The glitz and glamour of the Monaco Grand Prix might be taking place tomorrow, but in another part of the tiny Mediterranean principality there is plenty of intrigue.
It has been well-publicized that AS Monaco, who will return to the French top flight this season, are currently fighting to keep their tax privileges against intense opposition from other Ligue 1 clubs and the French Football Federation (FFF).
The fact that Monaco is a tax haven has meant that, traditionally, the club’s players have not had to pay tax on their earnings.
According to the FFF in 2003/04 when Monaco reached the Champions League final, they saved €8 million due to the fact that they were exempt from taxes.
Other clubs in France have always looked on enviously at the situation but it has become a pressing concern for a number of reasons.
Firstly, many clubs in France are negotiating a financial tightrope.
Secondly, Monaco now have even greater purchasing power because like new champions PSG, they are owned by a billionaire.
Russian Dmitry Rybolovlev, the world’s 119th richest man in 2012 according to Forbes, has been bankrolling the club since he acquired a 66 per cent stake in the club back in December 2011.
Furious
Already there is talk that a deal is in place to bring Atletico Madrid striker Radamel Falcao to the principality, while other big name targets are rumoured to be joining.
It is easy to understand why clubs like Marseille and Lyon are furious with the situation.
Even if a compromise is reached and they are forced to contribute some level of tax, Monaco are still primed to follow PSG’s path, which means that they are likely to become a fixture in the Champions League places, pushing their rivals out of the reckoning.
Ligue 1 is ranked as the sixth best league in Europe by UEFA which means only two of its teams qualify for the Champions League automatically, while one more reaches the qualifiers.
If all goes to plan at Monaco, they and PSG will lock-out the top two places, leaving the rest of the league scrapping for a third place. In the short-term that cannot be healthy for a league where the likes of Marseille and Lyon have sizeable debts.
Will Falcao slide all the way to a tax haven?
In the long-term however, could two super rich clubs help Ligue 1?
Gallic teams have tended to be quite weak in Europe. In the Champions League era French clubs have rarely made an impact, with Monaco the only side to reach the final in the past decade, while Lyon reached the semis in 2010. And only one French club has ever won the European Cup/Champions League, with Marseille’s 1993 triumph tainted by a domestic match-fixing scandal.
Two strong French clubs in the Champions League would help the profile of the league if both sides reached the latter stages of the competition with regularity.
On the pitch, Ligue 1 would be well placed to rise up the UEFA rankings. Off the pitch there would be an opportunity to negotiate improved TV rights deals due to the presence of star players.
In terms of TV deals, Ligue 1 avoided just avoided financial disaster at the end of last season. The previous deal with Canal Plus and Orange was worth €668 million. But the former partially withdrew and the latter almost completely pulled, before Al Jazeera stepped in at the last minute and negotiated a deal €62 million less lucrative than the previous one.
Compared to the Premier League’s €3.5 billion deal with BskyB, Ligue 1 is light year’s behind. But if the league were to feature the Falcaos, Ibrahimovics and Rooneys of this world, they would close that gap albeit slowly.
If the TV money is distributed equally unlike La Liga, the health of the less wealthy clubs could benefit to a degree. But it would still mean that France’s top flight would be two-tiered with PSG and Monaco at the top, and the rest bringing up the rear which long-term will not do the league any good.
