By Jonathan Copping, Sports Lawyer, Bolt Burdon Law Firm, London, United Kingdom
Barcelona have confirmed that Paris Saint-Germain (PSG) have paid €222 million (£200 million), the amount of Neymar’s buy-out clause, triggering his transfer to PSG.
It is reported that Neymar has signed a five-year contract worth £40.3 million per year (£775,477 per week). The total value of the transfer, inclusive of the fee paid to Barcelona and Neymar’s wages over the term of the contract, will be in excess of £400 million!
The astonishing size of the deal eclipses the previous world record of €105 million (£89.3 million) paid, in last year’s Summer transfer window, by Manchester United to Juventus for French midfielder, Paul Pogba.
However, questions have been raised as to exactly how PSG are able to afford this transfer, considering the fact that they have not had to sell any players in order to fund the transfer. In particular, questions have been raised regarding UEFA’s Financial Fair Play (“FFP”) rules, which stipulate that clubs must balance their spending with their revenues. Clubs are required to spend not more than €5 million more than they earn during an assessment period of three years, although they can exceed that amount, up to a certain limit, if the entirety of the spending is covered by a direct payment from the club’s owner or a third party. The limit for the seasons 2015/16, 2016/17 and 2017/18 is €30 million.
PSG is owned by Qatar Sports Investment, a subsidiary of Qatar Investment Authority, the Sovereign Wealth Fund of Qatar. This essentially means that PSG is funded by revenues created from Qatar’s exports that are invested in the Qatar Investment Authority. This ownership model is far removed from the ownership models of other football clubs, which are usually owned by wealthy individuals, consortiums or, occasionally, by companies.
In order to satisfy the FFP rules, PSG could attempt to recoup some of the money spent on Neymar by selling other players, although it will be the case that they will not receive, by way of transfer fees, anything like the amount they have paid out. Another option would be for PSG to look at obtaining some lucrative commercial deals, one source of which could be from companies in Qatar.
There is little doubt that, prior to completing the transfer, PSG will have fully considered the potential FFP implications of the transfer, having previously being subjected to FFP sanctions that were only lifted in 2015.
With the new football season starting later this month, it will be interesting to see exactly what Neymar’s impact will be on his new club. PSG are heavy favourites to win the French title, but it has long been known that the Qatari owners have their eyes on the greatest football prize of all: the Champions’ League.
Whether a world record transfer deal can deliver that prize, only time will tell!
Jonathan Copping can be contacted by e-mail at ‘JonathanCopping@boltburdon.co.uk’