Barcelona's financial crisis has deepened after LaLiga cut another €300 million ($349 million) from their spending limit, with six clubs in the Spanish top-flight now permitted to spend more than them.
The bar for operating costs for Barca for the 2021-22 season has been reduced to €97m, which is almost €650m less than rivals Real Madrid, whose limit has been fixed at €739m.
- ESPN+ viewers' guide: LaLiga, Bundesliga, MLS, FA Cup, more
- Don't have ESPN? Get instant access
Barca's limit for last season was €382m, while the season before that (prior to the pandemic), it was as high as €600m.
LaLiga corporate director Jose Guerra explained that the Catalan club's limit, which is less than clubs such as Villarreal and Real Sociedad, is down to losses of nearly €500m for the previous campaign.
"They acknowledge much higher losses than what they had initially estimated, so the impact is greater on their spending limit," Guerra said in a video call on Wednesday.
"If you take the €97m limit and add the losses, around €480m, we're talking about €570m, which would be more normal. So it's more or less stable."
Barca recently confirmed losses for the 2020-21 season of €481m. That was around €200m higher than had originally been estimated following an external audit by PricewaterhouseCoopers.
Sources told ESPN that was down to president Joan Laporta, who was elected in March, writing off several assets as part of last year's accounts, including amortisation payments due on certain players, to help the club return a profit this season.
Therefore, the club expect their spending limit to be significantly increased next season, although Guerra warned that past losses will still be considered moving forward.
However, Guerra added that due to the unforeseen effects of the pandemic, Barca are not in danger of being punished in the short term, although the league will need to see justification of the damage done by COVID-19.
In practice, Barca's wage bill will remain much higher than €97m this season, despite their best efforts to reduce it in the summer by letting Lionel Messi and Antoine Griezmann leave.
Laporta revealed recently that salaries and amortisation payments still account for around 80% of the predicted revenue of €765m for the season.
The league's economic controls demand that figure is around 70%, although Barca's is even lower this season as they must make amends for recent losses. Gross debt, meanwhile, stands at around €1.4 billion.
In the meantime, Barca will be able to spend only 25% of what they save in wages or make in transfer fees on registering new players or making signings, a rule they had to adhere to this past summer.
Despite all that, Guerra still maintains the club could have kept Messi, who left for Paris Saint-Germain in August, if they really wanted to.
Barca rejected the league's deal to sell 10% of its business to CVC Capital Partners, which would have seen their limit increased. Of the 20 clubs in LaLiga, 17 signed the agreement, with Madrid and Athletic Bilbao also snubbing it.
"I think there were solutions that could have kept Messi at the club, it was the club's management that decided to use their resources differently," Guerra said. "I don't think it was just a question of their finances."
Guerra also said that Madrid's limit, which is now over €500m higher than any other team in Spain, has been boosted by the club's decision to add over €200m in previous savings.
That means the club are in a position where they have more than enough capital to sign PSG's Kylian Mbappe, who they bid around €200m for in the summer.
"They would have no problem whatsoever," Guerra said. "They were ready for Mbappe or any other player."
LaLiga's spending limit accounts for the maximum amount clubs can spend on wages, bonuses and amortisation payments on transfers, not how much they are necessarily spending.
Sevilla have the second-biggest ceiling in the league at €200m, followed by Atletico (€171m), Villarreal (€159m), Real Sociedad (€127m) and Athletic (€111m).
Valencia, meanwhile, the Spanish champions in 2004, have the smallest limit in the league. Los Che, who like Barca have seen debt spiralling at an alarming rate during the pandemic, can only spend up to €31m, in comparison to €103m 12 months ago.