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How can UEFA possibly ignore their spending?
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Re: How can UEFA possibly ignore their spending?
No club that plays in UEFA sanctioned competitions will have their spending ignored.
But you cannot simply look at one team and say, because they've spent €400M that they've broken FFP rules.
Firstly, we don't know what their current profit is for FFP accounting purposes so how much wriggle room they currently have.
The Neymar transfer hits their P&l account to the tune of about £90M a year (amortisation and wages) and the Mbappe/Fabinho will be something a little lower, but still around £65-£70M.
So they need more 'profits' to make up this shortfall or they need to sell some players to make a paper profit on them. Matuidi has already left and I've no doubt a couple more good priced players will leave (Draxler, Di Maria etc.). Not only will this help to reduce their wage bill to the tune of, let's say, £25M a season, it will probably also have a one off bonus to the p&l account if players are sold for a 'book profit' (sales price less net book value).
So, let's say PSG are making a small profit in terms of FFP accounting currently of £10M. They need to find additional FFP profits of about £150M a season to make ends meet. Well, I've found £25M above. They'll need more tv and commercial revenues. I've no idea what scope they have with their domestic tv deal to increase income. With CL monies, they'll have to go further in the competition to get more money but that will only probably be worth £10-£20M a season and that isn't guaranteed.
Renegotiating their kit deal and shirt sponsorship seem the most obvious way of quickly increasing their income.
Currently, Emirates (no link to Qatar so not questioned) pay €25M a season for shirt sponsorship in a 5 year deal due to finish next year I think. Since United and Chelsea get £75M a season and Liverpool get £60M a season (I think), it would seem quite reasonable to up their shirt sponsorship deal to those levels. They may try and push it a little higher without too much question so why not bang it out there at £100M a season? In a stroke, you've almost financed the Neymar deal.
You could argue that this is too much, but I think it would be accepted without too much problem. Chelsea did their deal a couple of years ago and, you could easily argue, that amounts are constantly increasing.
Last year, it was mentioned that Chelsea will get £50M a season from Nike. PSG currently gets €24M from Nike. There was talk that they wanted an extra €15M a season, but why can't they push Nike to pay Chelsea levels of money? That's an extra £30M a season.
I've already 'found' an extra £135M a season, so finding an extra £30M on top of that wouldn't be impossible with many current sponsorship deals being re-negotiated upwards and new, very lucrative ones, about to be signed. Throw in a few post season and pre season friendlies at £5M a pop and you'll soon find the difference required to satisfy FFP.
So, whilst on the outside, it may look as if PSG are flouting FFP, I hope that I've shown that it isn't necessarily the case and that they could well meet the requirements. Their problems will be when they want to buy more players as you can't keep going to the well. Or can you?
But you cannot simply look at one team and say, because they've spent €400M that they've broken FFP rules.
Firstly, we don't know what their current profit is for FFP accounting purposes so how much wriggle room they currently have.
The Neymar transfer hits their P&l account to the tune of about £90M a year (amortisation and wages) and the Mbappe/Fabinho will be something a little lower, but still around £65-£70M.
So they need more 'profits' to make up this shortfall or they need to sell some players to make a paper profit on them. Matuidi has already left and I've no doubt a couple more good priced players will leave (Draxler, Di Maria etc.). Not only will this help to reduce their wage bill to the tune of, let's say, £25M a season, it will probably also have a one off bonus to the p&l account if players are sold for a 'book profit' (sales price less net book value).
So, let's say PSG are making a small profit in terms of FFP accounting currently of £10M. They need to find additional FFP profits of about £150M a season to make ends meet. Well, I've found £25M above. They'll need more tv and commercial revenues. I've no idea what scope they have with their domestic tv deal to increase income. With CL monies, they'll have to go further in the competition to get more money but that will only probably be worth £10-£20M a season and that isn't guaranteed.
Renegotiating their kit deal and shirt sponsorship seem the most obvious way of quickly increasing their income.
Currently, Emirates (no link to Qatar so not questioned) pay €25M a season for shirt sponsorship in a 5 year deal due to finish next year I think. Since United and Chelsea get £75M a season and Liverpool get £60M a season (I think), it would seem quite reasonable to up their shirt sponsorship deal to those levels. They may try and push it a little higher without too much question so why not bang it out there at £100M a season? In a stroke, you've almost financed the Neymar deal.
You could argue that this is too much, but I think it would be accepted without too much problem. Chelsea did their deal a couple of years ago and, you could easily argue, that amounts are constantly increasing.
Last year, it was mentioned that Chelsea will get £50M a season from Nike. PSG currently gets €24M from Nike. There was talk that they wanted an extra €15M a season, but why can't they push Nike to pay Chelsea levels of money? That's an extra £30M a season.
I've already 'found' an extra £135M a season, so finding an extra £30M on top of that wouldn't be impossible with many current sponsorship deals being re-negotiated upwards and new, very lucrative ones, about to be signed. Throw in a few post season and pre season friendlies at £5M a pop and you'll soon find the difference required to satisfy FFP.
So, whilst on the outside, it may look as if PSG are flouting FFP, I hope that I've shown that it isn't necessarily the case and that they could well meet the requirements. Their problems will be when they want to buy more players as you can't keep going to the well. Or can you?
Topdawg- Legend
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