Bavarian Legal Works - I want to break free: The Lionel Messi case

After seeing his team shattered in a dramatic Champions’ League loss to Bayern Munich, it seems that Lionel Messi has reached the end of his road with his club Barcelona. The media is rife with the news that Messi wants to leave his club and has sent a now near-legendary “burofax” to his club to advise them he wishes to activate his option to leave the club on a free...effective immediately.

Messi’s bolt for the door faces a significant obstacle, though. It is widely reported that the clause in his contract that would allow him to leave Barcelona on a “free” had to be activated by June 10 of this year to be effective. Messi missed that date (by a long shot) and thus Barcelona takes the position that his contract remains fully in force and that if Messi wants to leave his new team will either have to negotiate a deal with them, or pay his 700 million euro release clause.

The issue has become heated, with La Liga even throwing in their two cents work, announcing that on their view of the contract Messi’s new team has to pay the release clause. If they don’t, the league will not facilitate the transfer by de-registering Messi. Why La Liga felt the need to make such a public announcement is a mystery, but the big question remains, who is right? Has Messi’s contract with Barcelona been terminated? Messi is acting like it is a done deal by failing to appear for mandated medical testing but does he have a legal leg to stand on.

Messi’s “Four Corners” problem

Contracts are designed to provide certainty and courts are loath to go down the road of trying to read the intent of the parties beyond the simple words on the page. Messi’s team suggests that since when the contract was signed, the “intent” was to allow the player until the end of the season to make a decision if he would stay or go. Messi’s team will argue that since the CL final was originally scheduled for May 30, 2020 that the “intent” of the contract was to allow Messi eleven days after the completion of the competitive season to decide to stay or go. The team will argue that the effective date should be eleven days after the CL final date of August 23, 2020.

Their problem is that there is no ambiguity in the date of June 10, 2020 to argue about. The first rule of contractual interpretation is that the plain words are binding unless they are unclear, statute barred or ambiguous. There is nothing remotely unclear about a simple date like June 10, 2020 that would allow a judge to go outside what is written on within the “four corners” of the legal document to embark on a speculative analysis as to the parties intentions when the signed the contract.

But what really is a season?

For the sake of discussion let’s say Messi’s lawyers get in front of a very friendly judge who someone finds ambiguity or some sort of statutory loophole to allow him to go beyond the named date (it is actually possible but it would take too long to explain why here). Does that mean Messi is free to go play for his dream club of Rapid Vienna? Probably not.

Even when a court decides to go beyond the text of the agreement into a intention analysis, they simply cannot substitute their own view of the parties’ intentions in a vacuum. Barcelona has a strong argument Messi has missed the window even if June 10 is not binding. Barca will argue that the contractual season actually ends on June 30, 2020 according to international football rules and practices. Thus, their position will be that the June 10 date does not represent eleven days after the end of the competitive season, but that since it is a contractual clause (not explicitly tied to any one competition) that it represents a date 20 days before the contractual season ends. Their position is that if intention matters, and if the new season end should be August 23, 2020 that Messi’s new out days should be 20 days before the end of the season, which means he would have had to activate the clause by Aug 3, 2020, which he did not.

Restraint of Trade Argument

Under Spanish law, release clause quantum cannot be set arbitrarily. They must represent the commercial value loss of the player to leaving his club. To put it simply, if a court concludes that the real purpose of a release clause quantum was to stop the player from leaving under any circumstances, the clause can be re-evaluated by the court. But even if Messi wins that argument the court would just set a new release clause figure rather than void the clause. When looking at the value of a player, the court looks at his salary and would compare it to industry standards. With Messi making over 100 million euros a year, his release clause is not on its face abusive when you consider other release clause to salary ratios we have seen recently (including our own Lucas Hernandez). Messi really doesn’t have much to go on here either.

The Bottom Line

Chances are none of this ever ends up in a court, but the strengths and weaknesses of the respective legal positions are a factor in the negotiations that will unfold over the next few weeks or months. On the legal side, Messi has a weak hand. On other issues though Barca management is in a bind. Do they want to be known as the group who forced Messi to stay when he didn’t want to, or do they want to be known as the group who sold the man who epitomizes their club? It’s a PR nightmare either way.

Bonus Fact: A burofax is not a “fax” as in facsimile transmission. Rather it is a specialized from of registered letter used in Spain to prove the nature and delivery of the contents of a legal notice.

Next up on Bavarian Legal Works we will take a deep dive into why the CAS made a historically bad and technocratic decision on the Manchester City case.