Paraphrasing the usual rounds, one thinks of power and possession in terms of the military and physical assets, but soft power, a sort of an intangible asset, is used time and again to display abundance in non-natural resources. Tourism is such an example. In this case however it’s all about the deft hover of feet around balls  rather than around the globe.The football world is not untouched by diplomatic and economic ripples, and such an incident took place when recently Paris Saint Germain, the French football team, lobbied Neymar for a whopping amount of $264 million.

Let’s trace the money trail …

Paris Saint Germain is owned by Oryx Qatar Sports Investment, a privately owned company based in Doha, which is, in fact, the main channel for Qatari investment. The Qataris have their hands tied since June by diplomatic conundrums, as an Arab group led by Saudi Arabia left Qatar and Doha in isolation. To lift the ‘ban’ from Doha, the opposition released 13 points list of demand to bend the natural gas giant’s knees. This list also mentioned the closure of Al Jazeera, a state-funded broadcaster based in Doha.The Qataris retaliated with due force ,ripping open their purse strings  for Neymar and putting on show their ability to acquire soft power.

 

What does it mean for Qatar? 

Qatar’s infatuation with football goes a long way. The host of world cup 2022, Qatar owns stake in sports  teams through al Jazeera and holds the name Qatar Airways which adored FC Barcelona’s jerseys from 2013 till 2017. They’re well versed in their game. This move of acquiring the male prodigy of Spain is in tandem with their unsaid motto of “hold your assets with the best.” Such media coverage with international sports is gaining them the goodwill they desire and leaving its opponents paralyzed for the time being.

 

What does it mean economically? Is it economically viable?

To break even with their giant deal, Qatar has to sell half their team! To spend half the revenue does not seem economically viable but it is a strategic move with longtime implications. Deloitte’s recent report on “football money list” places Paris SG as the sixth biggest club in the world by revenue. But it is just not the club, but the owners itself have accumulated enough funds that this deal will dent hardly their budget. With the largest per capita reserves, Qataris recent business handshakes with Italy and United States regarding military weapons are a source of coming gains. Neymar’s onset in this new club itself brought much business. Apparently, on the day the Neymar’s buyout was announced even before Neymar kicked the ball for his new club, PSG announced it had recouped over 1 million already and just not that fans queued up in Paris for hours to spend $118 for every Nike jersey bearing Neymar’s name.

The club sold more than 10,000 jerseys, and the demand was so great that the jerseys had to be rationed. And it is not just the one stream of revenue. With the coming matches club will gain both financially and non-financially indicatively from match-day (ticket and corporate hospitality sales), broadcast rights (distributions in domestic leagues, cups, and European club competitions) and commercial sources (sponsorship, merchandising, stadium tours and other commercial operations). On the non-financial gains, attendance, worldwide fan base, broadcast audience and on-field success, all of which would be magnified and monetized. Not just his presence in the 11 but the representative of coming of age sportsperson, Neymar’s brand value will bring in funds from commercial endorsements, additional sponsorships, and image rights, given his marketability. In fact, the buzz around his buy-out fee may have bumped up his star value.

What does it mean for football?

As football has become more consumable, inflation has left no reason to hold its step on its door. The price tag attached to Neymar- Paris deal will inflate overall prices in the football world.  Not only monetarily Neymar will now serve as the benchmark for the rest of the PSG players, requiring his teammates to raise their games as well. This should have a positive domino effect in the league. Moreover, PSG’s opponents will also find themselves in a non-negotiable position to set their bar higher. That means an improved overall performance. That implies, eventually, larger viewership, and, needless to say, more money. In turn, this would swell the purchasing power of most of the clubs involved. Meaning, more smack and standing and wherewithal to attract better talent to France in the face of fierce competition from the league’s more popular and more moneyed counterparts, chiefly the English Premier League and La Liga. The cycle goes on.

Arsenal produces the second highest matchday revenue of any club in the world (Deloitte)

What does it mean for us?

Though personally I would the  miss the MSN partnership (the triforce of Messi,Neymar and Suarez) in El Classico , it is now time to sit back and let the myriad world of sports, politics, commerce, and economics play their own game.

To understand the motive of big money in football; all you just need an eye for the “Game.”

 

Links for further reading:

 

https://iea.org.uk/blog/economics-matters-even-in-football

https://www.google.co.in/amp/s/www.newstatesman.com/politics/sport/2016/09/why-football-not-olympics-can-help-us-understand-economics%3Famp

https://themarketmogul.com/economics-transfer-market/

https://syndication.bleacherreport.com/amp/1641327-why-the-current-economics-of-football-cannot-be-maintained.amp.html

 

-Sejal Singh

 


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