Financial Fair Play Rules: UEFA opens Paris St Germain FC investigation
By Prof Dr Ian Blackshaw
Following the closure on 31 August of the 2017 Summer Transfer Window, UEFA, the Governing Body of European Football, announced that it was opening a formal investigation against Paris-St Germain (PSG) FC under the Financial Fair Play (FFP) Rules.
In a short statement, UEFA said that “the investigation will focus on the compliance of the club with the break-even requirement, particularly in light of its recent transfer activity.” And added that: “UEFA considers that Financial Fair Play to be a crucial governance mechanism which aims to ensure the financial sustainability of European club football.”
Under the break-even requirement, clubs can spend €30 million more than they earn over a three-year period.
The UEFA investigation will centre around the world record transfer of Neymar from FC Barcelona to PSG for the sum of £200 million and also the one-year loan transfer from AS Monaco of Kylian Mbappe, on the conclusion of which, according to the terms of the contract, the player will be transferred permanently for an agreed sum of £187 million. Reading between the lines, this latter arrangement, which UEFA will also investigate, seems to be a way of circumventing the FFP Rules.
UEFA, it appears, has not only acted on its own initiative, but also on complaints from, amongst others, Real Madrid CF.
PSG is reported to have been “surprised” by the UEFA move and that “it is very confident in its ability to demonstrate that it will fully comply with the Financial Fair Play rules for the fiscal year 2017/2018.”
PSG added that it has many “high value” players under contract that it could sell to balance the books and is expecting to increase its revenues by between 20% and 40%.
PSG is owned by the Qatar Sovereign Wealth Fund, QSI, and the club was the subject of a previous UEFA FFP investigation in May 2014 in relation to a sponsorship deal of €200 million a year with the Qatar Tourism Authority, which, it was alleged, had artificially inflated the club’s income.
Breaches of the UEFA FFP Rules include exclusion from UEFA competitions, especially the lucrative Champions’ League, and reducing the size of a club’s squad.
The UEFA FFP rules, which were introduced in 2011 as an extension to the UEFA club licensing system, are highly complex and technical; and further information about them may be found in the article, appropriately entitled ‘UEFA’s Financial Fair Play Regulations: the devil is in the detail’ by Tom Serby, published in the June 2014 issue of ‘Global Sports Law and Taxation Reports’ at pp. 6-11.
It was only to be expected that these mind-boggling transfers during the 2017 Summer Transfer Window would attract the attention of the football authorities and it will be interesting to see the outcome of the UEFA investigations, in due course.