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World PSG, Man City set to benefit from expected end to financial fair play restrictions

06:40  26 september  2021
06:40  26 september  2021 Source:   afp.com

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Manchester City and PSG have regularly been accused of not respecting UEFA's financial fair play rules, but these rules are set to change Paul ELLIS AFP/File. 3 min. The story of PSG , City and Financial Fair Play (FFP) is essentially the story of the last decade in European football. Abu Dhabi's Sheikh Mansour bought City in 2008, while in 2010 Qatar Sports Investments purchased PSG . Also in 2010, UEFA introduced FFP in response to a debt crisis that was submerging clubs across the continent.

If PSG comply with the break-even targets set by the body, they will "gradually be released from the restriction as regards the registration of players in UEFA club competitions," European football's governing body added. "In this connection, PSG also undertakes to provide the CFCB with a progress report evidencing its compliance with all relevant conditions agreed on a six monthly basis." Manchester City were the other highest-profile club to be penalised by UEFA, while seven other clubs were also punished.

Paris Saint-Germain and Manchester City go head to head in the Champions League on Tuesday after a summer which underlined their status as the new superpowers of European football, and any possible restraints on their enormous spending could soon disappear along with UEFA's Financial Fair Play rules.

Manchester City and PSG have regularly been accused of not respecting UEFA's financial fair play rules, but these rules are set to change © Paul ELLIS Manchester City and PSG have regularly been accused of not respecting UEFA's financial fair play rules, but these rules are set to change UEFA President Aleksander Ceferin at the Champions League draw in Istanbul in August © OZAN KOSE UEFA President Aleksander Ceferin at the Champions League draw in Istanbul in August

The story of PSG, City and Financial Fair Play (FFP) is essentially the story of the last decade in European football.

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Manchester City are been probed amid possible breach of Financial Fair Play . Premier League are also looking into recruitment of Academy players . City deny all allegations levelled against them and said in a statement: ' Manchester City welcomes the opening of a formal UEFA investigation as an opportunity to bring to an end the speculation resulting from the illegal hacking and out of context publication of City emails.

Manchester City are facing UEFA sanctions for breaching financial fair play rules which would see the club limited to a 21- man Champions League squad instead of the usual 25 players next season, the Press Association reports. No club is expected to be excluded from the Champions League for breaching the spending limits, the maximum possible sanction -- although UEFA president Michel Platini said last month he does not envisage that to happen . Both Manchester City and Paris Saint-Germain are believed to have fallen foul of the FFP rules with sponsorship deals related to each clubs' owners.

Abu Dhabi's Sheikh Mansour bought City in 2008, while in 2010 Qatar Sports Investments purchased PSG.

Also in 2010, UEFA introduced FFP in response to a debt crisis that was submerging clubs across the continent.

FFP meant clubs could not lose more than 30 million euros ($35.2m) over a three-year period if they wanted to play in European competition.

Rivals of PSG and City have consistently asked how the duo can be respecting the rules when they spend as much as they do, most notably when the French side splurged the two biggest transfer fees in history to sign Neymar and Kylian Mbappe in 2017.

PSG were not punished then, while City were handed a two-year Champions League ban by UEFA in February 2020 for FFP breaches when they were found to have overstated revenue from sponsorship between 2012 and 2016.

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Financial Fair Play (FFP) is suspended, essentially, due to the after-effects of the coronavirus pandemic. But it will be back in a revised format and to be fair to Al-Khelaifi, he probably has a better sense than most of what it will look like when he returns owing to the fact that he's not just the PSG Clubs like Manchester City and PSG felt UEFA and other big clubs were biased against them. Other big clubs felt they were, well, cheating, while fans were left confused as to what to think. And because there was little transparency, both in club accounts and in legal proceedings, we still don't know for sure.

PSG and City were each fined €60 million by UEFA in May 2014, but both were told they would get €40 million back if they stuck to the terms of their settlement. French investigative website Mediapart claims Infantino – the current FIFA president who was then UEFA's general secretary – "directly negotiated Reputedly included in copy in emails sent by Infantino to City 's chairman Khaldoon Al Mubarak was former French president and PSG fan Nicolas Sarkozy, who also reputedly helped City 's Abu Dhabi owners in their attempts to get around FFP rules. Sarkozy's press officer responded to Mediapart by

Yet the Court of Arbitration for Sport overturned that ban. Most alleged breaches, the court said, "were either not established or time-barred".

That ruling showed the limits of FFP, and in any case UEFA responded to the economic crisis caused by the coronavirus pandemic --  with total projected losses of over eight billion euros -- by relaxing the rules.

Assessments of the 2020 and 2021 financial years would be done together rather than separately. Clubs are also expected to be able to register losses over the 30 million-euro limit.

Essentially, with cash-strapped clubs desperate, UEFA realised it no longer made sense to prevent investment.

"What they're saying is, put in all the money you want," says Raffaele Poli from the Football Observatory at the International Centre for Sports Studies in Neuchatel, Switzerland.

- Salary cap -

And it now seems clear this relaxation will not be temporary. UEFA is working on a complete overhaul of its budgetary rules.

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I think PSG respect the loopholes in financial fair play contract. Following the insane money they spent in bringing Neymar Junior to Paris, French giant, Paris Saint-Germain is set to be investigated by UEFA for a suspected breach of Financial Fair Play (FFP) Manchester City owner, Sheikh Mansour It's the end of an era for all the best players ending up at either Barcelona or Real Madrid.

It is believed that PSG and Manchester City are among the clubs judged to have failed the break-even test and that both are likely to face a combination of financial and sporting sanctions. Such a ruling would force those clubs in breach of the rules to potentially omit some of their more expensive players in favour of homegrown talent. A key factor in Qatar-owned PSG failing the test is believed to have been their controversial backdated €200m per season sponsorship deal with the Qatar Tourism Authority was ruled to have been only worth half that under Uefa's rules on related party transactions.

Details are still being negotiated but it now seems clear the strict limits applied under FFP will be replaced by a salary cap expected to be around 70 percent of a club's revenue.

There will be a transition period in which the limit will gradually drop, for example the cap might start at 80 percent of revenue, then drop to 75 percent.

It is a similar system to those used in American sports but the introduction of a Europe-wide salary cap is a delicate issue, given the continent's 55 national federations all follow different accounting and tax rules within their own countries.

In practice, such a cap would do little to restrain wage inflation. In May, UEFA claimed spending on salaries in 2019 represented 64 percent of total revenue for all clubs, "more than in any other industry".

However, the major change in store for the nouveaux riches of the European game is not a cap on wage spending, but instead the likely lifting of any sporting punishment –- bans from the Champions League or from signing players -- for going over the limit.

- Luxury tax -

Instead UEFA is set to introduce a "luxury tax", as has been mentioned several times in the past by president Aleksander Ceferin.

For every euro a club goes over the limit, it will have to pay into a pot and that money will be redistributed to other clubs.

Ceferin has warned that the envisaged new rules are not likely to improve "competitive balance", an issue close to the Slovenian's heart. It will not stop the biggest trophies being shared only among a very select few elite clubs.

According to Poli, limiting wage spending to a percentage of revenues will simply "entrench the existing hierarchy" as it will still only be the very richest teams who can attract the best players.

Indeed, the luxury tax is likely to tip the balance even more in favour of those backed by oil or gas-rich states, or oligarchs, for whom there will no longer be any questions about possible breaches of FFP rules.

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