The rules were introduced in 2009 to prevent clubs spending
beyond their means and distorting the market, requiring teams to
break even and keep wages and transfer fees in line with income.
PSG and Manchester City were among clubs to fall foul of the
rules, although both teams avoided excessive punishment after
winning appeals through the Court of Arbitration for Sport.
https://www.reuters.com/article/uk-soccer-england-mci-cas-idUKKCN24E0U3
A softening of rules to help clubs cope with the financial shock
of the pandemic, however, means neither PSG nor City - who last
week broke the Premier League transfer record to buy Jack
Grealish for 100 million pounds ($138 million) - have had to
worry about new investigations into their spending.
"We know the rules of Financial Fair Play and we will always
follow the regulations," said PSG chairman Nasser Al-Khelaifi at
Messi's presentation on Wednesday.
"Before we do anything, we check with our commercial, financial
and legal people. We have the capacity to sign him. If we sign
Leo, it's because we can, otherwise we would not have done it."
PSG's revenue for 2019-20 was 541 million euros, according to a
report from KPMG, while their wage bill stood at 405 million
euros.
BUMPER WAGES
Their spending on salaries has soared in the last year, however,
since signing Georginio Wijnaldum, Sergio Ramos and Gianluigi
Donnarumma on free transfers, allowing them to offer bumper
wages in lieu of transfer fees.
PSG have also splashed out 60 million euros on fullback Achraf
Hakimi from Inter Milan while the signing of Messi -- who will
pocket a reported 25 million-euro signing-on fee and annual
salary of 63 million -- has inflated their wage bill even
further.
The club's revenue, meanwhile, has fallen due to the pandemic
and the French league's television rights deal collapsing, but
for now they have no obligation to break even.
The break-even rule could be removed altogether, according to
Andrea Traverso, UEFA's director of financial stability and
research, who in April described it as "purposeless" in the
post-pandemic era.
Traverso suggested new rules should focus on the present and
future rather than punishing clubs for past excesses.
UEFA declined to comment on what the future of financial fair
play would look like or on whether the relaxing of the
break-even rule cleared the way for PSG to sign Messi.
Another key rule change from UEFA was allowing owners to spend
their own money to alleviate losses, which played into the hands
of Qatari-backed PSG and Abu Dhabi-funded City but provided
little relief to fan-owned Barca.
The Catalans were also at the mercy of LaLiga's financial fair
play rules, which sets each club a maximum budget each season
according to their expected income.
Barca's budget for the 2019-20 campaign was 671 million euros,
dropping to 347 million last season due to the pandemic.
It is reported to fall to between 160 million and 200 million
for the next campaign, making it impossible for them to give
Messi a new deal.
PSG, by contrast, benefited from the French soccer federation
postponing requirements for its clubs to only spend 70% of
revenue on wages.
($1 = 0.7244 pounds)
(Reporting by Richard Martin, editing by Ed Osmond)
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