Last week Paris Saint-Germain not only signed David Beckham, but also concluded a five year sponsorship deal with Emirates worth £108m. Given that their previous sponsorship deal was around £3.5m a season, it’s a big leap forward, although it has to be set against a net spend of £208m over the previous four transfer windows. It may also be storing up trouble for the future.
Last week Paris Saint-Germain not only signed David Beckham, but also concluded a five year sponsorship deal with Emirates worth £108m. Given that their previous sponsorship deal was around £3.5m a season, it’s a big leap forward, although it has to be set against a net spend of £208m over the previous four transfer windows. It may also be storing up trouble for the future.
Manchester City and Paris St Germain have been warned by Uefa they will have to prove they are
not ‘cheating’ the new financial fair play system by having huge sponsorship deals with companies closely associated with their owners.
City have a £400million deal with Etihad airline, closely linked to its Abu Dhabi-based owner, while Qatar-owned PSG have recently announced a £125million-a-year deal with the Qatar Tourist Authority.
Uefa today published its annual benchmark report which warns two English clubs – understood to be Manchester City and Chelsea – are among 46 across 22 European countries who could fall foul of its financial rules based on 2009-2011 figures.
However, Chelsea made a profit last season and are confident they will comply when the system
comes into effect next year, while City believe they will also be able to comply when the rules come into force for the 2014/15 season.
One issue which remains for City and PSG however, is their big sponsorship deals, with Uefa saying they will check to ensure they have not simply been agreed at inflated values in order to allow the clubs to comply with financial fair play (FFP).
Uefa general secretary Gianni Infantino said: ‘Everyone, including PSG, know they have
to demonstrate [the deals] are without cheating and that will be submitted to panels. We have a regulation which speaks about fair value of deals and the fact that a related party cannot just inject money into a club directly or indirectly.’ However, Uefa had better be careful how it interprets that rule or it could face a challenge in court.
Clubs in European competition will be obliged to break even, within discretion of 5million euros
(£4.3m) over three years, though initially owners will be allowed to cover losses of up to 15million euros (£13million) a year. Uefa’s report says club losses have ballooned from 600million euros (£515million) in 2007 to a record 1.7billion euros (£1.45billion) in 2011, though revenues have seen an
increase.
PSG would appear to have the most to do to convince Uefa, but at least the estimated £3million
that David Beckham is due to receive for his five-month contract should be exempt from the FFP calculations because the French club is to pay that direct to charity.