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Weakness of pound strengthens Barcelona’s leverage on Fabregas

The rumour mill surrounding Cesc Fabregas‘s reported desire to leave Arsenal to return to his home-town team Barcelona has cranked into high gear over the course of today.

As always, it’s difficult to sift fact from fiction. Certainly Barcelona are spinning their side of the story, while Arsenal remain tight-lipped. (Which is probably the best course of action, as the potential selling club is always caught in an impossible position once the media maelstrom has gathered its inevitable momentum.)

Whatever the veracity (or otherwise) of the rumours currently doing the rounds, most Arsenal fans would accept that Fabregas will undoubtedly return to the Catalan club at some point in his career. But only the most pessimistic will have expected a move this summer.

The numbers favour Barcelona

First and foremost, Barcelona are one of the few clubs who can afford to mount a serious bid for Cesc. Having spent a king’s ransom last summer on Zlatan Ibrahimovic in a complex multi-player deal which valued the Swedish striker at €66m, and with lucrative commercial revenues guaranteed from TV and sponsorship deals, Barca have extremely deep pockets.

Furthermore, their financial leverage over British clubs is substantially increased by the weakness of sterling against the euro. £1 is worth just €1.17 today, versus €1.46 on this day two years ago. That’s a swing of 20% in favour of the euro.

What this means in real terms is as follows. For sake of argument, let’s say Arsenal put a valuation of £40m on Fabregas. Two years ago, that would have cost Barcelona €58.4m; today it is just €49.9m, meaning Barcelona could effectively save themselves €8.5m solely based on exchange rate fluctuations. Or, alternatively, they could employ the extra leverage that their €8.5m ‘saving’ provides to meet any potential increased valuation.

The same applies when it comes to offering attractive wages. Fabregas is reportedly on £110k per week at the Emirates. Two years ago, this would have translated into €161k pw on the continent, and Barcelona would probably have had to offer considerably more. But that same euro salary is now equivalent to £137k pw at today’s rate. In other words, if Player A in England and Player B in Spain had been on exactly the same salary two summers ago, Player B would now be earning 20% more by virtue of being paid in euros rather than pounds.

I haven’t finished yet. Let’s also not forget that Premier League players now pay the increased rate of top-level income tax, 50% rather than 40%. That means a player on £110k pw now pays around £55k pw in income tax, whereas before it would have been £44k. So, even putting aside the 20% weakening of sterling versus the euro, a Premier League player’s basic take-home pay is theoretically 20% less as a result of the change in the tax regime. (Of course, clubs have all kinds of clever means of shielding their players’ salaries from tax to minimise their exposure to the HM Revenue & Customs, but even so it has a significant impact.)

In short, Barcelona are an immensely rich club, whose bargaining power – on both transfer fees and wages – is effectively increased by as much as 20% when dealing with English clubs.

A misplaced question of loyalty

Putting aside financial considerations, there is also the question of whether Fabregas ‘owes’ Arsenal his continued loyalty. My head, sadly, says not.

Remember, we are talking here about a player who left his home to go to a foreign club, where he has given his all for seven years, and who (reportedly) now wants to return home in search of glory. Seriously, can anyone really blame him if that was his desire? He has always given Arsenal 100%. He is entering his peak years – both in terms of his ability and his earning power – of a career which, if he is lucky, will last at most another 10-12 years. And he is not talking about shopping himself around to the highest bidder, but merely about returning home.

If it were you, if you had been working abroad for seven years and then received an offer from a more successful company at a significantly increased salary, would you say no? Really?

Don’t get me wrong, I desperately want Cesc Fabregas to remain at Arsenal for as long as possible. But, given all the above considerations, is it reasonable to expect Cesc to stay when both his wallet and his heart tell him that returning home may be the best thing to do?

I’m not resigned to Fabregas leaving Arsenal by any means. But, in a World Cup summer after a season – the fifth straight without a trophy – where his current club was effectively dismantled by his Catalan suitors, and where the vagaries of financial markets are stacked very much in favour of Barca, am I worried? You betcha.

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About Tim
Father of three. Bit of a geek. That's all, folks.

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