How have PSG financed the Neymar deal?

So after the news over Neymar’s impending move to PSG, there are some more thoughts floating around.

The financial situation – The way release clauses in Spain work is that it is the individual player who has to pay the money. They have to go to a Spanish court house and buy themselves out of their contract. For all intents and purposes, they then become a free transfer and able to join whoever they wish.

Under normal circumstances, the club buying the players will usually transfer the money over to the player, therefore giving them the cash to buy themselves out of the contract.

Manchester United famously messed up the signing of Ander Herrera by not giving him the tax on top of the transfer fee.

Rumours in Spain are that Qatar Sports Investments (QSI), the owners of PSG, are going to be paying Neymar up to £500m (the figure varies from £300-£500m). A tax-free contract was allegedly signed in Doha for Neymar to be an ambassador to Qatar for the 2022 FIFA World Cup.

A portion of this lump sum payment will then be used by Neymar to release him from his contract with Barcelona.

The key is that within Spanish law, the money to release the player does not require to have to come to the club who is interested in buying him, it merely has to come from the player. There seem to be no restrictions on who provides this cash.

Therefore, QSI are providing the cash to release Neymar, which in turn lifts any financial burden PSG have in the transfer, as under law, Neymar will be a free agent, and they will be purchasing him on a free.

Now UEFA (or FIFA) might investigate the deal, but it is seemingly legal under Spanish law, therefore they might not be able to do much. The rule is a player needs to buy himself out of his own contract. There are no rulings on where this money must come from.

It could create a new bosman ruling, where players in Spain are at risk of having big companies buying them out of their contracts on behalf of a club, meaning that under FFP, the club do not have to declare a transfer fee.

The rest of the money from QSI to Neymar is reportedly to be used to pay off the agents, fathers, and others who have a financial interest in the deal, as well as some money for Neymar’s own pocket, to supplement any basic wage paid from PSG.

Spain is up in arms over the deal, but should they be?

Barcelona / Real Madrid and their relationship with “sponsors” – Some see this deal as Karma. That Barcelona’s chickens are coming home to roost over the way they have financed transfer deals in the past.

For years, both Barcelona and Real Madrid have been running up massive losses, with those losses being guaranteed by reports of state funding.

When Real Madrid signed Zinedine Zidane, Real Madrid sold their training ground back to the local authority it sat in for a vastly increased price. Real Madrid were actually found guilty by the European Commission, who declared that Spain had provided the club with illegal state funding over the deal. Barcelona have also been found guilty of similar.

Also in the past, there have been major rumours of Nike, Adidas, and other headline sponsors of Barcelona and Real Madrid pay extra in sponsorship to cover transfers of big players. Also reports that the major companies offer player lucrative sponsorship deals to top up their wages.

So are PSG doing any different to what Barcelona and Real Madrid have done for years? Possibly not.

The waters are muddied further by reports that the move of Neymar from Santos to Barcelona was part funded by a sponsorship deal with the Qatar Foundation. Quite ironic that money from the same country to buy bring Neymar to Barcelona was also used to take him away from Barcelona.


This is a transfer which could end up being challenged in the courts for years to come. It will be interesting to watch.

Keenos

Note: We know this is an Arsenal blog, and tomorrow we will return to talking about Arsenal and the Community Shield. But for for today, like all football fans, Neymar is a deal of interest.

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