A teary-eyed Lionel Messi said goodbye to Barcelona after spending over 2 decades at Camp Nou. Barca sent shockwaves across the football world when announcing that they couldn’t afford to re-register the 34-year-old winner last week, and PSG have moved quickly to secure the services of the six-time Ballon d’Or winner. Messi who came to Barcelona as a 13 year old said goodbye to the club after 21 years, and would be considered as the first high profile casualty of Financial Fair Play (FFP) regulations.

What is Financial Fair Play?

Financial Fair Play was introduced by the Union of European Football Associations (UEFA) in 2010. The premise was simple. Many European soccer clubs were in massive debt because they spent inordinate amounts of money on players, staff etc. in the hopes of winning competitions. In reality, most of them just ended up in massive debt. UEFA recognized this and introduced FFP as a safeguard to protect clubs and overall, the health of the game in Europe. The rules are quite clear: Depending on the amount of debt a club owes there is a limit on how much they can spend on transfers and/or player wages etc. Poor management of transfers and the losses from Pandemic have only made things worse for various big names in the sports industry and FC Barcelona was no exception. It is evident from the fact that even with Messi willing to take a 50% pay cut; the club would still have been in breach of FFP regulations. This is because without Messi on their books the club would still hold wages that are 95% of club’s earnings way above the recommended 70% by La Liga. Financial Fair Play regulations have been mocked at times by the football community. If the FFP regulations can prevent Messi from staying at Barcelona, then every other club around Europe is on notice now.

Icing on the cake :Intellectual Properties Implications of the transfer

Spanish football club FC Barcelona could see its brand value fall by €137m in the wake of the departure of Lionel Messi. Messi has trademark portfolio of 136 marks, which is bigger than any other football player and his next move will be a commercial boon for PSG.  Of those, a majority (80) are single class trademarks in his home country of Argentina, with 22 being in China, seven in Brazil, EU and Malaysia, six in the UK, three in Spain, and other single marks in Canada, Chile, and the US. The most common goods and services represented in Messi’s trademark portfolio are class 25 (clothing and footwear), class 28 (games, toys, and sporting apparatus) and class 9 (computer software).

“Messi is synonymous with the Barcelona brand and has been the club’s talisman since bursting onto the scene 15 years ago. His presence at the club has no doubt allowed it to attract additional fans, better players, managers, commercial deals, and win silverware. His departure can cost the club as much and result in a painful brand value decrease”, said Brand Finance’s head of sports services Hugo Hensley.

Why not play for free? Would it be legal?

It was a common question from a majority of fans of the Spanish club and the Argentine, as to why Messi didn’t just play for Barcelona for free.

The reply would be a big NO, both morally and legally. Morally, it would be shameful for one of the best player in the world to play for free. It would not only be unethical but might also undervalue the player’s contribution to the Spanish club. It would also be legally impossible. The Spanish employment law states that any new contract, by Spanish law, is required to be a minimum of 50% of the previous wage. This law is precisely to avoid any kind of financial manipulation. So, even after cutting down on his wage by 50%, Messi could not have continued at Camp Nou as the Barca’s wage budget is limited to just 200 million euros. Even if Messi had been prepared to accept a bigger salary reduction than 50 per cent, it would not have been legal under Spanish law.

A Legal complaint against PSG for violating Financial Fair Play Rules

A last resort by Spanish fans In the Barcelona member’s legal complaints, shared by the fan’s lawyer, the member claims that French football authorities have failed to enforce their own financial fair play (FFP) rules in order to help PSG become a force in European football.However, the PSG President insisted that the new signing does not break FFP rules. The arrival of the Argentina star comes after the club signed Achraf Hakimi from Inter for €60 million (£52m/$71m) as well as Sergio Ramos, Georginio Wijnaldum and Gianluigi Donnarumma this summer. Although the specifics are not known Al-Khelaifi said that “Regarding the financial aspect, I will make it clear: we know the rules of Financial Fair Play and we will always follow the regulations. Before we do anything, we check with our commercial, financial and legal people.”

Conclusion: The road ahead for FFP Rules

Messi’s parting away from Barcelona has ensured that FFP rules are not just on paper but can have serious consequences in the fate of the club and sport as a whole. Although Football’s financial fair play rules are to undergo dramatic change, with the key break-even measure declared purposeless” by UEFA. With Covid-19 creating a crisis “very different from anything we have had to tackle before”, according to officials, they believe new rules should concentrate on clubs’ wage levels and the scale of fees in the transfer market. UEFA has begun consultation on how to reform FFP, with Andrea Traverso, UEFA’s director of research and financial stability saying he expected an “expedited but careful” process to be completed by the end of the year. “Those that are saying that the rules will be abandoned or relaxed are just speculating,” Traverso said. “Rules can be different, sure, but this does not necessarily mean that the rules will be less stringent. On the contrary, when severe situations occur often those necessitate stronger measures.”