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SBD Global/May 1, 2014/Finance

Man City, PSG Facing Squad Restrictions Over Financial Fair Play Violations

PSG's sponsorship contract with QTA is thought to be worth $277M a year.
Man City and Ligue 1 side Paris St. Germain "are expected to have financial restrictions imposed on their squads" for next season's Champions League "after breaching UEFA's spending rules," according to the MANCHESTER EVENING NEWS. The expenditure restrictions for breaking the Financial Fair Play rules "would see both clubs effectively given a limit on the salary bill of their European A squad." The clubs "are also expected to be ordered to make a cut in the number of players permitted in the A squad," which is normally 25-strong, and "to be handed large fines" when UEFA's Club Financial Control Board meets on Thursday and Friday. The sanctions packages "are understood to be part of a settlement offer to the clubs, which they can accept, reject or try to negotiate ahead of the meeting'' (MANCHESTER EVENING NEWS, 4/30). In London, Ben Rumsby reported the investigatory chamber of the CFCB has decided that Man City’s "unprecedented" £1B spending spree under the ownership of Sheikh Mansour "did not comply with FFP rules." Man City and UEFA "declined to comment on Tuesday night" on precise details of any settlement offer or whether one had already been agreed. However, UEFA "has previously made it clear that fighting on would put a club at risk of a more severe penalty." Even if Man City agrees to settle its case, FFP rules "allow Premier League rivals such as Arsenal and Everton to challenge any sanction they deem too lenient." The latter clubs "could argue City’s breach materially affected their chances of finishing third or fourth in the table, and thus hindered their European qualification hopes'' (TELEGRAPH, 4/29). ESPN's Mark Rodden reported PSG "will have to make up a huge budget deficit next season if a sponsorship deal with the Qatar Tourism Authority is devalued" by the CFCB. PSG's sponsorship contract is thought to be worth €200M ($277M) a year, but both Le Parisien and RMC reported that -- in an investigation into compliance with FFP rules -- UEFA "will value it at only half that sum." Le Parisien suggests that UEFA’s revised valuation of the deal would see the French champions’ deficit for the '13-14 season reach €107M ($148M) -- more than double the €45M ($62M) "allowed under FFP regulations" (ESPN, 4/30).
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