LONDON: This week Paris Saint-Germain will find out whether they are to face Financial Fair Play (FFP) sanctions which could see them forced to sell star man Neymar.
There have been rumors that the Brazilian, bought for a world-record fee of $222 million ($261 million) last summer, wants to leave the club with PSG insisting he is going nowhere. But depending on UEFA’s findings the decision could be taken out of the club’s hands.
This season the Qatar-backed club won a third domestic treble in four years — their domination of French football is so great that all semblance of competitive balance has been destroyed.
Yet the lack of homegrown rivals has dulled the luster of PSG’s achievements and continental success remains elusive despite Qatar spending over €1 billion to establish the club as a European power since its 2011 takeover.
Such a huge outlay has irked the football establishment, this is the second time in four years UEFA have investigated the club over potential breaching of FFP regulations.
Should PSG be found guilty of again enjoying overvalued sponsorship deals from Qatari state entities, the club could be banned from European competition or face other restrictions that would limit its chances of finally challenging for the Champions League and while PSG officials have reacted angrily to suggestions of impropriety, the fact remains that without Qatari largesse last summer’s signing of Neymar would have been impossible.
In April, the Financial Times reported that UEFA’s initial investigations revealed that €200 million of sponsorship contracts had been overstated.
“The big question, clearly, is UEFA going to be brave enough to enforce their own rules?” a person close to the investigation told the FT. “If not for PSG, then frankly why bother?”
In 2014, UEFA censured PSG after deciding that the club’s sponsorship deals were overvalued. Most questionable was a four-year Qatar Tourism Authority (QTA) tie-up reportedly worth €700 million. This was signed in 2013 and backdated to 2012 — a feat seemingly impossible without recourse to a time machine.
QTA renewed its €175 million-a-year sponsorship deal with PSG in 2016, Le Parisien reported. Curiously, QTA is not listed on the club’s sponsors page of its website, although the authority’s website makes plain the importance of its association with the French champions. PSG’s top sponsors are listed as kit supplier Nike, shirt sponsor Emirates airline, plus Qatar National Bank and Qatari telecom operator Ooredoo.
When UEFA announced the current investigation in September 2017, PSG said they could sell players if required to meet FFP rules and predicted its revenues would rise 20-40 percent following the arrival of Neymar and French starlet Kylian Mbappe, currently on loan from Monaco pending a €180 million permanent transfer this summer.
PSG’s last-16 exit in the Champions League — a resounding 5-2 aggregate defeat to Real Madrid — has made achieving such a big revenue jump markedly harder; PSG and Atletico Madrid were the only clubs from Europe’s 10 biggest by revenue to earn more broadcast income from the Champions League in 2015-16 than domestic competition, underlining the importance of continental progress to the habitual French champions.
So, will PSG be found to have breached FFP?
“It may depend on how contracts with QTA are going to be taken into account,” said Jean-Pascal Gayant, Professor of Economics at Le Mans University.
If the club has to raise around €45 million from player sales, as some French media have speculated, this should be straightforward.
“If €200 million is needed, it will be tougher — if so, I’m not sure Neymar will stay long,” said Gayant.
According to FFP regulations, clubs can spend €5 million more than they earn per season. If excess spending is covered by direct payments by owners or other parties, clubs’ outgoings can exceed income by €30 million in total over a rolling three-year period.
Investments in stadiums, training facilities, youth development and women’s football are excluded from UEFA’s calculations, while clubs can spread a player’s transfer fee over the duration of his contract. UEFA had been expected to announce its final decision after PSG’s financial year ends on June 30, but French media suggest the governing body could go public with its findings as early as this week.
PSG have won 11 of the past 12 domestic trophies, with only Monaco’s unlikely league triumph last season denying them a clean sweep. Those trophies are impressive, but the club’s Qatari owners made plain European success was their target.
“We have a very clear vision,” PSG’s Qatari president Nasser Al-Khelaifi told the Financial Times in March 2014. “In five years, we want to be one of the best clubs in Europe and to win the Champions League.”
Yet PSG have failed to match their own European exploits of the mid-1990s when the Parisiens reached five consecutive European semifinals, winning the Cup Winners’ Cup in 1996. From 1993-94 to 1997-98, PSG were Europe’s top-ranked team. Under Qatari ownership PSG have been never been past the Champions League quarterfinals and exited at the last-16 stage for the past two seasons.
“We had a similar experience to what we have now but back then it was achieved in a fairer way,” said Pierre Barthelemy, 32, a Parisien lawyer, life-long PSG fan and an elected member of the Board of the French National Fans Association (ANS) and of Football Supporters Europe (FSE).
“From 2011, we’ve been successful because someone put a lot of money into the club but still haven’t matched the level of the team back then. That was legitimate, but from 2011 it’s not been so legitimate. In the 1990s, it was the result of building a project for many years, whereas this decade it came from nowhere.”
The lack of a nearby challenger means many fans are less committed, in contrast to the passionate rivalry between the likes of Atletico Madrid and Real Madrid fans, for example, while migration from France’s provinces has diluted Parisiens’ sense of identity.
“There’s nothing in the city that refers to the club. Paris is not a city with its own culture, most residents identify more with the culture of where they are from,” added Barthelemy.
“Qatar’s ownership hasn’t made any difference to the profile of PSG within Paris, apart from among young kids who will now support the club. Paris isn’t a city committed to sport or its own culture.
“The league is boring. After 10-15 games we know we’ll win it, but in the cup you can be eliminated in every game and no other club in Europe has gone so long unbeaten in cup competitions.
“We could lose five games and still be league champions. As a fan, it’s easier to get excited about the cups.”
Le Mans University’s Gayant said it was tough to decide whether Qatar’s huge investment in PSG had been positive for French football.
“On one hand, there is again a French team in the top 10 in Europe,” said Gayant. “On the other, the gap between PSG and others French teams is so huge that the only interesting thing is who will be second and third?
“PSG is the most hated team in France and also the most popular. French fans are schizophrenic — they’re both bored and enthusiastic.”
PSG responded to Monaco’s brief ascendancy by signing Mbappe, their rival’s most coveted player. If that deal is made permanent, PSG will have spent €402 million on him and Neymar, the two most expensive signings in history.
Both were opportunistic signings borne out of circumstance, rather than the culmination of a long-term transfer policy as the club opted to recruit two expensive forwards instead of addressing the team’s glaring weaknesses in goal, defensive midfield and left-back.
The result? Another early European exit, although Neymar’s transfer was in part a political response to the blockade of Qatar by former allies Saudi Arabia, Bahrain, Egypt and the UAE, which accuse Doha of supporting terrorism.
Overall, PSG have been profligate, spending €935 million in the seven seasons since the Qataris took over, recouping €219 million in player sales over the same period for an overall net spend of €716 million, or €102 million per season, according to transfermarkt.com. Those figures do not include Mbappe’s fee.
Clubs in France’s top two divisions collectively made a profit of €3 million in 2015-16 — the most recently publicly available figures — ending seven straight years of losses thanks to a €429 million profit in the transfer market.
France’s success in nurturing young football talent should be applauded, but effectively all teams except PSG are selling clubs, unable to hold onto their best players, strengthening Parisien dominance.
Monaco, who reached the Champions League semifinals in 2017, sold €358 million of players last summer, for example, eviscerating the principality’s young squad and ending their chances of defending the French title before a ball had been kicked.
“It was a miracle Monaco won the French championship in 2017,” said Gayant. “Fortuitously, Monaco had 6-7 young top class players — Mbappé, Bernardo Silva, Tiémoué Bakayoko, Benjamin Mendy, Thomas Lemar, Fabinho — but such a set of circumstances will probably not happen again in the next 50 years.”
PSG are the only French club to make the top 20 in Deloitte’s 2016-17 European soccer Money League, falling to seventh, their lowest ranking since 2011-12.
PSG rank sixth for commercial revenue but only 18th in broadcast revenue, with French football having little catchment beyond its borders. Lyon, in 21st, are France’s only other representative in the top 30, underlining PSG’s destruction of any domestic competitive balance.
“With the lowest value domestic broadcast deal of any of the ‘big five’, France is unlikely to have more than two clubs in the top 30 for the foreseeable future,” Deloitte wrote.