PSG’s Transfer Window of Dreams: A Fabrication of Financial Fair Play?

Rafiel Rajinthrakumar | October 5th, 2021

Every summer, after the conclusion of leagues and tournaments across European football associations, the transfer window re-opens to allow players and managers to make decisions about their futures. These windows offer opportunities for young talents to join bigger teams in exchange for millions of dollars, but also offer more experienced players in the game to embark on a new adventure to end their star-studded careers. Over the past couple years, transfer windows have provided fans with tantalizing prospects of how their team will line-up for the upcoming season, fuelling pre-season bets and banter. Wealthy teams like Real Madrid and Chelsea are no strangers to exceptional transfer business, displayed in the summers of 2009 and 2004 respectively (1). However, a team in France by the name of Paris Saint-Germain (PSG) has been building their brand over the past couple of years and made a statement this summer by having one of the most spectacular transfer windows of all time. They managed to sign the likes of Lionel Messi and Sergio Ramos while keeping Neymar and Kylian Mbappe at the club. Such a phenomenal transfer window seems too good to be true, however, the extent to which it is legal is concerning. Has PSG severely breached the rules of Financial Fair Play (FFP) or have they mastered their way around it?

Before understanding how PSG were able to conduct such amazing transfer market business, it is important to understand what FFP is and how it affects a club’s ability to spend money. In simple terms, the current system of FFP analyzes “overall profit and loss over three seasons. If you exceeded the allowable losses, you could face a range of punishments from fines, limits on squad size and transfers, to, ultimately, a ban from European competition” (2). Essentially, this system is in place to prevent clubs from spending more money than they earned and ensuring that the money they spend is proportional to their losses. Rich clubs like PSG and Real Madrid could easily pay off a fine, but a potential ban from the UEFA (Union of European Football Associations) Champions League has kept them cautious. Ambiguity of the punishment that might come due to their potential indiscretions has kept clubs from wanting to violate the regulations in place, lest they be banned from European Competitions. Manchester City, one of the most famous clubs in England, had first hand experience dealing with a ban from UEFA competitions, but they were lucky enough to escape (3). Luckily, clubs will not have to worry about bans as FFP has been suspended due to the COVID-19 pandemic (4). It will be back soon, but in a revised format that none other than PSG’s chairman Nasser Al-Khelaifi will have a say in creating.

With the FFP rules being on hold until further notice, it now makes sense why Al-Khelaifi kept reminding the media that he is well aware of his club’s financial capacity to sign players of such a high calibre (5). There is also speculation going around in Europe that the new FFP system will encompass a sort of “luxury tax structure” that prioritizes the long term stability of a club over competitiveness in European competitions. From a legal standpoint, this luxury tax structure would work perfectly in PSG’s favour. No matter how expensive it is for them to sign players, they will easily be able to pay off the fines associated with their excessive spending without worrying about bans from competitions and limits on squad sizes. Money has never been a huge problem for PSG anyways, since they could always rely on the Qatar Sports Investments (QSI) to be their investors, so the new alleged form of FFP is most definitely in favour of the Parisian giants. On the other hand, the new FFP structure could have some stark consequences on the state of football across Europe.

A luxury tax would not only favour teams with money, but it would also severely harm the development of smaller teams across the football league system. The spending cap for many clubs will be based on revenue, which is a figure that not all clubs can easily increase. Bigger teams with more popularity are likely to generate more revenue and signing world-class players with their increased salary caps will only keep making them stronger. On the other hand, smaller teams in European football will find it difficult to increase revenue and will struggle to keep up with the teams ahead of them. The disparity in the competition will be evident when taking a look at each club’s bank account, but the beauty of sports means that the underdog always has a chance, especially considering PSG’s most recent result (6).

Now, apart from PSG failing to beat a mediocre team in their league, did they adhere to FFP during the summer transfer window? Technically, the answer is unknown. FFP is still suspended and apart from allegations on how it may resume, no one is sure of how UEFA plans to deal with clubs who have no regard for their spending limit. In the meantime, PSG will be sure to remember this summer as one of the most successful transfer windows in their history. A squad with the likes of Sergio Ramos and Lionel Messi will turn heads everywhere and allow PSG to increase their revenue even more, just in time for next summer’s transfer window. With QSI on hand to cover any losses or fines PSG may face, they sure have been smart about their business this summer and created an almighty squad to contest for Europe’s biggest prizes this season (7).