Lionel Messi's move to Inter Miami in 2023 sent shockwaves through the soccer world. Arguably the greatest player of all time, Messi reportedly turned down a mega-money move to the Saudi Arabian Pro League, choosing to play in Major League Soccer (MLS) instead. Once soccer fans got over the shock of the nine-time Ballon d'Or winner heading to the United States, many began questioning how Inter Miami could afford to pay him such an enormous salary when MLS operates under a strict salary cap.
MLS does not function like the major European leagues, where clubs can spend freely based on revenue and ownership investment. Instead, the league enforces a structured salary cap to maintain financial parity among teams. The idea is that no MLS team has a significant advantage over another just because the team's owner has deep pockets. However, Messi's guaranteed income during his first season in Miami was over $20 million when a $5.2 million salary cap was in place. How was this possible?
The MLS Salary Cap Explained
The MLS's unique financial system is designed to prevent clubs from outspending each other to acquire top-tier talent. People who know where to bet on Premier League soccer matches find this system alien because, a few financial fair play rules aside, English Premier League clubs are free to spend what they like on players and their remuneration packages. When Messi joined Inter Miami in 2023, the salary cap for each team was approximately $5.2 million. Yet, his official salary was almost $21 million, and his contract is rumored to be worth between $50 million and $60 million per year.
MLS also recognizes that attracting global superstars can boost the league's popularity, revenue, and overall quality. The league introduced mechanisms to enable teams to pay certain players significantly more than the salary cap permits. This is where Messi's Inter Miami contract starts getting interesting.
The Designated Player Rule
The Designated Player Rule is one of the biggest workarounds to the MLS salary cap. It is often dubbed the "Beckham Rule," referencing David Beckham's landmark move to LA Galaxy in 2007. The rule allows all MLS teams to sign up to three players whose wages exceed the salary cap by an unlimited amount, with only a small percentage of their enormous salary counting against the cap.
At the start of the 2023 MLS season, the maximum budget charge for a Designated Player was $651,250 per season. This means that despite Inter Miami paying Messi over $20 million in wages, only $651,250 of that princely sum counted toward the team's salary cap. However, Messi's complete financial package is worth up to $60 million annually, so how does Inter Miami finance that colossal sum?
Exploring Alternative Revenue Streams
A significant portion of Messi's income stems from external deals negotiated in partnership with MLS. Messi's compensation package is unlike anything the league has previously seen; the deal has opened the door for more soccer superstars to head to MLS in their prime rather than when their careers are nearing a conclusion.
Apple signed a 10-year, $2.5 billion deal with MLS in 2023, allowing it to broadcast all league games on its MLS Season Pass streaming service. Messi's arrival in the United States spiked a surge in subscriptions, and he receives a portion of revenue from new subscribers who sign up for the service as part of his contract. Such an agreement means Messi benefits from the global attention he brings to MLS.
Messi's long-standing relationship with sportswear giant Adidas is another crucial factor in how Inter Miami can afford the 2022 FIFA World Cup winner. Adidas has been a league-wide sponsor for MLS since the league's inception in 1996. Messi has been an Adidas athlete since 2006. The Argentinian negotiated a deal that saw him receive a cut of increased revenue Adidas makes from MLS-related merchandise. Adidas supplies kits for all MLS teams, so MLS-related revenue has gone through the roof since Messi's arrival, leading to vast sums of money heading his way.
Future Ownership Stakes
Although most people know Messi for his soccer ability, he is also an astute businessman. Having earned an estimated $1.2 billion during his glistening career, Messi has the capital to launch and invest in businesses. He is involved in sports drinks and the wine industry and owns a restaurant and production company. Messi will likely become an MLS franchise owner in the coming years.
Messi's contract allows him to own a club in the future. David Beckham negotiated a similar deal when he joined LA Galaxy, leading to him becoming Inter Miami's co-owner. Messi is expected to receive an option to buy a stake in Inter Miami at a discounted price once he retires from playing or become the owner of an expansion team should one become available in the future. This gives Messi a vested interest in Inter Miami and the MLS.
Conclusion
Lionel Messi's move to Inter Miami was a landmark moment for MLS and a masterclass in financial strategy. Inter Miami and MLS found ingenious ways to compensate Messi through Designated Player exceptions, revenue-sharing agreements with Apple and Adidas, and long-term ownership incentives. By thinking outside the box, Inter Miami and MLS managed to secure one of the greatest players of all time without breaking their financial rules.
Having a player of Messi's stature has massively enhanced the MLS's reputation and made other teams' signings of global superstars more likely. Until Messi's arrival, the MLS was considered a league where aging stars head to see out their playing careers, their best days well behind them. Now, MLS teams have ways to attract elite-level players who are still in their prime.
In August 2023, British sports analytics company Opta ranked MLS as the 29th strongest division in world soccer. By March 2024, Opta ranked MLS tenth in the world, ahead of the Swiss Super League and the Dutch Eredivisie. Messi's arrival and those of other soccer stars are making the MLS a destination of choice for talented players worldwide, thanks to some financial creativity.