Ligue 1 giants Paris Saint-Germain (PSG) went on a summer spending spree with the signings of two mega stars in world football in 2017. The Parisians agreed to deals for Barcelona star Neymar Jr and Monaco forward Kylian Mbappe. PSG spent a combined amount of over €400 million. Recent reports suggest that PSG escaped UEFA regulations.
These deals came under the watch of UEFA for a possible violation of Financial Fair Play (FFP) regulations within a month. The main point that went against the club was that they did not lay off players to fund the two major signings.
However, after a year’s investigation, PSG were cleared of the FFP charges labelled against them. According to FFP regulations, a club can spend an amount equivalent to the income that it has earned. Regulations also suggest that if the expenditure is more than income, it should not breach the €30 million-mark over three years.
Jose Narcisco da Cunha Rodrigues, a former judge at Europe’s top court and chairman of UEFA panel that penalises teams for breaking FFP rules, realised that UEFA had given leeway to the club in the said case. The PSG FFP case was earlier investigated by former Belgian prime minister Yves Leterme. Leterme was the one responsible for granting clearance to Nasser al-Khelaifi-owned PSG.
During the investigation, LaLiga president Javier Tebas had criticised the likes of PSG and Manchester City. He had claimed that these clubs were sponsored by gulf countries, making it difficult for other clubs to compete financially.
However, PSG’s argument relied on the sponsorship deals that the club had received over time. The Parisians cited their sponsorship deals with Qatari Telecom Company Ooredoo, the Qatar National Bank as well as the massive amount received from Qatar Tourism Authority. These arguments were largely endorsed by Leterme.
Que Deus nos abençoe e nos proteja 🙏🏽⚽️ pic.twitter.com/1lFFU1mEgC— Neymar Jr (@neymarjr) January 26, 2020
Da Cunha Rodrigues rejected the arguments put forward by Leterme in granting clearance to PSG. He also criticised the decision for not analysing Leterme’s report again. In the meantime, PSG filed an appeal in the Court of Arbitration for Sports. The club stated that certain procedural errors led to Leterme’s decision in favour of PSG stand.
UEFA was satisfied with PSG’s argument and decided to give a clean sheet to the club. This decision is also believed to be an impact of PSG owner Nasser al-Khelaifi. He is a member of the UEFA Executive Committee as well as the Chairman of beIN Sports.
Nasser al-Khelaifi is thought to exercise immense influence in UEFA. He is alleged (investigation is underway) to have bribed FIFA officials to secure broadcasting rights for the FIFA World Cup 2020 that will be hosted by Qatar.
According to The New York Times, who have received the papers pertaining to the case, Leterme gave major leeway to PSG. The Ligue 1 club claimed to have spent about €24 million, which is still less than the permitted €30 million mark. PSG cited their sponsorship deal with Qatar Tourism Authority, valued at €100 million, for their summer spending in 2017. To ascertain a proper clarification of the deal, UEFA Financial Investigator commissioned a sports company Octagon Worldwide to analyse the deals.
On the other hand, PSG were also allowed to commission a separate company - Nielsen - to carry their own study. While Octagon Worldwide report suggested some complicity in the sponsorship deals, Nielsen produced a report which largely justified PSG’s stand.
In the event of two contradictory reports, Leterme was expected to conduct a third-party study to understand the real issue. However, he decided to favour Nielsen’s report and accepted its arguments. This led to PSG’s acquittal in the FFP case.
PSG’s victory also has significance for a similar case involving Manchester City. It is alleged that City football group, which is owned by Khaldoon al Mubarak, the brother of the ruler of Abu Dhabi Khalifa bin Zayed al Nahyan, have breached FFP rules. There have been constant reports of UEFA banning the Premier League outfit due to breach of financial fair play regulations.
Recent developments in the case suggest that City have sought damages accrued to the club due to leak of confidential information pertaining to the case. City had tried to halt the FFP investigation by appealing to the Court of Arbitration for Sports. However, their appeal was turned down by CAS.
City were fined £49 million by UEFA in 2014 for breach of regulations. UEFA investigators have made it clear that they would demand stringent action if the club is found guilty. It could lead to a possible ban on participating in the Champions League.