How PSG can sign Neymar for €222m and not break FFP rules
Financial Fair Play was brought in to control spending, among other things, so how are PSG in a position to obliterate the transfer record?
While Gerard Pique’s “gut feeling” is that Barcelona team-mate Neymar will remain in Catalunya, the Brazilian’s reluctance to comment on the issue means that a world-record transfer to Paris Saint-Germain cannot be ruled out this summer.
The forward is, of course, under contract to the Blaugrana until 2021 but he has a buy-out clause of €222 million and, remarkably, PSG are willing to pay it.
Given the current world transfer record is €105m, which Manchester United paid Juventus for Paul Pogba last summer, Neymar’s move would be truly game-changing, as Liverpool boss Jurgen Klopp acknowledged last week.
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“If it’s not a rumour, then, it’s more than the next level, it’s really not from this planet anymore,” the German exclaimed.
“Two hundred and twenty two million Euros?! I can’t believe that something like this would happen.”
However, more people are wondering how something like this could happen in an era supposedly governed by UEFA’s Financial Fair Play (FFP) regulations.
WHAT IS FINANCIAL FAIR PLAY?
According to UEFA themselves, FFP is essentially “about improving the overall financial health of European club football”.
Introduced in 2010, the brain-child of former president Michel Platini was an attempt to force clubs to spend within their means; to bring an end to clubs running up huge debts and running the risk of bankruptcy.
In short, clubs “have to prove they have paid their bills”. If they haven’t, they can be excluded from competing in UEFA competitions.
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Basically, the goal is to ensure that all clubs adhere to their break-even requirements over three-year periods but they can spend up to €5m more than they earn every assessment period “if it is entirely covered by a direct contribution/payment from the club owner(s) or related party”.
The current limit, though, is €30m (2015-16, 2016-17, 2017-18).
CAN PSG AFFORD TO SIGN NEYMAR?
PSG are not only ready to meet Neymar’s €222m buy-out clause, they’re also offering the Selecao star a five-year contract with an annual net wage of €30m, and €40m in commission bonuses to his father and agent, Neymar Santos Sr.
Under the FFP regulations, wages cannot account for more than 70 per cent of a club’s income. In 2016, 54% of PSG’s revenue was being spent on their players’ salaries.
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Even with Neymar’s colossal €60m gross wage, their salary spending would still only constitute 65% of their income, meaning they would not be contravening FFP requirements.
Indeed, the greater issue for PSG would be their overall expenditure.
The capital club made a €10m profit in 2016 but having Neymar on their books would see their annual expenses rise by approximately €100m (€60m in wages and €44m in amortization of the transfer fee).
However, PSG believe that this surge in spending would be easily offset by the massive boost in merchandising sales that would be trigged by one of the most marketable and popular players in world football.
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Even if that spike failed to completely cover all of the Neymar-induced increase in expenditure, the Parisians could easily boost their coffers by selling some of the high earners that would be rendered surplus to requirements due to the forward’s arrival at the Parc des Princes.
In short, signing Neymar makes both sporting and financial sense for PSG’s wealthy Qatari owners.
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