Penalty beef, £200m men and trends in football club ownership

Just two months ago PSG's financiers sanctioned the record £200m purchase of Brazil forward Neymar Jr, hoping it would "bring a very positive energy to this club". Last week, Neymar's teammate Cavani, the long-time designated penalty taker, was placing the ball on the spot when his path was suddenly blocked by Neymar. PSG then had to deny reports of an edict to Cavani; abandon penalties in exchange for €1m. The energy in Paris appears far from positive since Neymar's arrival.

Understanding how this 47-year-old Ligue 1 club broke the transfer record (by over £100m), and then its team harmony, in just a single season, requires an analysis of the underlying trends in the acquisition of clubs across Europe.

The bread and butter buyer of a football club was the local boy done good. A businessman from humble beginnings would use part of his wealth to buy his local club. Things could turn sour for the local owner shortly after – unable to juggle the demands of the football business and their main business as well as competing with the emerging inflows of foreign cash. A prime example is Crystal Palace, who between 1990 - 2000s were twice in administration under local lads Simon Jordan and Mark Goldberg.

The early 2000s saw a corporate grip on the Premier League. Ex-Barclay's head Bob Diamond proclaimed a 15 season sponsorship deal "[fitted the Banks] international presence and aspirations particularly in Asia and continental Europe". Sky TV also increased live broadcasts from 60 to 110+. In line with this increased global attention came a new wave of football club buyer. The foreign billionaire had Bob Diamond's "international presence", were well versed in cross-border deal making, meaning that owning a football club in England and dabbling in the transfer market would be a natural extension of one’s personal cult. Chasm-deep pockets proved no problem to the personal servicing of club debt; Roman Abramovich’s 2003 acquisition of Chelsea saw the club post record losses totalling £630 million until 2012 – whilst twice breaking the British transfer record.

Fast forward to the late 2000s and the injection of over $49.5m per deal into European football through shirt sponsorship by foreign states (UAE state-owned Emirates Airlines sponsors Real Madrid, Paris Saint-Germain, Arsenal, AC Milan and Benfica). These brands see sponsorship as a way of engaging a local youth population and (sometimes sceptical) foreigners. Sponsorship notably turned to ownership when Abu Dhabi Holdings and Qatar Sports Investments (effectively state sovereign wealth funds) purchased Man City and PSG in 2008 and 2011 respectively. With ownership brings the prestige of being associated with major global events such as the Champions League, generating local pride and unity. And with more wealth than even Roman Abramovich, these state-backed clubs are able to spend £200m on a single player, and shell out €1m should it lead to negative energy at the penalty spot.


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