifying names, La Liga president Javier Tebas stated that eleven clubs had exceeded their salary limit this 2023/24 season. We know that FC Barcelona, Sevilla, and Real Betis are included in that list.  

These numbers paint a bleak picture of the spending power of La Liga clubs, so I will try to balance this out by giving a few upbeat numbers for the last ten years. 

On their website, La Liga states that the debt owed by Spanish first and second-division clubs to government entities (i.e., taxes) has gone down from €650m in 2013 to just €23m in 2021. Spanish clubs are very much up to date with the tax agency now. Furthermore, complaints from players over non-payments have fallen drastically, from €89m in 2011 to just €1.5m in 2021. Most of the current complaints stem from conflicting interpretations of criteria, rather than an inability to pay from the clubs.  

La Liga is the most sustainable it has ever been. In the past, a catastrophe like the pandemic would have likely wiped out a few Spanish clubs. They are certainly struggling right now, but La Liga’s economic controls prevented the pandemic from becoming an existential threat to clubs. 

However, La Liga del Control Economico is much harder to market to the fans than La Liga de las Estrellas. Optimising for sustainability means weakening spending power, at least in the short term. Many La Liga fans see that a relegation-level side in the Premier League can easily spend more than a Spanish side that plays in Europe, and inevitably wonder why their league looks quite as thrifty as it does.  

Alas, make no mistake: Premier League clubs might be swimming in money right now, but their model is not sustainable. The English model, with little economic control, has maximised club spending power but has also vastly inflated player wages and transfer fees.  

The model is based on the virtuous cycle of more star players bringing in more broadcasting revenue and vice-versa. Yet, Premier League domestic broadcasting rights are already stagnating, and you better hope that doesn’t happen with foreign broadcasting rights anytime soon. If broadcasting revenue stagnates, and the uncontrolled spending continues, the only way the Premier League remains solvent is to get investors to keep pumping more money into it. Such a scenario likely leads to a league in which the only investors left are nation-states and obscenely rich people who want to sportswash their image. 

There is no magic formula that maximises both sustainability and spending power. These two aspects are not entirely mutually exclusive, but improving one usually makes it harder to improve the other. La Liga authorities want to keep focusing on sustainability, while many clubs and their fans want to focus now on improving spending power. While Spanish clubs usually agree that some degree of economic control is necessary to curtail all the debt and mismanagement, the point of a football club is not to maximise profits but to bring fulfillment to their communities. 

That’s the tug of war we find ourselves in now: will La Liga yield to pressure from fans and clubs and soften their financial rules more permanently? La Liga ultimately belongs to the fans and their communities, not to Javier Tebas, so it makes sense for them to get what they want. However, as my fellow columnist Kai Iliev pointed out, it might also be healthy for these fans and communities to stop comparing themselves to the Premier League and focus on developing La Liga’s own model and strengths. Sustainability can be one of those strengths.