The league has filed a complaint against PSG before the European Commission considering that the grants received from Qatar They do not conform to the Regulation of Foreign Subsidies of the European Union. The Spanish football association believes that these subsidies received by the French club “have allowed it to improve its competitive position and generate significant distortions in several national and EU markets.”
LaLiga statement on the complaint to PSG
LALIGA, in response to the new course of action that represents the beginning of the application of the European Regulation on foreign subsidies that distort the internal market (the “Foreign Subsidies Regulation”), has submitted a document to the European Commission to denounce that the PSG financing mechanisms generate a serious distortion in the internal market of the European Union (EU).
Said rule, which is applicable from July 12, 2023, affects foreign subsidies, granted by States outside the EU to companies that carry out an economic activity in the internal market, including those that come from public companies controlled directly or indirectly by a State, including even those granted in the five-year period prior to the application of the aforementioned Regulation.
For this reason, LALIGA has filed a complaint considering that PSG has received foreign subsidies from the State of Qatar, which has allowed it to improve its competitive position and generate significant distortions in several national and EU markets.
Specifically, as analyzed in the aforementioned complaint, said entity obtains resources under non-market conditions that distort different closely related markets, allowing PSG to hire the best footballers and coaches with said foreign subsidies well above their possibilities in a normal market scenario and obtain income from sports sponsorships for figures that do not correspond to values at market prices. Circumstance that allows him to improve, on the other hand, his sports performance, apart from affecting the contracting capacity of rival clubs.
On the other hand, this better sports positioning would also allow PSG to improve its competitive position in the markets adjacent to the sports competition (for example, the audiovisual marketing markets of the competitions or the sponsorship market), thereby determining an increase artificial value of the club in the market.
That is why LALIGA is confident that the European Commission, thanks to this new regulatory tool, will take the necessary measures to eliminate market distortions such as those described, which seriously harm the sports ecosystem.
What is PSG exposed to with this complaint?
The steps that the complaint can now follow will be the following. The first thing that the European Commission must assess is the initiation of the investigation, if it considers that there are indications of a breach of said Regulation. If the investigation culminated in a negative decision for PSG, the Parisian club would be forced to adopt measures to solve the distortion created by said subsidies.
If these commitments are not fulfilled, there will be a fine for the club, of how high. 10% of the company’s turnover, which is considerable. In addition, a negative decision for PSG could ‘encourage’ sports organizations to sanction the club through sports.
