MADRID : Real Madrid's spending limit for this 2021-22 season is almost eight-times (650 million euros) higher than that of Barcelona's, LaLiga announced on Wednesday.
The Spanish football league, who have their own financial controls in place, allow teams to spend a certain amount on new players, signings, salaries, coaching staff and their academies relating to income and losses - with almost all sides impacted by the COVID-19 pandemic.
Barca, who are in a financial meltdown after reporting losses of 481 million euros earlier this year, have seen their spending power drop from 347 million euros per season to just under 98.
Such a small limit helps explain the club's decisions to allow Lionel Messi and Antoine Griezmann leave in the close season, as well as their recent need to get senior players to agree to wage cuts.
Barca's budget is also because of huge losses and breaches of spending limits over the past few years and the Camp Nou outfit have taken the decision to make this season's losses as big as possible so they can increase their budget for next term.
That figure means they have almost 650 million euros less to spend than Real, whose salary limit - the highest in LaLiga by some distance - increased to almost 740 million for this term, up from just under 470 last year.
Real's figure is so high because of prudent financial management, as well as profits from player sales and coming in under budget in past seasons.
Their base budget was 428 million, to which they added from their own reserves of funds a further 292 million - which would have allowed them to sign Paris St Germain striker Kylian Mbappe for a reported 200 million euros and still have been within the league's spending limits.
Neither Barca nor Madrid, as well as Athletic Bilbao, accepted a cash injection from private equity company CVC through LaLiga in return for a percentage of their future broadcast rights.
Barca's drop means that they only have the seventh-highest permitted wage bill in the top flight, behind Real, Sevilla, Atletico Madrid, Villarreal, Real Sociedad and Athletic Bilbao.
Elsewhere, the lowest budget in the league is Valencia's 30 million, with Los Che hit hard by the pandemic and poor league performances resulting in a lack of European football.
(Reporting by Joseph Walker; Editing by Christian Radnedge)