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Lionel Messi will re-sign with Barcelona, but the club's financial problems aren't over yet

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How Barcelona made Messi's extension work (1:27)

Sid Lowe breaks down how Lionel Messi came to terms on his extension with Barcelona. (1:27)

Barcelona have reached an agreement in principle for Lionel Messi to sign a new five-year contract, sources confirmed to ESPN on Wednesday, but that doesn't mean the club's problems are solved.

They still have a gross debt of €1.2 billion, and if La Liga started tomorrow, the 34-year-old club legend would not be able to play because Barcelona would be over their salary cap. Getting Messi to commit to terms that include a "significant pay cut" was one thing, but the club's biggest hurdle is making enough room on their wage bill to register him by the time the new season starts in one month. (Stream live and replays on ESPN+ in the U.S.)

La Liga president Javier Tebas has warned Barca they must reduce their expenditure markedly to register not just Messi's new contract but those of their other new signings too. Sergio Aguero, one of Messi's longest-serving friends in football, as well as Eric Garcia and Memphis Depay, arrived on free transfers, but if Barca cannot cut enough -- roughly another €100m -- they will not be able to inscribe them for the new campaign. And they will have to let other stars go as well, including one of their highest earners, Antoine Griezmann.

Since July 1, Messi has been a free agent. He won the Copa America with Argentina -- his first senior international title -- but until his signature is officially on that new contract, he is unattached at club level. Barca's record appearance holder and top goal scorer of all time is technically no longer a Barca player. He's picked up 34 team trophies wearing a Barca shirt and six Ballons d'Or, but now, after 20 years at Camp Nou, there's nothing to officially link him to the club for the first time since Carles Rexach, Barca's onetime sporting director, famously improvised a contract on a napkin to assure Messi's family they would sign its adolescent son in 2000.

The return of Joan Laporta as president, a role he held when Messi first broke through, is a major reason the Argentine now wants to stay. Messi openly feuded with the previous president, Josep Maria Bartomeu, and said he wanted to quit Camp Nou last summer. Slight improvements on the pitch have also helped. Barca won the Copa del Rey and have brought in new signings, while young star Ansu Fati is also due back from a long-term injury. Laporta said the best way to persuade Messi to stay is by building a squad capable of competing on all levels, not by chucking money at him.

With this week's agreement, Barca no longer have to fear a scenario in which Messi moves elsewhere, and sources have told ESPN there is confidence "everything will come together." But the club are facing some big decisions to make the numbers fit. So whom must they sacrifice to make room for Messi's salary? And would it not have been a quicker fix to let the veteran leave on a free transfer now and to accelerate the rebuild that started last summer?

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Will Barca meet La Liga's spending limits?

Every club in the Spanish league is given a spending limit at the start of the season, and it is updated again for the January transfer window. The limit is roughly calculated by taking a club's revenue and subtracting the structural costs and debt repayments planned for the forthcoming season. (Barcelona predicted over €800m for 2020-21 but admit it will be much lower in the end, although official numbers are not yet available.) The final number covers the wages paid to first-team players and coaching staff, academy costs, amortisation payments on transfers and agent fees.

Before the pandemic, in the summer going into the 2019-20 season, Barca had the league's highest limit at €671m, thanks to revenue approaching €1bn. By January of this year, their cap had dropped to €347m. Neither Barca nor La Liga would confirm the limit for the new season to ESPN, but some reports suggest it will be around €200m.

Sources at Barca said that revenue has been affected more than at other clubs during the COVID-19 pandemic because they previously generated so much money on matchdays and from tourism. Empty stadiums and the closure of the club's shops and museum, for example, have hit them hard. Tebas, meanwhile, insists that Barca are struggling more than other clubs, such as rivals Real Madrid, because they have maximised their spending limit in recent years.

"The big difference is that Barca have always been at the limit in terms of wages," Tebas said last week. "When the pandemic came along, they didn't have that buffer. No other clubs have pushed it to the absolute limit like them. They have lost €350m in revenue during the pandemic. It is not normal, especially in our league, to push right to that last euro. Madrid had limits and they have been less affected by the pandemic."

Indeed, Messi's last contract was the biggest ever signed by a professional athlete. Over the course of four years, including signing-on fees, potential bonuses and his salary, it was worth over €500m. Tebas told ESPN on a call last week it would be "impossible" for Barca to pay Messi the same wages this season while remaining within their league-imposed salary limit.

Last year, Messi's €72m a year was 20% of Barca's €347m spending cap. If that cap drops as low as €200m next season, it would still represent around 18% if his agreed pay reduction is around half his old salary. Sources said his new deal is staggered so he is paid less in the first year than the fifth, but it still leaves over €100m in the wage bill to reduce before you even take into account what the club will give Aguero, Depay and Garcia.

And if you think that it's normal for clubs to flout spending caps, it's not. It might not have happened with a player as big as Messi, but there's precedent for La Liga refusing clubs permission to register players. In 2014, Getafe were unable to inscribe Pedro Leon because they had breached their spending cap. He spent five months on the sideline before the issue was resolved.

Which players could leave to balance Messi's new deal?

Now that Barca have reached an agreement with Messi, at some point they need to present the numbers to the league, which then needs to verify that the club are not in breach of their spending limit. There are effectively two ways Barca can make enough room to register his new contract with the league next season: through increasing revenue and reducing the wage bill.

One of the first things Laporta's board have done is secure a loan from Goldman Sachs worth €525m. That money will not be used to pay Messi's new deal, but it will, in part, be used to restructure some of the club's debt. Short-term payments will be replaced by longer-term payments, meaning debt payments won't knock as much off the club's spending limit as they would have for the upcoming season. The loan has also been used to pay players their backdated wages after they agreed deferrals last November.

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The main area where Barca can make room to register Messi and the new signings is through the transfer market. The club have already moved on a handful of fringe players, including United States winger Konrad de la Fuente, Jean-Clair Todibo, Carles Alena and Junior Firpo, for around €35m. Francisco Trincao's wage has also been saved with his loan move to Wolverhampton Wanderers, while the Premier League club have an option to sign the winger permanently next summer for around €25m. Matheus Fernandes, meanwhile, had his contract terminated via email this summer and has returned to Palmeiras, his old team. Sources said the Brazilian midfielder, a €7m signing during the Bartomeu era, is considering suing the club for the manner of his dismissal.

Even with an estimated saving of €15m in wages from these players, that's nowhere near enough business. Tebas insists that for every €4 Barca save, they will be allowed to invest €1. That will remain the case until they adhere to their new spending limit.

"For example, if the players Barca have at the moment, Aguero and others, are going to cost €50m for next season, it means €200m has to be cut either in salary cuts or in terms of transfers," Tebas said.

On a financial level, the easier option might have been to accept Messi leaving. The complicated route, the one Laporta has pursued, is opening the floor to offers for most of the squad in a bid to keep Messi as the leader of an emerging team of youngsters like Frenkie de Jong, Pedri and Ansu Fati.

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Would Griezmann have to take a pay cut if Saul swap deal happens?

Gab and Juls discuss the possibility of a swap deal between Antoine Griezmann and Saul Niguez.

The quickest way to save money in the short term is to let Griezmann depart. Sources admitted to ESPN that it's "almost impossible" to keep Griezmann and Messi and comply with the league's cap. One source even said it's "one or the other." With Messi staying, that means Barca are working hard to move on Griezmann, who could return to Atletico Madrid, the club he joined Barcelona from for €120m in 2019.

Sources confirmed to ESPN on Wednesday that Barca and Atletico have held talks over a swap deal that would see Griezmann return to Madrid and midfielder Saul Niguez move to Barca. There's willingness from all four parties for a deal to be done, but a lot of work is needed to get it over the line.

That deal would have to be similar to the accounting trick performed by Barca when they signed Miralem Pjanic for €60m from Juventus, with Arthur Melo moving in the other direction for €72m. Griezmann's transfer fee would have to bring in around €72m to avoid losses on the amortisation payments; Barca believe Saul's value should be much lower than that.

The problem is Atletico don't have loads of money, either. Other players have also been discussed, including left-back Renan Lodi, but getting rid of Griezmann only to sign two players from Atletico doesn't help lower Barca's wage bill significantly. And even if Barca can shift Griezmann's estimated €30m gross salary, with Saul earning much less, there is still more work to be done.

Meanwhile, Barca are struggling when it comes to offloading the other bigger earners. Sources said it's proving tough to find clubs willing to take on the salaries paid to the likes of Samuel Umtiti and Philippe Coutinho. One agent told ESPN that every club in Europe knows how "desperate" Barca are. Umtiti earns around €12m gross, and Barca hope to find a loan move for the French defender. A source close to Coutinho, who earns around €20m gross, said he is willing to move if the right offer comes along, confirming interest from AC Milan, but the Brazilian hasn't played since December because of a knee injury.

Despite being signed only last summer, Pjanic has also been told he's surplus to requirements. Sources told ESPN that the 31-year-old is talking with "big clubs" in England, Italy, France and Germany and is open to moving, having hardly featured under Ronald Koeman. Backup goalkeeper Neto and striker Martin Braithwaite could also leave.

Winger Ousmane Dembele is set to stay for now after getting injured with France at Euro 2020, and a source close to defender Clement Lenglet said he, like left-back Jordi Alba, has no intention of leaving.

Barca are also pleading with players to take wage cuts. Lenglet, De Jong, Gerard Pique and Marc-Andre ter Stegen all signed new deals at the end of 2020 that were adjustable to help the club deal with its financial crisis and the COVID-19 pandemic. Barca hope academy graduates Alba, Sergio Busquets and Sergi Roberto (the latter of whom has a deal that expires in 2022) will agree to similar terms.

Also on the table is the chance to sell a stake in Barca Corporate, a subsidiary business that houses the Barca Academy project, Barca Innovation Hub, Barca Licensing and Merchandising (BLM) and Barca Studios. But sources admitted there are doubts about pursuing that option because selling merchandising rights could be a case of getting short-term wins but struggling in the future.

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How Lionel Messi finally won a trophy with Argentina

Alejandro Moreno breaks down Argentina's 1-0 win over Brazil in the Copa America final to end a 28-year trophy drought.

Should Barcelona have let Messi go?

The elephant in the room is this: Could Barca have fixed all their financial problems by not re-signing a 34-year-old Messi? His previous salary, not even touching on bonuses, signing-on fees and loyalty payments, was worth around €72m gross each year.

The structure of Messi's new deal will actually benefit both parties. While Messi has agreed to a substantial pay cut that will see him earn less in the first year (around €20m), he has secured a five-year contract. That means what he might have previously expected to earn over the course of two or three years will be paid over five. Will he still be playing when he's 39? Maybe. But the agreement allows him to be compensated in a way that allows Barca to spread the payments out over a longer time frame.

Could Barca have survived without Messi in the team? Sure, there's no shortage of attacking potential and young promise at the club, but it's not a question, publicly or off the record, Laporta and his board are willing to address. They still see Messi, the player of the tournament and top scorer at the Copa America this summer, as the best in the world.

Off the pitch, he's of seismic importance to the club, too. When the details of Messi's €500m-plus contract were released earlier this year, Catalan media rushed to his defence. They explained that the money he brought into the club in terms of sponsorship deals, merchandising and more covered his salary. Laporta has claimed Messi generates a third of Barca's income, which was €855m in 2019-20.

Messi is just as important to La Liga, too, although Tebas insists it will not be one rule for Barca and Messi and another for the rest.

"There are regulations that exist and must be abided by," he said. "They have to adapt and find a solution within them. I have talked about that with [Laporta]. When the Italian [league] took Cristiano Ronaldo [when Juventus signed him from Real Madrid for €100m in 2018], they said to me broadcast rights would go up. They have just lost €200m on international television rights and on a national level it's 10% down. It's similar with Neymar in France. I would be sorry if Messi left, he's the best ever, but we should not become obsessed with [individual] players."