LaLiga files complaint to European Commission over PSG’s Qatar subsidies
LaLiga has lodged a formal complaint with the European Commission against Paris Saint-Germain (PSG), the reigning champions of France’s Ligue 1. The Spanish league accuses PSG of distorting the market through their “spending commissions”, which they claim are backed by subsidies from the Gulf state of Qatar.
PSG, under the ownership of Qatar Sports Investments since 2011, has been able to recruit high-profile players and coaches, surpassing what would be feasible under normal market conditions, according to LaLiga.
The Spanish league asserts that PSG’s receipt of foreign subsidies from Qatar has enhanced its competitive edge, leading to significant distortions in various national and EU markets. The European Commission recently implemented a regulation on foreign subsidies, empowering it to scrutinize financial contributions made by non-EU countries to companies operating within the EU. This regulation aims to rectify any distortive effects these contributions may have on the market.
LaLiga contends that PSG acquires resources on terms that are not reflective of the market, causing distortions in several related markets. They also argue that PSG secures sponsorship income that is disproportionate to market values, enabling them to enhance their sporting performance and impact the recruitment capabilities of rival clubs. In light of this new regulatory tool, LaLiga is hopeful that the European Commission will take necessary action to eliminate such market distortions, which they believe are severely damaging the sporting ecosystem.
“In response to the new policy direction arising from the implementation of the European Regulation on Foreign Subsidies Distorting the Internal Market (the “Foreign Subsidies Regulation”), LALIGA has lodged a complaint with the European Commission regarding the PSG’s funding mechanisms, which seriously distort the European Union’s (EU) internal market.”
“This regulation, which is applicable from 12th July 2023, concerns foreign subsidies granted by non-EU states to companies carrying out economic activity within the internal market, taking into account those given by public companies that are, directly or indirectly, controlled by a state, including subsidies granted within a period of five years prior to the implementation of the regulation.”
“As a result, LALIGA has filed a complaint alleging that PSG has received foreign subsidies from the State of Qatar, which has allowed it to improve its competitive position, thus generating significant distortions in several national and EU markets.”
“Specifically, as outlined in the complaint, PSG obtains resources on non-market terms which distort several closely related markets, allowing PSG to use those foreign subsidies to sign top players and coaches well above its potential in a normal market situation. It is also able to secure sponsorship income which does not correspond to market values. This enables them to boost their sporting performance, as well as affecting the ability of rival clubs to recruit.”
“This improved sporting position then enables PSG to increase its competitive position in markets related to sporting competitions (e.g. those for the audiovisual marketing of competitions or the sponsorship market), thereby artificially increasing the club’s value within said markets.”
“Therefore, LALIGA trusts that the European Commission, thanks to this new regulatory tool, will take the necessary measures to eliminate market distortions such as those described above, which seriously damage the sporting ecosystem,” read the statement on La Liga’s website.
This is not the first time LaLiga has taken issue with PSG’s financial practices. Last year, they filed a complaint with UEFA, the governing body for European football, against both PSG and Manchester City, accusing them of breaching financial fair-play regulations. PSG has made several costly signings in recent years, including a record-breaking â¬222 million ($243 million) acquisition of Brazilian forward Neymar in 2017 and a â¬180 million deal for striker Kylian Mbappe in 2018. Despite rumors of a potential move to Real Madrid, Mbappe renewed his contract with PSG last year. However, tensions have risen between the player and the club as Mbappe announced in June that he would not renew his contract, which is set to expire at the end of the 2023-24 season.
