Neymar’s transfer exposes dark underbelly of beautiful game’s finances
The summer’s most protracted transfer saga came to an end last week with Neymar swapping the claret and blue of Barcelona for the red and blue of Paris Saint-Germain.
What made the circus surrounding the biggest transfer in football history so distasteful and ominous was the obscene amount of money that changed hands. For starters, this was not only the first £100m transfer in football history, it also smashed the previous world record — £89m paid by Manchester United to Juventus for Paul Pogba last summer — by a whopping £109m. Apart from the £198m release clause paid to Barcelona, the player himself will earn more than £500,000 a week as well as a signing-on bonus of £40m.
All this from a club that has already fallen foul of Uefa’s Financial Fair Play regulations once.
Uefa came up with the fair play rules to prevent clubs benefiting from “sugar-daddies” with deep pockets, a concept that first reached English shores with Roman Abramovic’s buyout of Chelsea. Since then, the likes of Manchester City and Paris Saint-Germain have benefited hugely from the oil money of the Middle East, with wealthy owners investing significant personal wealth into the clubs and acquiring top players at extravagant prices.
When France legend Zinedine Zidane moved from Juventus for Real Madrid for a then world record fee of £45m, it shook the foundations of football. Since then, the world record has been broken several times, Real Madrid responsible for three of them. But none witnessed the seismic shift that is being seen as a fallout of the Neymar saga.
The amount of money floating around in football now is obscene, to say the least. The Premier League stands to receive £10.4bn — £5.3bn for the broadcast of live matches by Sky and BT and ancillary deals, plus another £5.1bn from the sale of overseas rights for a three-year period — which will be divided among the 20 top flight clubs in England.
While this deal came as a boon for the smaller clubs, which were no longer compelled to sell their best players, it also armed the bigger ones with additional cash flow. Football clubs, these days, have dedicated commercial departments that oversee the marketing of the club brand, ensuring that the revenue keeps flowing even if the performance on the pitch fails to match up. This allowed the bigger clubs to throw wads of cash in front of their smaller rivals, inflating the entire transfer market as a result.
TV money aside, sponsorships also play a big role in football these days. Club owners will allow any and every company on Earth to use their club’s image to promote a brand — as long as they are compensated handsomely for it. Manchester United’s 40 plus global and regional partners, including official paint and tyres partner, are a case in point.
Gareth Bale’s £85m transfer to Real Madrid in 2013 was just one example of a European heavyweight flexing its financial muscle. The Spanish giants signed a player who had played just a couple of seasons in the Champions League and while exciting, was nowhere the exceptional talent to command a world record fee. Four years earlier, Real signed Cristiano Ronaldo for £80m from Manchester United. The Portuguese, however, was a Ballon d’Or winner by that time and was already being seen as the best player of his generation.
A sign of how insane sums change hands during transfers is seen through Monaco’s valuation of Kylian Mbappe. The 18-year-old burst onto the scene last season and European heavyweights Real Madrid, Barcelona and Manchester United have been on his trail. Monaco have put a £160m valuation on the player, who has played just 40 league games for the Principality club, translating to around £4m per match.
Clubs like Real Madrid not only changed the transfer landscape, but also began a system where newspapers with connections to the club were used to unsettle a player to force the selling club’s hand. Paris Saint-Germain followed a similar approach with the Neymar deal.
But even then, Barcelona believed it had a firm grip on the player considering his release clause. Many clubs now insert insanely high buyout clauses in contracts to thwart potential suitors. But that didn’t deter Paris Saint-Germain and it shook the football world when it coughed up the sum, including tax, to La Liga.
La Liga president Javier Tebas, in an interview, raised the question of the club’s capacity to afford the fee. “In terms of PSG (Paris Saint-Germain), it is a clear case of financial doping, with the club and the state. PSG’s accounts show that they have a larger commercial income than Real Madrid and Manchester United, which is to say that the value of their brand is greater than those clubs. Well, that is impossible,” he told Spanish newspaper AS.
In another interview to Catalan radio station RAC 1, Tebas said: “What we want to understand is the origin of this €222m, if it is illegal. If Manchester United were to come, there would be no problems, we would have nothing to say because it is not a doped club. PSG is a state-run club and we have to end this situation as soon as possible.”
Allegations over the source of the club’s finances have arisen before as well. The club is owned by a sovereign wealth fund which invests Qatar’s vast oil and gas wealth in overseas companies. On paper, it is owned by Qatar Sports Investments, a business venture of Nasser Al-Khelaifi, who is a minister in the Qatar government, and club president.
In 2013, the club signed a £167m contract with the Qatar Tourism Authority, later found to be in breach of the Financial Fair Play rules. The sponsorship deal was deemed to have an unfair value by Uefa’s independent investigation panel. The Qatar Tourism Authority is also a branch of the Qatari state and the deal between the two was deemed by Uefa to be a “related party transaction”.
There were even suggestions that Neymar would pay his own release clause by signing a £270m contract for five years to become an ambassador for the 2022 Fifa World Cup in Qatar. This goes to show how Paris Saint-Germain, as a football club, and the Qatari state are intertwined with each other. There have already been allegations of Qatar bribing Fifa officials for the rights to host football’s most iconic championship.
Clubs have long been leeching the fans who have maintained loyalty through thick and thin, turning the beautiful game into a business. Exorbitant season ticket prices, especially in England, new jerseys every year, replicas of which are sold at princely sums, take a lot out of the fans’ pockets. These marquee signings, many would claim, are nothing but a means to compel them to spend money on tickets.
Liverpool fans love to harp on legendary manager Bill Shankly’s famous saying: “Some people think football is a matter of life and death. I assure you, it’s much more serious than that.” For football club owners, it is about squeezing the maximum amount out of the fans’ pockets.
Football garnered the support that it has through its simplistic roots — just a few boys or girls and a ball are all that is required to have a good time. Business has ruined that beautiful game.
The views expressed in this blog are mine unless otherwise mentioned.