President Joan Laporta insists that Barcelona had no choice but to part ways with Lionel Messi due to the club's already precarious financial situation.
Laporta said the club and Messi had both wanted to sign a new contract, but salaries already represent 110% of the club's earnings, meaning they are spending much more than expected and such a move would be financially risky.
"The club is above everything – even above the best player in the world," Laporta told a news conference.
Barca's all-time top scorer and appearance maker technically ended his 21-year association with the club at the end of June and is currently a free agent after his previous contract expired.
Messi's last contract, signed in 2017, was the most lucrative in world sport, according to a January report in newspaper El Mundo.
Laporta said the club had lined up two new deals with Messi, firstly a two-year deal made payable over five, and then a separate five-year deal.
But he said that they were unable to get either deal done because of La Liga's Financial Fair Play rules, and that he was not willing to agree to the league's proposed private equity investment from CVC solely in order to secure Messi's future.
"In order to meet FFP, Barca had to agree to an operation, essentially remortgaging the club, which would affect us for the next 50 years in terms of TV rights, and I had to make the decision.
"We cannot put the institution at greater risk."
Laporta said that the coronavirus-impacted 2020-21 season's financial losses would be double what had been expected.
"We need to move on. We won't just try to meet FFP criteria by putting the club at risk for the next 50 years," he told reporters.
The Barca chief also said that the financial situation that he had inherited from former club president Josep Maria Bartomeu was "far, far worse" than anticipated.
"I said we'd do everything possible to keep Messi at Barca within the economic situation of club," he said.
"We reached agreement but couldn't formalise it, because of the club's economic situation, which means we can't register the player due to salary limits. I don't want to go on and on about the situation we inherited, and the awful decisions that were made in the past. We have gone from bad to worse."
Paris St Germain have apparently undertaken a commercial analysis and determined that signing Messi would work within the confines of Financial Fair Play rules.
The personal connection between Messi and PSG coach Mauricio Pochettino, and the fact the deal is a free transfer are both factors in PSG pursuing the deal.
They believe Messi's signing would drive up their commercial revenues, both in Europe and worldwide, should he link up with Brazilian star Neymar.
The French club had been in contact with Barcelona earlier in the summer regarding Messi but thought the chance to sign him had passed when it was indicated he would be staying in Catalonia.
