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SBD Global/December 23, 2013/2013 Year In Review
2013 Year In Review: French Tax Hike, FIFA's Qatar World Cup Debate Dominate Europe
Published December 23, 2013
The SBD Global staff compiled the top sports business stories for '13 by region to be published in the final four Global editions of the year. Here are the top stories from Europe and Russia.
TAX HIKE: When French President François Hollande ran for office in '12, he promised a 75% tax on the country’s top earners. More than a year into his presidency, the 75% tax has still not been introduced and was even ruled unconstitutional by a French court. However, Hollande revised his original plan of taxing individuals earning more than €1M ($1.37M) to taxing employers which pay their workers more than €1M. This, of course, would also apply to football clubs, which regularly pay wages in excess of €1M. Hollande’s plan to put a 75% tax on the country’s top football clubs caused uproar across Ligue 1 and Ligue 2. The country’s top two divisions even considered going out on strike. While the proposed strike could be averted, the 75% tax rate is still not off the table. The government's recently announced decision to exempt Ligue 1 side AS Monaco from the tax could be an indication that Hollande is backtracking from his plans. Otherwise, Monaco would have an unfair advantage.
SPANISH ARMADA: The European Commission will launch an investigation into allegations that several Spanish teams unfairly received government assistance in the '90s. A complaint made by the EU’s antitrust body in '09 claimed that the clubs received several billion euros worth of improper tax breaks and loans from the Spanish government. Should investigators determine the clubs received illegal state aid, they will be forced to pay back the financial assistance to the government. The seven Spanish clubs in question are La Liga sides Real Madrid, FC Barcelona, Osasuna, Athletic Bilbao, Valencia, Elche and second-division club Hercules. The Commission said it was concerned that the alleged aid had given these particular clubs an unfair advantage at a time when all clubs were struggling financially. The investigation is expected to shed light on the close ties in Spain between all levels of government and football teams.
SUMMER IN THE CITY: FIFA has arguably had better years than '13. First there was the issue of bribery inside the association, which was followed by accusations that Russia and Qatar bought their respective World Cups in '18 and '22. As the Confederations Cup approached during the summer, people focused their attention on Brazil. The South American country has been plagued by protests, rising costs, construction delays and the death of several stadium workers. Meanwhile, a heated debate ignited regarding expected high temperatures during the 2022 World Cup in Qatar. While the top int’l football leagues are still figuring out during what time of the year the tournament should be played, FIFA acknowledged that it should have realized when it made the decision in '10 that a World Cup in Qatar in the summer would be a mistake.
NO SNOW IN PARADISE: The build-up to and construction for the 2014 Sochi Winter Games were overarching themes throughout the year. The cost explosion from an original $12B estimate to now more than $51B, including a 30-mile road and rail line from Sochi to the mountains where the skiing events will take place, is just one of the troubles organizers are dealing with. In addition, Russia’s anti-gay law, which bans the promotion of homosexuality to minors, has resulted in calls for boycotts and protests by LGBT groups around the world. As if that’s not enough, organizers, politicians and Russian President Vladimir Putin have been accused of corruption and money laundering. Besides all these behind-the-scenes issues, there is the very obvious problem of snow, or the lack thereof.