Football superstars Lionel Messi and Cristiano Ronaldo, both of them five-time winners of the coveted Ballon d’Or (Golden Ball) award, share more in common than their exceptional sporting talents which have earned them the rank, in Forbes magazine, as the two highest-paid athletes in the world.
For Messi and Ronaldo have also been convicted of tax evasion, and their aversion towards the taxman led them separately to the same address in central London, at 20-22 Bedford Row.
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Situated on the second floor of the building, law firm Couchmans drew up the contract that transferred Ronaldo’s image rights to Tollin, a company registered in the British Virgin Islands, in which the Portuguese forward, while playing for Real Madrid, hid just less than 150 million euros of earnings between 2008 and 2015, and which led in January to his conviction for tax evasion by a Spanish court which handed him a 23-month suspended jail sentence.
Located on the first floor of the building was the registered office of Sidefloor, a shell company used by Messi’s father Jorge who managed his son’s financial affairs, and whose director was listed as David Waygood. But the Sidefloor address on Bedford Row was in fact that of a firm called Jordans, providing “company formations services” specialised in the creation and management of shell companies in tax havens. Waygood, who served as a frontman for Jorge Messi, was one of its staff.
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Sidefloor was at the centre of the tax evasion case brought against Lionel Messi and his father at a trial in Spain in 2016, when both were found guilty of defrauding the taxman of 4.1 million euros. The fraud centred on the FC Barcelona forward’s remunerations between 2007 and 2009. They were each handed suspended prison sentences, which on appeal were commuted to fines, for hiding the Argentine player’s image rights fees in tax havens, notably via Sidefloor.
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Documents from the Football Leaks platform, a vast collection of leaked confidential data from the world of football which was originally obtained by German weekly Der Spiegel (see the “Boîte Noir” box, bottom of page), reveal that this same London-based company is implicated in another alleged case of tax evasion of part of Messi’s earnings, and also implicates his club, FC Barcelona. The documents, cited in a book published this month by Der Spiegel journalists Rafael Buschmann and Michael Wulzinger, were passed on for further investigation by Mediapart and its partners in the journalistic consortium European Investigative Collaborations (EIC).
The documents suggest that between 2010 and 2016 the Catalan club paid into a Luxembourg account belonging to Sidefloor, and also to an Argentine company called Limecu, a total of 10.5 million euros in agent and scouting fees. The Spanish tax authorities suspect that the operation was in fact aimed at artificially reducing Lionel Messi’s declared salary by substituting part of it with tax-free payments to his father.
Neither Jorge Messi nor FC Barcelona replied to questions submitted to them by the EIC.
There are also questions over the services provided to FC Barcelona by Jorge Messi’s companies, whose contracts appear almost identical to those signed by the club with the father of Brazilian star Neymar during his four years with the Catalan team before his transfer in 2017 to French team Paris Saint-Germain (PSG). Contracts involving Neymar and his father included the forward’s transfer fee from Brazilian club Santos in 2013, which included a large payment to Neymar Snr, and which led to the Catalan club paying a 5.5 million-euro fine over undeclared taxes.
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In 2016, the accounts of FC Barcelona were subjected to an inspection by the Spanish tax authorities. As previously revealed by Mediapart in its series of reports based on documents from the Football Leaks data, the tax authorities suspected irregularities in payments by the club to Messi’s charity for children, the Fundación Leo Messi.
But the authorities also suspected that a similar tax-dodge had been mounted with the player’s father, his agent. For the tax authorities, Lionel Messi should first receive his salary and pay the taxes due on it before remunerating his agent. Their suspicions were that commissions paid to Jorge Messi, which were subject to less tax than the player’s salary, were a deliberate ploy to artificially reduce the taxes that would otherwise have been paid by his son.
After FC Barcelona were asked for the records of commissions paid by the club regarding Lionel Messi, it transpired that it had paid the London company Sidefloor 6.7 million euros between 2009 and 2014. Sidefloor, in whose accounts Jorge Messi’s name does not appear, had already been used to hide earnings from image rights paid to his son.
FC Barcelona’s contracts with Sidefloor were signed with the British company’s director David Waygood, who was Jorge Messi’s frontman. Waygood, a former employee of the banks HSBC and NatWest, had no other connection with professional football.
FC Barcelona and Sidefloor, represented by Waygood, signed an agent’s contract on October 10th 2008 which related to the then recent renewal of Lionel Messi’s contract with the club, and which, the document mentioned, was concluded with “the help” of Jorge Messi. Sidefloor was to receive 400,000 euros per year over a period of six years, plus 5% of the value of the player’s bonuses. In 2011, Sidefloor and the club signed a new and separate contract for scouting services by Sidefloor, which was for identifying promising young players in clubs in Argentina, Messi’s native country. The London company was to be paid 40,000 euros per year for the services, plus 20,000 euros for every player it recommended.
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That same year, the Spanish tax authorities launched an inspection of the Messi family’s revenues from the sale of image rights, which were in part paid into Sidefloor.
In February 2013, Lionel Messi again renewed his contract with FC Barcelona, with an increase in salary that rose to an annual 18.6 million euros , and also to his bonus payments. At the same time, the club agreed a new agent’s contract with Sidefloor, which on that occasion was signed by both Waygood and Jorge Messi. The British company was also given a new contract for scouting work, with a fee which was steeply increased to 280,000 euros per year.
Throughout, the money paid to Sidefloor was sent by FC Barcelona into the company’s account at a branch of the Andbank in Luxembourg.
In July 2013, yet another agent’s contract was drawn up between FC Barcelona and Sidefloor. But this time it would not be signed by David Waygood. On April 27th that year, the 62-year-old committed suicide when he stepped in front of an oncoming train on a railway track near his home in the Kent village of Kemsing, south-east England. A Tunbridge Wells coroner’s verdict six months later confirmed his death as suicide. According to several witnesses at the time, including his son, Waygood, who left a suicide note for his children, had been suffering from work stress and depression. He had served as a frontman for more than 100 companies, and it is uncertain whether his problems were linked to his role for Sidefloor.
In June 2013, two months after Waygood’s death, a criminal investigation into tax evasion was launched against Lionel Messi and his father. But Sidefloor would continue to receive commission payments from FC Barcelona for a further year.
In 2014, the club signed new agent and scouting contracts with Jorge Messi, this time via a new company, Limecu (a reference to his son’s full name of Lionel Messi Cuccittini), registered in Argentina, and officially owned by Jorge Messi – the transactions had become transparent. In 2015 and 2016, it received a total of 3.75 million euros.
But for as much, the Spanish tax authorities, which began an inspection of FC Barcelona’s accounts in 2016, suspected that the contracts with both Sidefloor and Limecu were in fact disguised remunerations of Lionel Messi’s salary which would otherwise have been paid to him directly and subjected to the highest tax rate. The club concluded that the legal arguments of the tax authorities were solid, and that the player ran the risk of being prosecuted for tax evasion. Because he had already been convicted of tax evasion over the payment of image rights, a second conviction could see his suspended prison sentence transformed into jail time.
To protect its star player, FC Barcelona advised Messi, in June 2016, to make a voluntary declaration to correct his tax situation for his earnings that year by adding to his tax returns the sums received by Limecu and his charity. Under Spanish law, making a voluntary correction to tax statements removes the possibility of prosecution.
But as the EIC has previously reported, Messi was unwilling to pay extra taxes, and to keep the player on the field FC Barcelona accepted to pay in his place. This was in the form of a special bonus for him of 23 million euros, dissimulated in an astonishing deal signed in November 2017 which saw his salary jump to a yearly gross sum of 100 million euros.
There remains the question of the nature of the services provided by Jorge Messi’s companies, Sidefloor and Limecu. The scouting contracts with the two companies were almost identical to those signed between FC Barcelona to remunerate the father of Neymar. But these were considered to be illegal, and the club was fined 5.5 million euros for helping with tax evasion after it admitted a “mistake”.
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In the case of Messi, the 2014 agent’s contract the club signed with Limecu set out that, in exchange for 5% of Lionel Messi’s earnings (representing 3.7 million euros over two years), Jorge Messi’s company pledged to supply “continued professional advice regarding the supervision and control” of the agreements reached between Lionel Messi and FC Barcelona. Jorge Messi was also required to pledge that he would do nothing to degrade the relationship between player and club, and to never “encourage the player to end his contract” nor engage discussions “aimed directly or indirectly at transferring the player to another club”.
Some of these contract clauses are strictly the same as those FC Barcelona included in its contracts with Neymar Snr, notably regarding the pledge not to incite the player to end his contract, and not to upset his relationship with the club.
The two fathers were also given very similar scouting contracts, which involved seeking out promising talent in Brazil for Neymar Snr, while for Jorge Messi's patch was to be Argentina. As illustrated in Mediapart’s investigations into the affairs of French club AS Monaco, have been known to use so-called scouting contracts as a means of hiding commission payments to agents.
The successor of David Waygood at Sidefloor did not respond to the EIC’s attempts to contact him.
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The French version of this report can be found here.
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English version by Graham Tearse