There’s a higher class game of bluff than usual currently taking place in Monte Carlo. This one involves a Russian billionaire and in the last two weeks alone over £100 million being wagered. Dmitry Rybololev, Monaco’s majority owner, is betting that French football can’t do without the players and profile that his spending spree is threatening to bring. He is in all probability absolutely right.
AS Monaco has always been a special case, their unique position in a principality allowing them to pay extremely low rates of tax (although historically this often only applied to foreign nationals). It is only with their recent promotion back to Ligue 1 and Rybololev’s spending that this has been challenged. In March French clubs took the unprecedented step of voting to restrict membership to clubs registered in France for tax purposes. Monaco immediately appealed and are set to hear the verdict on June 20th. They will argue that their tax status is enshrined in law (dating all their way back to 1869). Their current spending levels should give some indication of their apparent confidence in the outcome.
That their current tax exemption gives them an unfair advantage is unarguable. On the mainland it would cost a club three times as much before tax to pay a player the same wage that Monaco could. Even for the Qatari backed PSG this is a concern. When they signed Zlatan he negotiated a deal that would give him £13 million a year after tax. Due to Hollande’s recent tax increases it costs PSG £47.5 million a year to maintain his wage. This 75% rate above on any wage above a million Euro has done as much as anything to get the clubs questioning Monaco’s position.
Obviously Monaco are not anywhere near to complying with the same conditions as the clubs in the league they intend to join. This may be a unique situation in a domestic league but across Europe clubs currently compete against each other with vastly differing standards of financial management. When a Spanish team seemingly encouraged to maintain vast levels of often public debt comes up against a German team that has to exist with minimal losses the playing field is anything but level. UEFA’s Financial Fair Play is so far the only attempt to deal with this (although quite what would be able to do about Monaco whose tax advantage is enshrined in law is unclear).
Monaco aren’t acting like a club wondering where they’ll be playing next year. They’re currently involved in the sort of dream team building spree we’ve all fantasised about being in charge of at some point. And they’re going about it like anyone would, focussing on attacking players first. The £50 million capture of Falcao works as both a statement of financial muscle and footballing intent. Being able to sign the best player in Spain not playing at the big two (and with their league apparently not even assured) is as much of a marker as the Zlatan signing was for PSG. James Rodriguez and Joao Moutinho are players of great promise coming into their prime who undoubtedly both had offers from elsewhere. To turn down the chance of playing in Europe at least for a season is a measure of the wages on offer but also shows the assurances they’ll have been given on how quickly the team will be contenders for trophies. That their three big signings have come from outside France hasn’t gone unnoticed. The theory is that Rybololev had intended on investing in home-grown players until they voted his club out the league. Now they get to watch as the money flows away from them.
And what would a dream team be without someone signing Ricardo Carvalho? From Chelsea to Real Madrid he’s been there. Monaco allows him a last chance to collect a big wage and tell his team mates what was expected elsewhere. Carlos Tevez, Victor Valdes, Diego Costa and Nicolas N’Koulou may well join him. After the transfers in the last couple of weeks almost nothing would be surprising.
So what is it about Monaco that appeals? Apart from the money, lifestyle, casinos, yachts, cars and the chance to bump shoulders with the superrich that is? The weather? That helicopter that takes players from Nice airport and lands right outside the stadium? It’s not as if it’s a new phenomenon. After all Monaco have always been able to punch above their standing in attacking players (Stade Louis II Capacity: 18523). Vladimir Jugovic, Jurgen Klinsman, Sonny Anderson, George Weah and Glenn Hoddle are just some of the players they’ve attracted over the years. They were in the Champion’s League final nine years ago. They do have history.
Rybololev’s intention is to take advantage of Monaco’s tax status to try and guarantee his club a place in the Champions League. Either accidently or by design he’s doing this at a time when 90% of the other clubs in Ligue 1 are struggling to deal with new measures limiting their spending powers further (through tax). With the players they’ve signed you’d have to back them to make the top three this year. After that, with further signings likely, it looks like they could be the main challengers to PSG in the immediate future. Marseille and their 20 million fans could have a say in that (especially if FFP comes into account) but beyond that it’s difficult to make an argument for anyone else getting close. In an odd way FFP could be responsible for this. If the influence of outside investment is negated then clubs will look to other advantages to sustain success. PSG’s owners recently made a big deal of the size of their catchment area for possible future youth prospects. Manchester City have begun talking of the investment and possible reliance on their academy. Without a large area to draw on or a sizable average attendance to contribute to their coffers Monaco’s tax situation could be theirs.
Presuming that the ruling on June 20th goes their way (and there’s every indication to say it will) Claudio Raneri has plenty to ponder before the Ligue 1 season gets underway. Other teams have had success after such massive investment but if events at Man City, Chelsea and PSG have taught us anything it’s that often it takes time to build a team strong enough to compete for the top honours. The way things are going at Monaco you wouldn’t be surprised if they spent another £100 million trying to jump the queue. The question French football has to ask itself is if it can do without them.