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Mbappe Contract Renewal – A Breach In Financial Fair Play Rules Or Not

On 21st May 2022, Kylian Mbappe, the 23-year-old French forward confirmed that he will continue to play for Paris Saint-German for 3 more years until 2025. The club has agreed to negotiate a new contract for a lucrative 3-year deal. Prior to this, Mbappe was set to leave on a free transfer as his contract was expiring at the end of the season. The player had been widely tipped to join Real Madrid and the fans have been furious over his decision to stay.

In the year 2017, PSG signed the young player from AS Monaco for 180 million euros, this made him the second-most expensive signing after Neymar who was signed for 222 million euros from Barcelona. Real Madrid has been after Mbappe since the year 2021 and they had offered to sign the player too, however, PSG rejected this deal as they had no intentions to sell the young talent due to their quest for the UEFA Champions League trophy, nevertheless the Parisian club faced a mind-blowing comeback when Real Madrid knocked them out of the competition during the RO16.

The most astonishing part of the deal is not just the fact that Mbappe snubbed off Real Madrid after having a potential verbal agreement made and being just one step away from moving to Real but also the signing bonus as well as yearly wages offered to Mbappe as part of the contract. The Frenchman is rumoured to receive a weekly salary of 1 million euros, including a signing on fee of over 100 million euros. The club president Nasser Al-Khelaifi has also agreed that Mbappe would have a say in boardroom decisions and the player has also been guaranteed that the sporting project would improve. The 23-year-old was thus tempted to stay at PSG due to these improved contract terms which made him reject the Real Madrid deal. According to some sources, the President of the country also influenced him to take this decision by constantly keeping in touch with the player. This contract has not only left the people shocked but also his fellow PSG teammates, according to Ander Herrera, a midfielder playing for PSG.

This deal made the fans not just shocked but also furious and angry. The fans claim that Mbappe made this decision solely based on the benefits offered by the contract thus calling him “money-minded”. Furthermore, the Spanish league, La Liga has also released a furious statement over Mbappe’s decision to continue at PSG. In the statement La Liga has said that this new contract is “attacking the economic stability of European football”. They also claim that this contract would put hundreds and thousands of jobs at risk. The main issue stated is that PSG’s new contract is against the Financial Fair Play rules and that these kinds of contracts could massively affect the economically vulnerable clubs. This is a huge threat because if these kinds of signings continue then the sport would be played only by the clubs possessing enough money and financial success. Like the famous saying, ‘Football has been reduced from a game played by 22 people on a pitch to a set of undisguised trade deals, which can control sporting fortune’, Mbappe’s contract is just another example of this. Financial power is being misused by clubs and their owners to control the sport, this behaviour has drastically increased in the past few years.

The Financial Fair Play is a project brought in by UEFA in the year 2009 in order to improve the economic and financial stability of clubs with increased transparency and credibility. These rules are regularly updated. According to this, the main requirement is that all the European football clubs must break-even, which means that they should not spend more than the income that they generate. The income includes the money earned through prizes and titles, transfers and player sales, advertising, finance etc. UEFA also states that if the club owner supplies money from their own pocket for the club’s expenses and spending then UEFA will investigate the situation, do the necessary calculations for the break-even result keeping in mind the market prices.

UEFA states that, “Under the updated regulations, any entity that, alone or in aggregate together with other entities which are linked to the same owner or government, represent more than 30% of the club’s total revenues is automatically considered a related party.” Some punishments for breaking the FFP rules are warnings, fines, points deduction, restrictions, prohibition to welcome new players, etc. PSG have already been handed with a 60 million euros fine a few years back and also had their EUFA players reduced to 21 players as well as extensive transfer spending restrictions. This fine was partially lifted due to their improved financial conditions and stability. PSG also had other multiple UEFA investigations due to their expensive signings. The club registered losses upto 124 million euros in the year 2020 and 224 million euros in the year 2021. This is not it; they also have losses accumulating to a total of 700 million euros in the previous seasons. But they are also currently claimed to have the sixth-highest revenue in football. Their average revenue mounts up to 556 million euros in the year 2021. In La Liga’s statement against PSG, they state that this investment is impossible taking into consideration the club’s losses thus PSG will not be able to accommodate Mbappe’s new wage bill and won’t be able to break-even.

La Liga’s allegation is ironic and hypocritical to some extent considering the fact that Real Madrid, a team in the Spanish league was willing to offer 230 million euros to sign the French forward with a signing bonus of 110 million euros when they are in a debt of over 770 million euros. However, looking beyond this mere hypocrisy, this allegation could be beneficial for the sport and could also protect the game from being abused due to economic and financial power. Due to state owned clubs like Paris Saint German, football is turning into a monopoly where the big fish eats the little ones. It is now UEFA’s place to decide if PSG has breached the FPP rules and regulations and if they would be punished for the same after close investigations.

The terms pertaining to Mbappe’s new deal and Real Madrid’s snubbed offer show that football is no more just a game of passion but the element of greed, business, trade deals, financial power etc., has been induced in the sport. This deal also shows that the owners and management of top clubs do not show any concern and are rather careless when it comes to monopolising the soul and spirit of football.

This article has been witten by Sana Myiesha Riyas, student at IFIM Law School, Bengaluru.

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