Paris Saint-Germain and FFP: How PSG can afford Messi, Neymar and more

PSG have had a complicated history with FFP. Now, having added Messi to their payroll, more questions are being asked of the Qatar-owned club

As Lionel Messi bid a tearful farewell to Barcelona, a desperate final attempt to sabotage his imminent arrival at Paris Saint-Germain was underway. Barca's shambolic financial mismanagement had led to this juncture, but the fact Qatari-owned PSG - four years on from prising Neymar from the Camp Nou - were able to swoop in and take full advantage of the situation had irked many in Catalunya. Amongst them was lawyer, Dr Juan Branco. On behalf of Barcelona's members, he had filed a complaint to the European Court of Appeals. Citing UEFA's Financial Fair Play (FFP) regulations, Branco claimed PSG's record had been just as bad - if not worse - than Barca's, and demanded the transfer be blocked as a result. Branco's appeal was, of course, unsuccessful, but the talk about PSG and FFP had been reignited. And not just in Barcelona. On the day the transfer was finalised, Jose Fonte of reigning Ligue 1 champions Lille expressed his concerns in an interview given to talkSPORT: "Every single club is restricting their spending," he said. "They can’t buy a lot, they can’t get players on big wages but then PSG comes and it looks like there’s no law." Herbert Hainer, president of Bayern Munich, appeared equally perplexed when speaking on SportBild's Bayern Insider podcast earlier this week: "I'm still trying to understand how that goes along with Financial Fair Play," he said. "As PSG is currently upgrading, we will take a very close look at how that can be reconciled with UEFA rules. We stick to it, then we expect other clubs to do the same." Messi is reportedly on a wage of £500,000-a-week in Paris. He is not the only summer arrival. Achraf Hakimi, Danilo Pereira, Georginio Wijnaldum, Sergio Ramos and Gianluigi Donnarumma have also been added to the ranks. As with Messi, the majority of those new additions have been brought in without PSG paying a fee, but the impact on a payroll which already included Neymar and Kylian Mbappe has raised the obvious question: how, at a time when the rest of the football world continues to grapple with the financial impacts of the pandemic, are PSG able to do this and comply with FFP? PSG's chairman Nasser Al-Khelaifi appeared unflustered by such questions at Messi's grand unveiling. FFP is, after all, a topic he has regularly been asked about throughout his tenure in France. "I hope Leo won’t ask for more salary,” he told reporters. “We talk to financial and legal people, you see we sign Lionel Messi - that means we can sign him. "What you as a media need to focus is not only the negative side but the positive side he will bring to the club. Through it all we look at Financial Fair Play and always we will fulfil Financial Fair Play regulations." FFP was introduced by UEFA a decade ago, designed to prevent clubs from spending more money than they earned in the pursuit of on-field success. This, it was hoped, would insulate clubs from the threat of long-term financial trouble. A byproduct of the regulations was that they prevented some clubs from benefiting from huge injections of funds from external sources. For PSG, recently flush with Qatari riches, FFP posed an instant problem. Having ended the 2010/11 season fourth in Ligue 1 - their highest finish in seven years - PSG were taken over by Qatar Sports Investment, a subsidiary of the country's sovereign-wealth fund, the Qatar Investment Authority. Qatar had secured the hosting rights to the 2022 World Cup by this point, and now had aspirations of building its very own super club. Little time was wasted, with the club immediately beginning to invest significantly in PSG's squad. They finished second in their first season under QSI, winning Ligue 1 the next having added the likes of Zlatan Ibrahimovic and Thiago Silva. After that first Qatari-era title win, PSG encountered their first FFP run-in with UEFA, relating to a lucrative sponsorship deal they had struck with the Qatar Tourism Authority (QTA). Officially announced in 2013 but backdated to 2012, it was worth a reported €200m. Following claims the value of the sponsorship had been artificially inflated to allow PSG to meet FFP requirements, UEFA's Club Financial Control Body (CFCB) investigated and later determined the deal's actual value had been “significantly below that submitted by the club”. The revised sponsorship value meant that PSG had breached FFP regulations. A fine was issued, with the club agreeing to a settlement with UEFA in May 2014. A statement explained the terms of the settlement, with the club placed under restrictions until the end of the 2016/17 season. These restrictions were, however, lifted a year later, and PSG inked a new deal with the QTA in 2016. In 2017, PSG were the subject of fresh FFP scrutiny. UEFA confirmed the launch of a new investigation into the club the day after they completed the signing of Kylian Mbappe from AS Monaco - mere weeks after the world-record arrival of Neymar. The following summer, with the eyes of the football world fixed on the 2018 World Cup in Russia, PSG were cleared of breaching FFP regulations between 2015 and 2017, but instructed by UEFA to raise additional funds to avoid future punishment. L'Equipe reported the devaluing of several of the club's Qatar-based sponsorship deals - from the likes of QTA, Qatar National Bank (QNB), Ooredoo, beIN Sports and Aspetar - meant that the club would fall short in FFP if the money was not raised by the end of the transfer window. Though PSG successfully raised the money through player sales, UEFA announced soon after that they would review the 2015-2017 case, despite initially clearing them of any wrongdoing. Internally, the decision to clear them had been disputed at UEFA: Jose Narciso da Cunha Rodrigues, a former judge and chairman of the governing body panel that penalised teams that breach financial rules, questioned the conclusions drawn from the investigation and demanded the case be reassessed. PSG responded by taking the case to the Court of Arbitration for Sport (CAS) in November 2018. The following March, UEFA's original verdict was upheld by CAS. Again, PSG would be required to raise money through player sales, which they did successfully, but the club would not be hit with sanctions. While the club is still heavily dependent on the backing of their owners, they have diversified their sponsorship deals since the early years under QSI. While there's still a raft of commercial partners from Qatar, they now boast lucrative deals not linked to the state which owns them. Deals with Nike, Air Jordan and shirt sponsor Accor, for example, generate an estimated total of over €200m-a-year combined. Prior to Covid, they had posted profits in 2017-18 and 2018-19. Knowing all this might partly explain why PSG appear undaunted by any scrutiny Messi's signing will attract. They have been investigated for FFP breaches before but avoided significant punishment. They will no doubt be emboldened by the successful appeal they lodged with CAS. Crucially, too, the fact that FFP regulations have been relaxed in response to the pandemic has also played into their hands. The decision to ease the restriction was taken when it emerged many clubs would see revenue streams dry up, particularly as a result of playing behind closed doors. Instead of analysing the financial years of 2020 and 2021 individually, FFP will assess the two years as a single window. On top of this, clubs will not be punished for exceeding FFP's €30m deficit threshold so long as they can evidence that any such losses came as a result of Covid's impact. This, in theory, could explain why PSG have added Messi to their books, much in the same way Manchester City - with mega-wealthy benefactors of their own - have been intent on splurging in excess of £200m on two players this summer. Pandemics don't hit quite as hard when your owners are multi-billionaires and the circumstances have offered an opportunity such clubs can use to their advantage. For all the high-profile arrivals this summer, PSG have recouped around £10m from the sales of Mitchel Bakker and Alphonse Areola. Any talk of potential FFP breaches will soon die down should Real Madrid have a bid accepted for Mbappe in the days to come, but should he stay put, history shows that even with the gargantuan hike in wage bill, PSG are unlikely to be on the receiving end of any strong punishment in the unlikely event they are found to have violated any of UEFA's financial rules. This will inevitably lead to further questions about FFP and its suitability in the modern game. Changes to the framework have already been mooted, but, importantly, any discussions that take place are likely to be shaped in some way by PSG's own president, whose position in European football has never been as strong. As well as his role at PSG and QSI, Al-Khelaifi is a member of UEFA’s board. In April, following the resignation of Juventus chief Andrea Agnelli amidst the fallout of the doomed European Super League, he was appointed president of the European Club Association, a body which represents more than 200 of the continent's top-division clubs. He also remains the most senior figure with Qatari sports broadcaster beIN Sport, who recently announced a lucrative rights deal for UEFA competitions. Though he might not be the man to publish the amended FFP guidelines, it is difficult to envisage a situation where he is not an influential voice. Perhaps FFP has slowed PSG's ascent to the top of the European game over the last ten years. Ultimately, though, it has done little to stop them. Now, as Lionel Messi's Parisian adventure begins, it seems unlikely to thwart whatever comes next.