SBD Global/December 31, 2012/FinancePrint All
There was cause for celebration in the halls of Ligue 1 club Paris St. Germain when France’s Constitutional Council struck down President François Hollande’s proposed 75% marginal tax rate on those making more than €1M ($1.3M) a year, according to Gabriele Marcotti of the LONDON TIMES. Many of the top wage earners are footballers and "many of those happen to play" for PSG. Currently, the top tax rate in France is 45%. Some "simple math shows how much havoc a jump to 75% would wreak on PSG." Take Zlatan Ibrahimovic, who earns €14M a year after tax. Right now, this means he makes €25.5M before taxes, or, just more than $640K a week. With the 75% tax rate in effect, PSG would need to pay him somewhere around €52.5M a season for his take-home pay to be unaffected. No, that’s not a typo ... that’s around $1.3M a week. PSG would need to increase their wage bill by close to 50%. In an age of Financial Fair Play, "that would have simply been untenable." The 75% tax rate "has been struck down only on a technicality of the kind that is easy to fix." The French government has pledged to rewrite the legislation and reintroduce it next year, so the issue has not fully gone away, "but 12 months is a long time in politics and football, which means that, for now, PSG and their backers can breathe a sigh of relief" (LONDON TIMES, 12/31).
League Championship side Leeds United has "underlined the importance of GFH Capital’s recent takeover" by publishing new figures that reveal a major financial downturn, according to Phil Hay of the YORKSHIRE EVENING POST. The club’s results for the 12 months leading up to June 30 show "marked decreases in turnover and gate receipts and an operating loss of more than £3.3M." Leeds United posted an overall profit of £317,000, helped by the sale of ex-player of the year Max Gradel and former captain Jonathan Howson. However, the figure "decreased dramatically" from £3.5M during the previous 12 months. Gate receipts were down 10% and turnover fell by almost 5% to just more than £31M. United’s parent company, Leeds City Holdings Ltd., saw "more severe decreases" with its operating loss standing at £4.2M and its overall loss recorded as £536,000 (YEP, 12/28).