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UEFA have just handed Liverpool and FSG a major challenge after Paris-Saint Germain decision



UEFA issued major challenge to Liverpool and FSG following Paris-Saint Germain decision

Some European clubs have been able to strike deals to get their houses in order before new rules are introducedand face another spending challenge for Liverpool

Despite having lost over €600m since 2019, Paris Saint-Germain are set to escape any serious sanction from European football’s governing body after this season.

PSG, owned by Qatar Sports Investments (QSI) and chaired by Nasser Al-Khelaifi, chairman of QSI, beIN Media Group and the European Club Association, has been spending heavily in the market in recent years.

The front three with Kylian Mbappe, Lionel Messi and Neymar Jr don’t come cheap as PSG have invested heavily in building their brand on and off the pitch and success outside their domestic league in terms of first ever eludes them, when it comes to the Champions League.

Last year, UEFA announced that new sustainability regulations would be introduced to replace the old Financial Fair Play (FFP) system. Known as the Football Winnings Rule, the new requirements came into effect on June 1, with the new rules providing for a doubling of acceptable losses from €30m to €60m over three years. But more severe action was also needed.

In August, UEFA announced that, following an investigation, prize money from European competitions totaling €26m would be withheld by the eight clubs sanctioned under FFP rules, with an additional €146m euros of fines imposed if the sanctioned clubs did not comply with the financial requirements. obligations. objectives for the next three years, which was agreed through settlement agreements with the companies in question.

PSG were among eight clubs to receive a financial fine, although the rather paltry sum of €10m shouldn’t have led to too many sleepless nights for club officials in the French capital.

Last week, French newspaper L’Equipe reported that no immediate sanctions would be imposed on PSG, and probably no sanctions before 2025/26, allowing overspending clubs to act together.

Earlier this month, in an exclusive interview with ECHO, Liverpool principal owner and head of Fenway Sports Group John W. Henry, spoke of the Reds’ desire to spend more.

Despite a record £594m turnover for the 2021/22 financial year, Liverpool have spent more than a decade trying to conduct their business in what they see as a sustainable way for the club to generate revenue. as well as profits from trading players, they underpinned success on and off the pitch.

However, with transfers and wage bills rising exponentially in the Premier League and across Europe, such an attitude towards football club management has created challenges when it comes to entering the transfer market, with club policies a a source of frustration for some Reds fans.

Henry told ECHO: “You are right that there are growing financial challenges in the Premier League.

“The league itself is hugely successful and is the biggest football league in the world, but we have thought for some time that there should be spending limits so that the league doesn’t go down the road of the European leagues where one or two clubs have little competition each year. “Enthusiasm depends on the competition and it is the most important part of the Premier League.

“We have seen many football clubs take unsustainable paths.”

PSG’s ability to continue with few penalties for significant losses in recent years underscores the point Henry made, with a clear lack of enforcement when it comes to spending rules and regulations.

On Monday, The Athletic said Jude Bellingham, a long-term Liverpool target and a player seen as someone who could help lead a new era at Anfield, was now “increasingly unlikely” to join the Reds from the German side this week. ‘summer. Borussia Dortmund.

The 19-year-old England international Bellingham is expected to leave the Bundesliga this summer and there will be no shortage of potential suitors. However, with a transfer fee expected to be in the region of £130m and substantial salaries to consider too, very few clubs could be caught in the race. With Liverpool now reportedly out of the lead in the chase, trailing Manchester City and Real Madrid in the race, losing to two big European rivals for fear of being drawn into a bidding war would potentially be a source of great frustration for both the club than for admirers.

It made little sense for Manchester City to stop spending next summer, despite the Premier League filing more than 100 charges over alleged breaches of Premier League winnings and sustainability rules over a nine-year period. City’s appeal was upheld by the Court of Arbitration for Sport in 2020 after they were initially hit with UEFA’s Champions League suspension over alleged FFP offences. They were still fined €10 million after their appeal.

Real Madrid made a profit of €13m for the 2021/22 financial year against a turnover of €721.5m (£631.4m). That’s around £35m more than Liverpool’s turnover for the same period. Real expect revenue of €769.6m in 2022/23, a figure which, while up on 2021/22, is still below pre-pandemic levels for the Spanish giants who sold in 2019/20 822 million euros (£719.5 million).

During the pandemic, Real cut wages and sought to recapitalize the company. They have taken a step to cut transfer costs, unlike rivals Barcelona who have tried otherwise to get back on track. Last year, Real signed an agreement with the US investment fund Sixth Street to support the redevelopment of the Santiago Bernabeu. The club has cash reserves of over £370m.

Real Madrid’s financial strength is likely to be shown this summer and it will make Liverpool’s plans to sign Bellingham that much more challenging.

But despite gains that have lifted them to third place in European football, Liverpool could be beaten in the race for Bellingham, despite flying well under the FFP radar.

PSG’s deal also sets something of a precedent for UEFA, with the possibility for clubs to seek a similar course of action.

The spending will continue, and at an incredible pace. For clubs that have found a way to worry less about potentially heavy losses by raising money elsewhere in the budget, that probably won’t be too hard a pill to swallow. For some clubs that rely in any way on institutional investment, the losses incurred could defer that particular sector, a lifeblood for some big clubs, into the future unless tougher spending penalties are introduced.

For FSG this summer they will need to find a way to navigate the financial landscape to rebuild, challenge and continue to grow on and off the pitch.

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