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Explaining Messi's suspended jail sentence, tax fraud implications
The Spanish Court of Catalonia on Wednesday found Barcelona star Lionel Messi and his father, Jorge Horacio Messi, guilty of tax fraud. Spanish prosecutors proved that the father-son tandem orchestrated a criminal scheme to avoid paying over €4 million in taxes related to earnings from the sale and licensing of Lionel Messi’s image. As part of their punishment, both men were sentenced to 21 months in prison—but don’t expect either to spend a day behind bars.
Under Spanish law, sentences of less than 24 months for “first-time” offenders—that is, those without a criminal record—are typically “suspended.” A suspended prison sentence is one where a convicted defendant does not actually serve time in prison, so long as the defendant meets certain conditions within a specified probationary period.
At a minimum, a convicted defendant must avoid breaking laws during the time he or she would have spent in prison. Failure to meet the conditions of a suspended sentence turns it into an operative one, meaning the defendant is sent to prison. Messi and his father, who are appealing the convictions, will avoid prison so long as they remain law-abiding over the next couple of years.
The case against Messi
While Messi, who turned 29 last month, will avoid prison so long as he stays out of trouble, it is nonetheless significant that he has been convicted of a crime. Article 305 of the Spanish Criminal Code defines tax fraud as “he who by action or omission defrauds the Public Treasury” of at least €120,000. Tax fraud normally requires that the defendant knew or should have known that a certain tax practice was tantamount to fraud.
The story behind Copa America final's most defining Messi image
Messi’s defense tried to rebut the required elements of tax fraud by claiming that, one, he lacked any awareness of fraudulent activity and, two, he was never in a position to know. Along those lines, both Messi and his father portrayed their relationship as one where the father handled all of the business, investment and tax decisions while Lionel focused entirely on becoming arguably the world’s best soccer player.
Under this alleged dynamic, Messi would not, and could not, have known that his father exploited offshore tax havens in Belize and Uruguay as a means of avoiding the detection of Spanish tax collectors.
The court didn’t buy it. Prosecutors persuasively debunked the narrative of Messi having no idea about the relationship between taxes and his earnings as implausible. At one point during the trial, a prosecutor remarked that “even 10-year children” are aware about how taxes work. Messi also harmed his case by admitting that he willingly signed various financial contracts. This admission aided prosecutors in establishing that Messi was far from a mere bystander in his father’s business dealings. Further, Messi claiming that he didn’t know the details of those contracts didn’t overcome the fact that, as an adult, he should have been more inquisitive.
GALLERY: Lionel Messi through the years
Best photos of Lionel Messi throughout the years
A young Lionel Messi poses for a photo in Argentina circa 1993.
Lionel Messi celebrates after scoring Argentina's second goal against Venezuela during a South American Under-20 Championship game on Jan. 13, 2005 in Armenia, Colombia.
Lionel Messi flips into a pool during a relaxed practice of Argentina's Under-20 soccer team on Jan. 14, 2005 in Pereira, Colombia.
Lionel Messi celebrates with the trophy after Argentina won the FIFA World Youth Championships over Nigeria on July 2, 2005 in Utrecht, Netherlands.
Lionel Messi poses with the Golden Boy trophy awarded by Italian magazine 'Tuttosport' distinguishing the best player under-21 on Dec. 14, 2005 in Barcelona, Spain.
Barcelona's Lionel Messi, Ronaldinho and Rafael Marquez celebrate after defeating Espanyol to win the Spanish League on May 6, 2006 at the Camp Nou stadium in Barcelona, Spain.
Khalid Boulahrouz and Lionel Messi challenge for the ball during the World Cup Group C soccer match between the Netherlands and Argentina on June 21, 2006 at the World Cup stadium in Frankfurt, Germany.
Barcelona's Lionel Messi scores with his hand during a Spanish League match against Espanyol on June 9, 2007 at the Camp Nou stadium in Barcelona, Spain. Messi continued to draw comparisons with Argentine soccer legend Diego Maradona who scored in similar fashion during a quarterfinal World Cup match against England in 1986.
Argentina's Lionel Messi plays the ball during the 2008 Summer Olympics Men's Soccer semifinal against Brazil on Aug. 19, 2008 at Beijing Workers' Stadium in China.
Lionel Messi speaks with the media upon his arrival at the Buenos Aires International Airport on May 30, 2009.
Argentina's Lionel Messi plays the ball during the FIFA World Cup Group B match against South Korea on June 17, 2010 at Soccer City Stadium in Johannesburg, South Africa.
Argentina head coach Diego Maradona talks with Lionel Messi as they celebrate their victory over South Korea in the FIFA World Cup Group B match on June 17, 2010 at Soccer City Stadium in Johannesburg, South Africa.
Argentina's Lionel Messi plays the ball during the FIFA World Cup Round of 16 match against Mexico on June 27, 2010 at Soccer City Stadium in Johannesburg, South Africa.
Lionel Messi sits on the beach with girlfriend Antonella Rocuzzo on July 20, 2010 in Cancun, Mexico.
Lionel Messi and girlfriend Antonella Rocuzzo swim with dolphins at the Delphinus aquarium on July 24, 2010 in Playa del Carmen, Mexico.
Barcelona's Lionel Messi from vies for the ball with Getafe's goalkeeper Jordi Codina during their La Liga match on Nov. 7, 2010 at the Coliseum Alfonso Perez in Getafe, near Madrid, Spain.
Barcelona's Lionel Messi celebrates with teammates after scoring against Real Madrid during their semifinal, 1st leg Champions League soccer match on April 27, 2011 at the Santiago Bernabeu Stadium in Madrid, Spain.
Barcelona's Lionel Messi reacts after scoring against Osasuna during their La Liga match on Sept. 17, 2011 at the Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi duels for the ball with Real Madrid's Pepe, Sergio Ramos and Fabio Coentrao during their La Liga match on April 21, 2012 at the Camp Nou stadium in Barcelona, Spain.
Argentina's Lionel Messi celebrates with Gonzalo Higuain after scoring against Ecuador during their World Cup qualifying match on June 2, 2012 in Buenos Aires, Argentina.
Argentina's Lionel Messi makes a header during an International Friendly against Brazil on June 9, 2012 at MetLife Stadium in East Rutherford, N.J.
Barcelona's Lionel Messi celebrates after scoring against Real Madrid during their La Liga match on Oct. 7, 2012 at the Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi smiles during a news conference after receiving his Golden Boot award in recognition for scoring the most goals in Europe's domestic leagues on Oct. 29, 2012 in Barcelona, Spain.
Barcelona's Lionel Messi poses with his four FIFA Men's World Player of the Year awards before a Copa del Rey match against Malaga on Jan. 16, 2013 at the Camp Nou stadium, in Barcelona, Spain. Messi received the award for a record-breaking fourth successive year.
Barcelona's Lionel Messi kicks the ball during their La Liga match against Rayo Vallecano on March 17, 2013 at the Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi celebrates scoring the opening goal during their UEFA Champions League quarterfinal match against Paris Saint-Germain on April 2, 2013 at Parc des Princes in Paris, France.
Barcelona's Lionel Messi holds his son Thiago as they sit next to the trophy after winning the La Liga match against Real Valladolid on May 19, 2013 at Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi plays the ball during their La Liga match against Espanyol on March 29, 2014 at Cornella-El Prat stadium in Cornella de Llobregat, Spain.
Argentina's Lionel Messi appears on the June 9, 2014 cover of the World Cup Preview Issue of Sports Illustrated.
Argentina's Lionel Messi celebrates after scoring his team's second goal during the FIFA World Cup Group F match against Bosnia-Herzegovina on June 15, 2014 at Maracana Stadium in Rio de Janeiro, Brazil.
Argentina's Lionel Messi celebrates with teammates Angel di Maria and Marcos Rojo after scoring their first goal during the FIFA World Cup Group F match against Nigeria on June 25, 2014 at the Estadio Beira-Rio in Porto Alegre, Brazil.
Belgium's Vincent Kompany and Argentina's Lionel Messi fight for the ball during the FIFA World Cup quarterfinal match on July 5, 2014 at the Estadio Nacional in Brasilia, Brazil.
Barcelona's Lionel Messi scores his team's fourth goal during the La Liga match against Granada CF on Sept. 27, 2014 at Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi celebrates with teammates after scoring his team's fourth goal during the La Liga match against Sevilla FC on Nov. 22, 2014 at Camp Nou stadium in Barcelona, Spain.
FIFA Ballon d'Or nominee Lionel Messi poses for a portrait prior to the FIFA Ballon d'Or Gala on Jan. 12, 2015 at the Park Hyatt hotel in Zurich, Switzerland.
Barcelona's Lionel Messi attempts a bicycle kick against Valencia's Nicolas Otamendi during their La Liga match on April 18, 2015 at the Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi plays with his son Thiago after the La Liga match against Deportivo La Coruna on May 23, 2015 at Camp Nou stadium in Barcelona, Spain.
Barcelona's Lionel Messi kisses the trophy after the Champions League final match victory over Juventus F.C. on June 6, 2015 at the Olympiastadion in Berlin, Germany.
Argentina's Lionel Messi kicks the ball during their Copa America semifinal match against Paraguay on June 30, 2015 at the Estadio Municipal de Concepcion in Chile.
Barcelona's Lionel Messi scores his side's second goal past Roma goalkeeper Wojciech Szczesny during their Group E Champions League match on Nov. 24, 2015 at the Camp Nou stadium in Barcelona, Spain.
Messi poses for his second Sports Illustrated cover prior to the 2016 Copa America Centenario in the United States.
Messi jumps into the stands at Camp Nou to celebrate Barcelona's miracle comeback against PSG in the second leg of the Champions League round of 16 on March 8, 2017.
Messi shows off the back of his jersey to Real Madrid fans who witnessed his last-second winner for Barcelona in a riveting Clasico at Estadio Santiago Bernabeu on April 23, 2017.
Financial consequences and potential relevance of Brexit
Messi faces a financial penalty as part of his punishment. Prior to the trial, Messi and his father together paid more than €5 million in unpaid taxes and interest fees. Wednesday’s sentence calls for Messi to pay an additional €1.7 million and his father €1.3 million. While these figures would normally be considered steep, Messi is not the typical defendant. He is estimated to be worth in the ballpark of €200 million. Regardless of whether any appeal proves successful, Messi could likely pay off the financial fine with ease.
Argentina's Copa final failure pushes Messi toward international retirement
There are other potential financial consequences to Messi that stem from the conviction. For one, he could lose his endorsement deals. Those deals normally contain “morals clauses.” Morals clauses authorize the endorsed company to suspend or terminate an endorsement contract when the endorsing athlete commits any act that brings him or her into public disrepute or scandal. Being convicted of a crime certainly falls within the scope of a morals clause.
This is likely concerning for Messi given that he earns substantial endorsement income. Indeed, Messi has an endorsement contract with Adidas that reportedly pays him approximately $20 million a year.
There is no indication, however, that Adidas or any other company with which Messi has signed an endorsement deal would seek to invoke a morals clause. Those companies might reason that while tax fraud is serious, it is a non-violent offense and usually does not spark the kind of moral outrage that causes a radical shift in opinion about the convicted defendant. Messi is one of the most popular and recognizable soccer players alive and, until the tax evasion case, had generally avoided controversy.
The fact that Messi should avoid any prison time is also helpful in regards to his endorsement deals, since the image of Messi going to prison would damage his reputation. Messi’s ability to appeal the conviction is also relevant since his endorsed companies could conclude they ought to wait for Messi to exhaust his appeals before taking any action.
Messi’s eligibility to play professional soccer could also be impacted by the conviction. In theory—but clearly not in reality—Barcelona could explore whether Messi’s conviction violates any language in his employment contract. His contract likely requires him to be in good legal standing. Barcelona, however, has already come out with a public statement that enthusiastically supports Messi.
Further, given that Messi is perhaps the best soccer player on the planet, it’s virtually implausible that Barcelona would attempt to terminate its contract with him over this.
A potentially intriguing legal issue could emerge if Messi were to seek to play in the Premier League. On June 24, United Kingdom citizens voted 52% to 48% for the UK to leave the European Union. The vote set in motion “Brexit,” the gradual withdrawal of the UK from the EU under conditions specified in Article 50 of the Treaty on European Union. The withdrawal is expected to take several years and various commentaries suggest that intervening steps could be taken to block or at least slow it.
Should the withdrawal nonetheless advance, it would eventually lead the UK to replace EU laws with other laws—including laws on immigration matters and on the eligibility of foreign nationals to hold jobs in the UK. Messi, who was raised in Argentina, is now a Spanish citizen and enjoys the rights of other citizens of EU members. Under existing laws, he is eligible to play in the Premier League. However, should the UK adopt additional restrictions on the workplace eligibility of foreign nationals, those changes might impact whether someone with a criminal record such as Messi would be eligible to play.
Only time will tell, and that is all hypothetical and well down the line. As it relates to the here and now, Messi has been convicted of a crime, but he won't spend time behind bars because of it.
Michael McCann is a legal analyst and writer for Sports Illustrated. He is also a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. McCann also created and teaches the Deflategate undergraduate course at UNH. He serves on the Board of Advisors to the Harvard Law School Systemic Justice Project and is the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law. He is also on the faculty of the Oregon Law Summer Sports Institute.
Michael McCann is a legal analyst and writer for Sports Illustrated and the founding director of the Sports and Entertainment Law Institute (SELI) at the University of New Hampshire School of Law, where he is also a tenured professor of law.