Covid uncertainty means permanent change for managers

Shifting power dynamics between leaders and staff highlight the need to accept that nothing is fixed

Ravi Mattu 

The line between personal and professional lives has blurred © Anadolu Agency/Getty


Early in the pandemic, before Europe and North America had been hit by coronavirus, colleagues and friends would ask me what to expect.

I’m based in Hong Kong, which was hit earlier, and people were already wearing masks and avoiding crowded spaces after reports of a mystery illness in Wuhan. 

Companies anticipated disruption and locals prepared for the worst.

This month, the city gave an indication of what to expect in the next phase of the pandemic, when authorities banned all flights from the UK. 

This came not long after quarantine requirements for arrivals had been eased. 

Many Hong Kong residents had already travelled to Britain and were stranded.

Such a scenario before the pandemic would have been a management nightmare and may have led to repercussions for staff. 

Now, accustomed to uncertainty, many employers are sympathetic and helped employees to get home via Spain or Thailand.

Hong Kong’s policy reversal on UK flights was a reminder that the pandemic is not close to over — even as the UK and others lift restrictions. 

It also shows how the relationship between employee and employer has changed fundamentally. 

The line between personal and professional lives has blurred, staff feel empowered to make demands of managers and leaders have to try to balance empathy with maintaining performance.

The obvious lasting shift will be to more flexible work arrangements. 

In a working paper for the US National Bureau of Economic Research, Jose Maria Barrero, Nicholas Bloom and Steven J Davis describe the pandemic as “a mass social experiment in working from home”. 

They find the practice increased from 5 to 50 per cent in the US and expect it will settle at about 20 per cent after the crisis.

Bloom explains that almost no employer “wanted this to happen” but efficiency exceeded expectations and most employees want to maintain a hybrid work model.

Human resources executives say flexible working is no longer just a perk. 

“The old model is shot,” says a talent acquisition executive at a data company, adding that all potential hires now ask about flexibility. 

“The more hard a line you take, the less competitive you become,” he says and suggests that the back-to-the-office mandates of Wall Street banks may make European rivals more attractive.

Naomi Shragai, an executive coach and psychotherapist, says managers too often swing between extremes of being too controlling and completely hands off. 

Instead, they need to allow autonomy within a set of performance parameters. 

“People still like to work with boundaries, to know what’s expected of them,” Shragai says.

Anne Helen Petersen, co-author of Out of Office, a book on flexible work, says that smart organisations are trying to understand how to manage without direct sight lines.

“After they figure out the hours, and the days, and the location, what happens to hierarchies, to pay, to communication strategies, to barriers instead of boundaries, to hiring and promotion and retention stats?” she writes in a blog post.

These shifts bring their own challenges for staff as well as managers. 

Understanding corporate culture, for example, is much harder, especially for new hires. 

A senior executive who has switched employer twice during the pandemic says this has been very hard to do online. 

“The trouble is that in organisations with a deeply entrenched culture, you’re at risk of being less successful because you won’t see the triggers,” she says.

Employees will also have to do a better job of balancing their needs with those of the wider organisation. 

One HR executive warns against an emerging “entitlement culture”, whereby staff exploit generosity. 

For example, much focus during the pandemic has been on the challenges faced by workers with children, but the executive says that will need to evolve to give weight to other needs: “Choosing to work from home so that you can go to a martial arts class should be as acceptable as doing so to pick up your kids.”

The realisation that jobs can be done from anywhere has also altered HR strategy in ways that employees may not yet recognise. 

The talent acquisition executive says that his company is shifting white-collar roles from North America and Europe to lower-cost markets in Asia, without worrying about a drop in productivity.

“In business, people like to see simple solutions to complex problems,” says Shragai. 

“One thing about the pandemic that has struck everyone is the sense that we’re dealing with a lot of uncertainty. 

People always have but felt they could control events. 

The pandemic has shown to everybody that you can’t.” 

People can be pricey

Will surprisingly high global inflation last?

Don’t panic. But keep a watchful eye



In january an inhabitant of a midwestern city—Cleveland, say—could buy a three-year-old Toyota Camry for about $18,000 and fill up its 60 litre petrol tank for about $28. 

By May, the car would have cost them 22% more and the 16 gallons of gas 27% more. 

As the American economy has risen from its pandemic slumber, the prices of durable goods and commodities have soared.

Not long ago economists tended to the view that the covid-19 pandemic would lead to a prolonged slump in the rich world. 

That view has not worn well. 

In February America’s Congressional Budget Office predicted that growth in America in 2021 would be 3.7%. 

On July 1st it doubled that forecast to 7.4%. 

Since May the Bank of England has revised up its estimate of British gdp in just the second quarter of the year by 1.5 percentage points.

With unexpected growth has come an unexpected spurt of inflation. 

A certain amount was baked in. 

The fact that prices—and in particular commodity prices—fell during the spring of 2020 meant that what are known as “base effects” would drive headline inflation up this summer: even if prices had been stable from March to June this year, the fall over the same months last year would see the year-on-year difference increase. 

But core prices—which exclude energy and food—were expected to stay pretty stable.

In February the median economic forecaster thought America’s core consumer prices would rise just 1.9% over 2021. 

That increase is already in the rear-view mirror. 

In the three months to May core inflation reached 8.3% on an annualised basis, the highest rate since the early 1980s. 

In June the Institute for Supply Management’s index of changes in the prices paid by American manufacturers registered its highest reading since 1979, a year in which consumer prices rose by 13.3%.


Inflation in other rich countries has been more modest (see chart 1). 

But it has still exceeded expectations (see chart 2). 

In the euro area headline inflation year-over-year has risen from 0.9% to 1.9% since May, touching the European Central Bank’s target of “below, but close to 2%”. 

Much of this is due to base effects; core consumer prices actually fell between February and May, as they did in Japan. Britain is—as in many things—an intermediate case. 

Headline inflation is roughly on target but core consumer prices have accelerated. 

This has caused some alarm. 

When leaving his job on June 30th Andy Haldane, the Bank of England’s chief economist, warned that British inflation, currently 2.1%, would be closer to 4% than 3% by the end of the year.


This is not just an issue for rich countries. 

A measure of aggregate inflation in emerging markets produced by Capital Economics, a consultancy, rose from 3.9% in April to 4.5% in May. 

Rising inflation has set off a cycle of monetary tightening. 

Since the start of June central banks in Brazil, Hungary, Mexico and Russia have raised rates.

A sustained rebound in inflation would be bad news for two reasons. 

First, inflation hurts. Life-satisfaction surveys carried out in the 1970s and 1980s found a one-percentage-point rise in inflation reduced average happiness about as much as a 0.6-percentage-point rise in the unemployment rate. 

If it catches workers by surprise it erodes their wages, hurting the lowest paid the most; if it catches central banks by surprise they may have to slow the economy, or even engineer a recession, to put the beast back in its cage.

Second, inflation has the potential to up-end asset markets. 

The sky-high prices of stocks, bonds, houses and even cryptocurrency rests on the assumption that interest rates will stay low for a long time. 

That assumption makes sense only if central banks do not feel forced to raise them to fight inflation. 

If prices rise too persistently, the financial edifice that has been built on years of low inflation could lose its foundations.

The factors pushing inflation higher are threefold. 

The first is a boom in demand for goods like cars, furniture and household appliances set off by consumers splurging on things that made lockdown homes nicer and life outdoors more enjoyable. 

The second is disruption in the global supply of some of those goods. 

A shortage of microchips, for example, is severely curtailing the supply of cars. 

A higher oil price does not help. 

Disruption in the global shipping industry and at ports exacerbates things in various markets. 

The third—probably the most important, and the one only now fully coming to be felt—is a rebound in the prices of services. 

Consumers are returning to restaurants, bars, hairdressers and other in-person businesses faster than workers are.


America is seeing higher inflation than anywhere else primarily because, having seen the largest economic stimulus, it saw the greatest durable-goods boom. 

According to the index of prices targeted by the Fed, cars, furniture and sporting gear were responsible for more than four-fifths of core-inflation overshoot in May (see chart 3). 

Europe’s supply chain faces the same issues as America’s, but with demand more modest, durable goods sensitive to the disruptions were only 1.5% more expensive in May than they were a year earlier, according to Morgan Stanley.

For how long will engorged demand come up against constrained supply? 

The experience of 2020 showed that supply chains could find a way around some issues—such as shortages of toilet roll and diagnostic tests—relatively quickly. 

The trouble is that microchip supply and shipping capacity are relatively slow to adjust: expanding capacity requires investment in fabs and ships. 

Firms report that they expect delivery times to be longer, not shorter, in six months’ time.

But though some of the problems will persist, the contribution of durable-goods shortages to inflation may have peaked. 

Inflation is the rate at which prices change, not a measure of how high they are. 

If prices stay high but stop rising—or even just slow the rate of their rise—inflation falls. 

If prices fall back again, as American lumber prices did by a spectacular 40% in June, base effects go into reverse, lowering headline inflation.

The increase in demand which drove up demand for durable goods in the first place is also dropping. 

This is not because people are running out of money. 

During the pandemic overall household spending went down, even though stimulus measures preserved or increased incomes. 

In America the resultant wedge of excess savings stands at around $2.5trn, or 12% of gdp. 

The equivalent in the euro area was 4.5% of gdp at the end of 2020. 

It is unlikely to have fallen much yet.

It is, though, being spent on different things. 

With services reopening, those consumers flush with cash face a choice between paying high prices for goods they have been able to buy throughout the pandemic and buying the kind of experiences of which many have been starved for almost two years. 

They choose the latter.

A new hope

In inflation terms, this shift may push economies out of the frying pan and into the fire. 

High demand for hotels, transport and restaurant meals means lots of companies need workers. And the workers are getting pricey.

Despite growing by nearly 350,000 jobs in June, America’s leisure and hospitality is still only seven-eighths as big as it was before the pandemic in employment terms. 

Workers for whom $2,000 in stimulus payments earlier this year and extended unemployment insurance made a big difference find themselves in a seller’s market. 

Wages in leisure and hospitality jobs are nearly 8% higher than in February last year; job openings are abundant. 

Restaurants and hotels tend to have low profit margins: where wages go, prices are likely to follow.

According to JPMorgan Chase, average services prices across the world are still below their pre-pandemic level. 

Closing only half that gap in the second half of this year would add a percentage point to average headline inflation. 

In some places, though, labour costs look like eliminating the gap completely, and then some. 

In America median workers require a 3% higher wage to accept a job than they did before the pandemic, according to a recent survey by the New York Fed. 

For low-wage workers the necessary wage has gone up 19%.

American economists have floated lots of possible explanations for the reluctance many people are showing towards jobs offered for pre-pandemic wages and under pre-pandemic working conditions. 

Some blame America’s unemployment insurance top-ups and think wages will stop rising when they expire in September (they have already been curtailed in some states). 

Others suggest that restaurant workers are unwilling to return to such jobs while the virus is still at large, or that school closures are leaving workers stuck without child care.

None of these explanations is fully satisfactory. 

Britain and Australia are also suffering worker shortages in some industries, despite not having generous unemployment benefits. 

It seems strange that young waiters, who could be vaccinated should they so choose, would see the restaurants to which consumers are happy to return as too risky to work in. 

A new paper by Jason Furman and Wilson Powell III of Harvard University and Melissa Kearney of the University of Maryland finds that additional joblessness among mothers of young children accounts for only a “negligible” share of America’s employment deficit, contrary to the conventional wisdom.

Some speculate on causes with which it is harder for economists to get to grips. 

The psychological caesura of the pandemic may have given people the time to wonder what sort of work they want to return to, provoking soul searching and curious forays into new territory. 

Presumably at some point such job-changers will return to work, if perhaps in other sectors. 

But when that might be is not clear. Indeed, with the exception of enhanced unemployment benefits none of the putative causal factors provides a strong sense of how long the situation will last.


Another price with plenty of room to run is rent. 

During the pandemic low interest rates and a demand for more space triggered an extraordinary house-price boom across the rich world: in April American homes were 14.6% more expensive than they had been a year earlier. 

Yet in America, the euro area and Britain rents remain beneath their pre-pandemic trend; in Australia rents have fallen throughout the pandemic. 

Renters are more likely than homeowners to have lost their job over the past year, and rents are highly cyclical, moving with the fortunes of the economy. 

But as economies and labour markets rebound, there might be some catching up and—if house prices are anything to go by—some overshooting yet to do. 

Rent accounts for one-fifth of core inflation in the index targeted by the Federal Reserve.

Wages, rents and the like would have to keep on increasing rapidly for high inflation to persist. 

This might happen if the experience of the pandemic has changed the givens of the economy in some deep way—say, by permanently increasing the rate of unemployment at which wages and prices start to accelerate. 

But a more likely route to persistently high inflation would be a cycle of self-fulfilling expectations.

So far, inflation expectations have not risen by anything like as much as inflation itself. 

Take financial markets. 

It is fashionable to pay close attention to investors’ inflation expectations as revealed by the difference in price between inflation-protected bonds and the normal kind.

Expectations rose steadily after President Joe Biden’s election victory, which brought with it the prospect of more stimulus. 

Recently, however, they have fallen back to levels that are more or less consistent with the Federal Reserve’s inflation target.

In the euro area investors still expect the ecb to undershoot its inflation target over the next five years. 

In his warning on leaving the bank Mr Haldane pointed to a rise in long-term financial-market measures of expectations for Britain. 

But at 0.3 percentage points above the past decade’s average this is hardly the stuff of nightmares. 

As for everyday consumers, surveys purporting to reveal their expectations in the matter have found them to be increasing, but only modestly .

The phantom menace?

These “anchored” expectations give rich-world central banks some slack when it comes to ignoring temporary price surges. 

Changes in their attitude to inflation encourage them to make full use of it. 

Since August 2020 the Fed has been targeting an average inflation rate of 2% over the whole economic cycle. 

An overshoot now—the Fed expects inflation to be 3.4% at the end of the year—can make up for past or future shortfalls. 

The ECB expects inflation to be 2.6% at the end of the year. 

On July 8th it abandoned its target of “close to, but below, 2%”. 

Instead, it will henceforth aim for a “symmetric” target of 2% whereby “negative and positive deviations of inflation from the target are equally undesirable”. 

This will make overshooting the target more acceptable.

The combination of anchored expectations and changing attitudes explains why central banks, and especially the Fed, seem so far to be relatively relaxed about inflation, making it clear that they are cognisant of the risks but staying well short of precipitous action. 

Thus in June the Fed signalled that it might raise interest rates twice in 2023, sooner than previously expected; some of its rate-setters have floated the possibility of doing so next year. 

Monetary-policy makers are also lining up to say they are ready to slow the Fed’s purchases of assets this year.



It is possible that central banks are pushing their luck. 

In the past, rapidly rising inflation expectations have typically been a sign that things have already gone wrong, not a sign that they are about to. 

“Neither bond markets nor economists have a great track record at forecasting inflation,” concludes a recent analysis by Joseph Gagnon and Madi Sarsenbayev of the Peterson Institute for International Economics, a think-tank. 

The idea that expectations could become de-anchored is “not my biggest worry, but if it’s not on your worry list, you’re not thinking clearly about the issue,” Mr Furman said recently. 

(A senior economic adviser in Barack Obama’s White House, he says his biggest worry remains a recession, because though its likelihood is low its consequences would be dire.) 

Oxford Economics, a consultancy, sees a 10-15% chance of the American economy shifting into a “high-inflation regime” of price rises persistently above 5%.

And only rich-world central banks, on the whole, have the luxury of securely anchored inflation expectations. 

Emerging markets, which are also suffering the acceleration of global commodity and goods prices, must be more careful about letting the genie out of the bottle. 

They must also pay keen attention to American inflation. 

As the Federal Reserve tightens monetary policy, it puts downward pressure on emerging markets’ currencies, making it more expensive for them to import goods and creating another source of local inflation. 

Emerging-market currencies have fallen by an average of 1.5% since the Fed’s comparatively hawkish meeting in June.

This is at a time when emerging markets’ economies are on the whole less healthy than the rich world’s because of their lower vaccination rates. 

The trade-off they face between helping growth and containing inflation will be painful. 

Yet though some central banks are raising interest rates, the situation is not acute. 

Both Russia and South Africa have recently floated the idea of tightening their inflation targets (currently 4% and 3-6%, respectively). 

That would be absurd amid rampant upward pressure on prices.

Inflation is always worth taking seriously, not least because the belief that central banks will do so acts as a check in and of itself. 

If the Federal Reserve spends a few years trying to hit its 2% inflation target from modestly above it little harm is done. 

But this inflation carries an extra message. 

For most of the 2010s rich-world policymakers could not understand why inflation was so low, and feared that it was beyond their power to raise it. 

It is possible that, even now, the euro area and Japan may remain stuck in a low-inflation trap.

America has demonstrated that a remarkable combination of fiscal and monetary stimulus can cause prices to accelerate even when interest rates are stuck at rock-bottom. 

That knowledge may prove useful to others and in times to come. 

The challenge now is to make sure that the price paid for it in terms of spiralling prices does not rise too high. 

How FC Barcelona blew a fortune — and got worse

The inside story of why the world’s best and richest football club lost the battle for talent

Simon Kuper

© Fran Santiago/Getty Images | Lionel Messi


When I began writing a book about FC Barcelona in 2019, I thought I would be explaining the club’s rise to greatness, and I have. 

But I have also ended up charting its decline and fall.

Before the pandemic, Barcelona became the first club in any sport ever to surpass $1bn in annual revenues. 

Now its gross debt is about $1.4bn, much of it short-term.

Spain’s La Liga has blocked it from spending any more money it doesn’t have. 

Barça has faced obstacles to giving a new contract to the world’s best and ­highest-paid footballer, Lionel Messi, even though he has reportedly agreed to cut his pay by half. 

The club has put most of its other players in an everything-must-go sale, with few takers so far.

The pandemic hurt, but it was only the coup de grâce. 

Almost invisibly, Barcelona has been in free fall ever since the night in Berlin in June 2015 when it won its fourth Champions League final in 10 years. 

The club had achieved dominance on the cheap, thanks to a one-off generation of brilliant footballers from its own youth academy. 

Back then, Barça could afford to sign almost anybody in football. 

In any talent business, the most important management decision is recruitment. 

But Barcelona lost the “war for talent”. 

What went wrong?

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Barça’s process for buying players is unusually messy. 

Rival currents inside the club each push for different signings, often without bothering to inform the head coach. 

Candidates for the Barça presidency campaign on promises of the stars they will buy if elected. 

The sporting director of the moment will have his own views, as will Messi.

The man overseeing Barcelona’s disastrous transfer policy between 2014 and 2020 was Josep Maria Bartomeu. 

An amiable chap, he runs a family company that makes the jet bridges that take passengers from plane to terminal. 

In January 2014, he went from obscure Barça vice-president to accidental president when the incumbent, Sandro Rosell, stepped down. 

Bartomeu was considered a mere caretaker. 

However, in July 2015, a month after the win in Berlin, grateful club members gave him a landslide victory in Barça’s presidential elections.

The problem was that he knew little about either football or the football business. 

His sporting director, the legendary Spanish goalkeeper Andoni “Zubi” Zubizarreta, had signed players like Neymar and Luis Suárez, who gelled with Messi into the “MSN” attack, the best in football. 

But Bartomeu soon sacked Zubi. 

In all, the president had five sporting directors in six years.

After selling Neymar (1) in 2017, Barça reportedly turns down Kylian Mbappé (2) and signs Ousmane Dembélé (3) instead © Mehdi Taamallah; John Berry; Pedro Salado via Getty Images


Barcelona’s descent began with the loss of Neymar. 

The Brazilian was a hyperefficient winger who ran on to Messi’s passes. 

Expected goals (xG) is a measure of how many goals a team is likely to score based on its quality of chances. 

In the 2015/16 season, Neymar by himself accounted for 1.2 xG per game, only slightly behind Messi’s staggering 1.4. 

But Neymar wanted to be Messi: the main man of his team. 

In 2017, he joined Paris Saint-Germain (PSG) for a transfer fee of €220m, a world record. Barcelona never managed to replace him.

When a club sells a player for €220m, it doesn’t actually have €220m to spend. 

There are taxes, agents’ fees and payments by instalment. 

Still, every other football club in 2017 knew Bartomeu had a wad of money in his back pocket and a need for a human trophy to wave in front of Barça’s 150,000 Neymar-deprived club members.

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Almost any footballer will listen to an offer from Barcelona. 

“Sometimes you cannot reach an agreement,” Rosell told me, “but everybody sits at the table.”

In 2017, the Spanish agent Junior Minguella offered Barcelona’s board the sensational 18-year-old French forward Kylian Mbappé. 

But Minguella didn’t even hear back from Barça until finally a WhatsApp message arrived from a board member, Javier Bordas: “Neither the coaches nor Presi [the president] wanted him.”

Bordas would say years later that Barça’s technical staff had also rejected the young Norwegian Erling Braut ­Haaland, because he wasn’t considered “a player in the Barça model”. 

Today, Mbappé and Haaland are the two most coveted young men in football.

Instead Barça targeted another young Frenchman, Borussia Dortmund’s Ousmane Dembélé. 

Three weeks after Neymar left, Bartomeu and another Barcelona official flew to negotiate — Dembélé’s transfer with their German counterparts in Monte Carlo, a favourite hub of the football business.

The Barça duo landed with a firm resolution, reported The New York Times: they would pay a transfer fee of at most €80m. 

Anything more and they would walk away. 

Before walking into the assigned room, the two men hugged.

But in the room, they got a surprise. 

The Germans said they had no time to chat, had a plane to catch, wouldn’t negotiate and wanted about double Barcelona’s budgeted sum for Dembélé. 

Bartomeu gave in. 

After all, he was president of the world’s richest club, and still something of a football virgin. 

He committed to pay €105m up front, plus €42m in easily obtained performance bonuses — more than Mbappé would have cost.

Not six months later, Barça paid Liverpool €160m for the Brazilian creator Philippe Coutinho. 

Neymar’s transfer fee had been blown, and more. 

A transfer fee of more than €100m should be a guarantee against failure, but neither Dembélé nor Coutinho ­succeeded at Barça.

Some of this may be due to the anxiety inherent in joining this club. 

The English striker Gary Lineker, who came from Everton in 1986, told me: “The moment I got off the aeroplane, there were hundreds of photographers and press. 

I was there with [Welsh striker] Mark Hughes. 

We’d just signed and we were told, ‘We’re going to train on the pitch today, it’s when they introduce you to the crowd,’ and we thought, well, who’s going to turn up? 

Maybe 30 people, maybe 40. 

There was about 60-odd thousand people there, just to cheer the new players and watch a bit of training.”

Lineker agreed that Hughes, who failed at Barcelona, may have been one of the players who are said to “die” of nerves in the Camp Nou. 

“I think he was a bit too immature. 

But the expectancy levels there!”

No wonder Barcelona face a peculiar hurdle in the transfer market: many potential signings feel they aren’t good enough for Barça. 

These men are experiencing possibly justified imposter syndrome. 

Rosell said, “Sometimes an agent comes and says, ‘No, no, no, we are not ready.’ 

This is very honest. 

I liked it when it happened to me.” 

Bartomeu told me of similar rejections from “very important players now playing in other clubs”.

In early 2019, when Barcelona approached Ajax Amsterdam’s young midfielder Frenkie de Jong, a Barça fan since childhood, he was torn. 

He worried he wouldn’t get on to the team. 

Accepting an offer from Manchester City or PSG felt more realistic. 

He lay awake at night fretting over what might prove the biggest decision of his professional life. 

Reassured when Bartomeu made the effort to visit him in Amsterdam, De Jong finally decided he had to take the risk of joining Barça, rather than spend the rest of his life wondering whether he could have made it there.

Barcelona paid Ajax a transfer fee of €75m. 

According to football agent Hasan Cetinkaya, advising the Dutch club, this was nearly double what Ajax had initially hoped to get. 

Cetinkaya said: “There was tremendous pressure on Barcelona’s sporting management to get the deal done, and they really wanted to protect themselves. 

Those in Barcelona’s sporting leadership were so relieved that the then sporting director Pep Segura began crying as soon as the papers were written.”

Barça was used to overpaying. 

Whereas most clubs target a type — say, a young playmaker who costs under €30m — Barcelona until 2020 shopped at the top of the market, and could afford to target an ideal. 

In this case, Barça didn’t want a “De Jong type”. 

It wanted De Jong himself. 

As so often when bidding for a player, it had no alternative in mind, and the selling club understood this. 

“You know you will pay more than another club,” shrugged Rosell.

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In early summer 2019, Neymar messaged Messi to say he wanted to leave PSG. (“MSN” lived on in a WhatsApp group.) 

Messi saw the chance to repair Barcelona’s mistake of 2017. 

He replied: “We need you to win the Champions League.” 

He summoned Bartomeu and let him know. 

Messi made the same case in the media, putting pressure on the club.

But Barça took one look at the injury-prone, fun-loving, then 27-year-old Neymar and decided it wasn’t going to pay PSG’s asking fee of approximately €200m. 

By this time, Barcelona was running out of money, partly because of its run of bad purchases and partly because the pay rises Messi’s father Jorge kept extracting for his son were bleeding the club dry.

Between 2017 and 2021, Messi earned a total of more than €555m, according to extracts from his 30-page contract published in El Mundo newspaper. 

Neither Messi nor senior Barcelona officials denied the figure. 

One senior Barça official told me Messi’s salary had tripled between 2014 and 2020. 

But he added, “Messi is not the problem. 

The problem is the contagion of the rest of the team.” 

Whenever Messi got a raise, his teammates wanted one too. 

Messi’s salary finally made it impossible for Barcelona to buy the player Messi most wanted.

In 2018 Barça spends big on Philippe Coutinho (1) but by 2019 he is on loan to Bayern Munich. The same year, it buys Antoine Griezmann (2) and Frenkie de Jong (3). In 2020 Luis Suárez (4) is sold to Atlético Madrid for just €6m © Josep Lago; Pedro Salado; Pierre-Philippe Marcou via Getty Images


Barça spent summer 2019 more or less pretending publicly to sign Neymar, so that it could eventually go back and tell Messi, “Sorry, we tried everything but we couldn’t get him.” 

Instead Barcelona paid Atlético Madrid €120m for Antoine Griezmann, the 28-year-old Frenchman who had rejected the club a year earlier. 

It was a record fee for a footballer older than 25. 

It also enriched Barcelona’s rivals Atlético over and above the peculiar arrangement of Barça paying the Madrileños millions a year for “first refusal” on their players.

Barça’s ostentatious pursuit of Neymar doesn’t seem to have fooled Messi. 

Asked if the club had done everything possible to get the Brazilian, he replied, “I don’t know . . . not everything is very clear.” 

Asked if he ran the club, he issued his usual irritable denial: “Obviously I don’t direct things, I’m just another player.”

A club staffer who has worked with Messi since before his first-team debut in 2004 disagrees. 

“He’s calling the shots,” this man told me. 

“He knows he can take out anyone. 

He’s not looking for fights — he’s a nice guy. 

But he knows he has the power.” 

When Messi lost a battle, the staffer said, he would say nothing but metaphorically “write it down in his notebook”.

The failure to buy Neymar was Messi’s biggest defeat inside Barça and it went into his mental notebook. 

He couldn’t forgive Bartomeu. 

Messi didn’t particularly want power. 

He would have preferred that the directors and coaches handled everything — but only as long as they bought exactly the players he wanted.

Players who join Barcelona have often been the stars of every team they have played for since age six. 

At Barça, they become watercarriers for Messi. 

The drop in status was hard for a veteran superstar like Griezmann, especially when, for the first time in his career, he was benched. 

He rarely reached his best at Barça.

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In total, Barcelona spent over €1bn on transfers between 2014 and 2019, more than any other football club, yet as veteran defender Gerard Piqué admitted, “Every year we were a little bit worse.” 

By January 2020, when Barça needed a striker to replace the injured Suárez, the club was reduced to discount shopping. 

Sporting director Eric Abidal contacted the agents of Cédric Bakambu, a French-Congolese forward at Beijing Guoan.

When Bakambu got the phone call that every journeyman footballer dreams of, he jumped on a plane to Hong Kong, from where he could catch a flight to Catalonia. 

He sat wide-awake with excitement during the four hours to Hong Kong. 

As the plane came in to land and the signal on his phone resumed, a message from Abidal arrived: Barça had changed its mind. 

Instead the club signed a different journeyman, the Dane Martin Braithwaite, who had flopped at Middlesbrough in the English Championship.

Yet the strangest purchase of the Bartomeu era was Matheus Fernandes. 

In January 2020, Barça signed the unknown 21-year-old reserve midfielder from the Brazilian club Palmeiras. 

The transfer fee was €7m, plus €3m in potential add-ons. 

Fernandes was almost a secret signing. Barça never gave him an official presentation. 

After a spell on loan at little Valladolid, where he played just three matches, he returned to the Camp Nou and was given the “Covid” shirt number 19, which nobody else wanted. 

Last season, “the Brazilian Phantom” played 17 minutes for the first team.

Nobody could work out why Barça had bought him. 

Palmeiras’s sporting director, Alexandre Mattos, explained later that he had somehow lured Abidal to come and see the club’s reserves train. 

“At that moment, they called me crazy: ‘You want to sell a player from Palmeiras reserves, who doesn’t play much, to Barcelona?’”

One wonders what Messi made of Braithwaite and Fernandes.

By summer 2020, Barça’s transfer deficit was haunting Bartomeu and his board members. 

Under the rules that govern Spanish member-owned clubs such as Barça, directors had to repay losses out of their own pockets. 

The board needed to book profits urgently before the financial year ended on July 1. 

And so a bizarre swap transfer was concocted. 

The counterparty was Juventus, also eager to improve its books. 

Juve “sold” Bosnian midfielder Miralem Pjanic to Barça for a basic fee of €60m, while Barça sold Brazilian midfielder Arthur Melo to Juve for a basic €72m.

These sums would never actually be paid. 

They were invented for accounting purposes. 

Under bookkeeping rules, each club could book its handsome supposed selling price as immediate income. 

The notional payments would be spread out over the years of the players’ contracts. 

Only €12m in actual money would end up changing hands, the difference between the two players’ fictional prices, paid by Juve to Barça. 

What mattered was that the swap helped both giants clean up their books.

It was a good deal for Bartomeu’s board, but not for Barça: the ageing squad acquired another 30-year-old in Pjanic, who was soon a fixture on the substitutes’ bench. 

By last August, after an 8-2 thrashing by Bayern Munich in the Champions League, Barça’s financial crisis became acute. 

The club needed to offload overpaid older players for whom there was little demand. 

Suárez, 33, was informed in a one-minute phone call that his services were no longer needed. 

He joined Atlético. 

Barcelona continued to pay a portion of his salary.

Bartomeu does deserve credit for signing 17-year-old Pedri from Las Palmas that summer, for an initial fee of just €5m. 

The boy became a sensation. 

He shone for Spain in this summer’s European Championship and should play in Saturday’s men’s Olympic football final against Brazil. 

Still, that success cannot outweigh all Bartomeu’s failures.

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In 2016 Messi wins his fifth Ballon d’Or (1); three years later Barça wins La Liga (2). But by 2021, the club faces obstacles to giving Messi a new contract, even though he has reportedly agreed to cut his pay by half © Fabrice Coffrini; Lluis Gene; Manu Fernandez via Getty Images


Barcelona ended last season third in the Spanish league, its worst performance since 2008. 

Atlético Madrid won the title, largely thanks to Barça’s gift of Suárez. 

The Uruguayan scored 21 league goals, and was the striker that Barcelona lacked all season. 

After scoring the winner in the last match, he sat on the field crying with happiness as he phoned his family. 

“The way they showed contempt for me at Barcelona at the start of the season,” he had said earlier. 

“Then Atlético opened all its doors for me.”

This season could be worse for Barça. 

La Liga has been indicating it will only let the club spend about €160m or €200m on player costs this year, less than a third the amount of three years ago. 

Barcelona isn’t merely paying unaffordable wages. 

It’s also still amortising failed transfers of years ago. 

The club has gone from discount shopping to only signing out-of-contract players who carry no transfer fees at all. 

Even then, La Liga will only register them to play and re-register Messi if Barça can first slash its wage bill.

Barça has offloaded a few relatively modestly paid reserves, without noticeably denting the wage bill. 

Fernandes received an email saying his contract was being terminated; he is reportedly taking legal action for unfair dismissal. 

Barça would love to sell some expensive players, but Dembélé is injured and Coutinho recovering from injury.

The club may end up having to sell its most treasured young players, Pedri and De Jong. 

Rival big clubs are pitiless. 

Messi might choose to leave. 

Barça needed to lower its sights for a while, another senior club official told me, “not try to win every year La Liga or the Champions [League]”. 

I have sometimes felt I was writing a book about Rome in 400AD with the barbarians already inside the gates.


Simon Kuper is an FT columnist. This is an edited extract from his book ‘Barça: The Inside Story of the World’s Greatest Football Club’, published by Short Books on August 12

China Is Killing Its Tech Golden Goose

The Communist Party of China’s crackdown on ride-hailing firm Didi over supposed data-security concerns seems to be just the beginning of a wider campaign to assert control over the country’s thriving tech sector. Foreign investors hoping that Chinese leaders will realize their folly and reverse course should think again.

Minxin Pei


CLAREMONT, CALIFORNIA – US politicians from both congressional parties are worried that China is overtaking America as the global leader in science and technology. 

In a rare display of bipartisanship, the normally gridlocked Senate passed a bill in early June to spend close to $250 billion in the next decade to promote cutting-edge research. 

But lawmakers may be fretting unnecessarily, because the Chinese government seems to be doing everything possible to lose its tech race with America.

The latest example of China’s penchant for self-harm is the sudden and arbitrary regulatory action taken by the Cyberspace Administration of China (CAC) against Didi Chuxing, a ride-hailing company that recently raised $4.4 billion in an IPO on the New York Stock Exchange. 

On July 2, just two days after Didi’s successful offering, which valued the firm at more than $70 billion, the CAC, a department of the ruling Communist Party of China (CPC) masquerading as a state agency, announced a data-security review of the company. 

Two days later, the CAC abruptly ordered the removal of Didi from app stores, a move that wiped out nearly a quarter of the firm’s market value.

The CPC’s crackdown against Didi under the pretext of data security seems to be just the beginning of a wider campaign to assert control over China’s thriving tech sector. 

On July 9, the CAC further shocked tech entrepreneurs and their Western investors with an official announcement that all companies with data from more than one million users must pass its security review before listing on overseas stock exchanges. 

Once fully implemented, this new policy could choke off Chinese tech firms’ access to foreign capital.

Ironically, US China hawks have long dreamed of accomplishing just that. 

In December last year, Congress passed a law authorizing the delisting of Chinese companies from US stock exchanges if they fail to meet US auditing standards. 

Now, it seems that Congress need not have bothered. 

Its nemesis, the CPC, will be doing the same job far more effectively and thoroughly from now on.

Any so-called data-security review conducted by a secretive party agency with little technical expertise, no legal accountability, and a responsibility only to its political masters will erect another unpredictable regulatory hurdle deterring most, if not all, foreign investors. 

Since foreign backers of Chinese tech start-ups usually plan to exit their investment through an overseas listing – preferably in New York – the prospect of a CPC agency wielding a veto over future listings may make them extremely reluctant to invest.

Foreign investors, usually well-established venture-capital firms, bring not only much-needed financing, but also valuable expertise and best governance practices that are vital to the success of tech start-ups. 

Almost all dominant Chinese tech giants, including Alibaba, Tencent, and Baidu, relied on foreign funding to grow into spectacularly thriving companies. 

Had the CPC required a similar data-security review two decades ago, none of them would have existed – and China’s tech landscape today would be desolate.

The CAC’s crackdown on China’s most successful tech firms is not driven by concerns about data security. 

China’s surveillance state offers citizens no data security or privacy to speak of. 

And given that China’s data-security law already requires all tech companies to store their data inside the country’s borders, the government’s worries about a potential data leak by a ride-sharing platform such as Didi hardly merit radical rule changes and arbitrary restrictions. 

Minor regulatory tweaks would be more than adequate to address policymakers’ legitimate national-security concerns.

But foreign investors hoping that Chinese leaders will realize their folly and reverse course should think again. 

Killing the proverbial golden goose seems to be a CPC specialty. 

In fact, neither Didi nor Alibaba – which in April received a record $2.8 billion antitrust fine from the Chinese government – even come close to being the biggest such creature China has slaughtered recently. 

That unwanted distinction belongs to Hong Kong, whose autonomy and prosperity are in grave peril following the government’s imposition of a draconian national-security law last year.

Paranoia, bullying instincts, and contempt for property rights are deeply embedded in the CPC’s collective psyche, predisposing the Chinese government to self-destructive policies, regardless of well-intentioned advice or even evidence of their harmful consequences. 

And over-centralization of power under strongman rule in China today has made self-correction nearly impossible.

For China’s tech entrepreneurs, Didi’s travails should serve as a rude awakening. 

Many may think that they can thrive under a dictatorship as long as they stay out of politics and focus on making money. 

But, to paraphrase Leon Trotsky, they may not be interested in the dictatorship, but the dictatorship is very interested in them.

A well-known Chinese proverb applies to the CPC. 

The party keeps “hurting loved ones and delighting the enemy” (qintong choukuai). 

China’s tech bosses are learning the hard way that they may well have more to fear from their own government than from America’s bipartisan Sinophobia.


Minxin Pei is Professor of Government at Claremont McKenna College and a non-resident senior fellow at the German Marshall Fund of the United States.