Paris Saint-Germain FC (PSG) has had remarkable success and won many ligue 1 titles and French cups despite the club being relatively young, being founded in 1970. For a very long time, Paris did not have a football club that truly belonged to the elite, however, this finally changed in 1970, when a group of businessmen merged Paris FC and Stade Saint-Germain into a single club named PSG. After being promoted to Ligue 1 in 1972, PSG eventually won back-to-back French cups in 1982 and 1983, and won their first Ligue 1 title in 1986. Since then, being led by various star players and new ownership, PSG has won many more French titles, and only one European title (Cup Winners’ Cup 1996).
In 2011, PSG was bought by Qatar Sports Investments, a Doha-based fund with close links to the Qatari royal family, and has since then been generously sponsored by Qatari firms and made the club the richest in France and one of the richest in the world. This deal sparked controversy due to sports washing which describes the way sport is used to launder a reputation, to gloss a human rights record, to wash a little blood away and essentially improve one’s image.
Additionally, many controversies have arisen due to the massive amount of money that the Qatari owners have been able to inject into the club that comes at odds with financial fair play regulations of UEFA. Firstly in 2014, PSG’s 200 million euros sponsorship contract with the Qatar Tourism Authority was deemed an unfair value by UEFA and caused the club to fail UEFA’s financial fair play regulations that require clubs not to spend more than they earn, and if they do they can only fall within a limit of 30 million euros across three years. Consequently, PSG was hit with a large fine in 2014 and forced to play with a reduced squad in Europe for a season.
Later in the summer of 2017, PSG gained media attention again as they spent more than 400 million euros on the purchases of Neymar and Mbappe, which caused them to come under the scrutiny of UEFA again. However, UEFA’s investigation concluded that despite PSG’s record spending, with the help of its disputed sponsorships, the club only incurred a loss of 24 million euros over the three-year period. This decision by UEFA was also deemed highly controversial and was heavily disputed.
As PSG recently bought Messi, Ramos on free transfers, and executed contract release clauses of players such as Achraf Hakimi, Gianluigi Donnaruma, and Gini Wjinaldum, PSG’s new squad now earns a combined total of more than 300 million euros net, equivalent to 37% of the total Ligue 1 salaries. Surprisingly enough, this does not go against UEFA’s financial fair play rules as Ligue 1 does not have a salary cap as for example LaLiga Santander has had since 2013. However, as we consider PSG’s accumulated losses of 200m euros last season, and the current outlay of 300m euros in salaries, this goes against the financial fair play requirement to breakeven, and therefore there is cast doubt about whether PSG will be able to keep all their players as the next financial fair play review comes at the end of the 2021/22 season. Should PSG be fined or potentially have points deducted due to their financial fair play?
This is a very interesting article, especially because I am not too familiar and up to date with what is going on in soccer. PSG is definitely one of the premier soccer clubs in the world, and it is interesting to learn about how they rose to becoming a consistent, talented soccer club.
ReplyDeleteI am very interested in this article, due to the fact that ever since Zlatan went to PSG I have become a large fan of there organization. He brought in such a large crowd of fans and encouraged so many stars to come out and play for PSG that he started a new powerhouse over here in Europe. Now with arguably the three best attackers in the world on their team, everyone, worldwide knows who PSG is and that they are the team to beat in Europe.
ReplyDeleteI am not surprised that soccer fans across the world were upset with the recent signings PSG has made, but more so surprised that they had the finances to complete all of these transfers. That goes to show the amount of financial power that is being poured into the club. I am also surprised to see that Ligue 1 does not have a similar rule to the FFP act like the Spanish league does. Maybe in the future they will implement a rule, but money talks and I doubt it will occur anytime soon.
ReplyDeleteThis blog is intriguing and I feel like it really ties in well with the theme of your blog. Over the past 20 years, the middle east has infiltrated the European Sports market, therefore making it a priority to embrace western culture at its core. The most ironic part of its decision to do so is that countries like Saudi Arabia--although they just recently acquired Newcastle--continue to berate Qatar with sanctions predicated on religious quarrels. Qatar seems to be the most humane of this group, but they still have a bottomless clip of ammo when it comes to cash (which is reflected in their belligerent spending habits).
ReplyDeleteI remember hearing about the signings of both Neymar and Mbappe a few years ago and more recently, Lionel Messi. My very first thought was; How can they possibly afford this? After reading the article, I'm beginning to understand how this was possible due to the clubs close links with the Quatari royal family. While some people may believe that PSG should be penalized, I think they should face no consequences because Ligue 1 does not have a salary cap.
ReplyDeleteThis was a great article and wrapped up nicely. I never knew had accumulated losses of 200m from last season. It will be interesting to see where their big stars end up in the next couple years. Is Mbappe finally headed to Real Madrid? Could PSG make some money on selling Messi? Additionally, why should one league (LaLiga) have a salary cap while another league (Ligue 1) does not? To me, either all leagues or none should have the salary cap.
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ReplyDeleteThis post was very informative because I am not an active soccer fan. I am surprised at how much money PSG was willing to spend to get Messi on their team. $24 million euros seems like a lot of debt to go into over such a short period of time for a club. It makes me wonder if Qatar was the worst thing to happen to PSG.
ReplyDeleteThis was a very interesting blog post that introduced a controversy that I was not familiar with originally. Based on this and solely this, I think there has to be some regulation with the amount of money PSG can spend in order for Ligue 1 to be somewhat financially fair. If UEFA just lets it happen, it will be a bigger amount next time, just like it was when they signed Neymar and Mbappe. However, I think another problem is Ligue 1 not having a salary cap. If they put a salary cap in place, then it wouldn't be as big of a problem and as much of a
ReplyDeletemonopolized league. I would be interested to see what UEFA does as I think some regulation is needed to maintain fair competition.
Paris Saint Germain is a perfect case of how rich owners can completely transform a club. The wealth of the Qatari group has brought a "relatively" new club and made it one of Europe's premier powerhouses. However, the scrutiny that comes with their financial decisions is well deserved. Even with their violations of financial fair play and the signings of many superstars, PSG has still yet to be crowned champions of Europe, and they also did not win the league last year. This brings into question how valuable is it to have extremely wealthy owners? Also what is the limit these wealthy owners have in terms of their spending capabilities?
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