Neymar deal might breach financial fair play rules

06 August 2017 - 00:00 By Financial Mail

When Barcelona inserted a €222-million buyout clause into the contract of new signing Neymar four years ago, club officials believed no rival could afford such an astronomical fee.
This week Paris Saint-Germain activated the clause, forcing the Spanish club to allow the Brazilian player to open talks on the most expensive transfer in football history.
Now that the Neymar deal has gone through it will shake up football. The sport's authorities are under pressure to scrutinise the transfer, which challenges the efficacy of rules designed to ensure clubs do not spend beyond their means. The acquisition could signal a shift in the power balance among Europe's elite clubs.
Barcelona, one of Europe's superpowers, have lost of one their star players against their will. The Spanish club's history could not match the raw financial clout of PSG, owned by state-funded Qatar Sports Investments. Industry experts said the move also showed how a team sport has moved towards a superstar-centric financial model."If you think how football was 30 years ago, then the overwhelming majority of a team's money came from the local fan base," said Stefan Szymanski, author of Money and Football: A Soccernomics Guide.
"The difference today is the global reach of teams, through all forms of media, so that the revenue-generating potential comes from global celebrities like Neymar, [Lionel] Messi and [Cristiano] Ronaldo."
Some had looked to challenge the deal.
On Thursday the player's representatives went to the Madrid offices of the Spanish La Liga, attempting to pay the full amount to complete the transfer on behalf of PSG.
La Liga said it rejected the payment, though wouldn't comment on what grounds it did so. PSG declined to comment.
Later on Thursday lawyers made the payment directly to Barcelona, which unilaterally terminated Neymar's contract. The club said it would flag the transaction to Uefa, European football's governing body, so that it could "determine the disciplinary responsibilities that may arise from this case".
Barcelona had insisted the world record fee be "deposited in its entirety". The unusual demand will make it harder for PSG to adhere to rules introduced seven years ago by Uefa that places curbs on how much teams can spend as a proportion of income.
The so-called financial fair play (FFP) rules were revised in 2015, so clubs must show that they do not have losses of more than €30-million over a three-year period.
Javier Tebas, the president of La Liga, has said he believes the deal would breach FFP.However, under the rules, PSG would not book the transfer fee up front, but would account for the deal over the length of the contract, a five-year deal, worth €30-million a year after tax to the player.
As a result, Uefa said the French side has several years to raise the revenues required to fund the Neymar acquisition, "notably as Paris Saint-Germain could well sell several players for a significant amount".
It added: "We shall therefore only make calculations at the end and make sure that they respect the rules."
Daniel Geey, partner at law firm Sheridans, said he would also expect Paris Saint-Germain to raise revenues by creating new commercial deals, particularly through endorsements based around Neymar.
The club's hierarchy will also hope the 25-year-old Brazilian can lead them into the latter stages of the Champions League, which would provide increased prize money and broadcasting income...

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