Thursday, November 9, 2017

PSG: How Big Money is Running World Football (2017)

Controversy
PSG wins the 2015/2016 League 1 title for the 4th time in a row
Back in 2010, Paris Saint-Germain Football Club was relatively unknown to the world. They were the football(soccer) club located in one of the world's most famous cities while competing in the French Lique 1, which is widely known for not being one of the top European leagues. That same year PSG finished 13th in the league out of 20 teams, winning a mere 12 games out of the 38 played. Fast forward to 2017, PSG is now known all over the world and is competing on the highest stages with the likes of historic football powerhouses such as FC Barcelona, Real Madrid FC, and FC Bayern Munich to name a few. It is unreal to see such a drastic transformation happen so quickly and so out of the blue, especially from a team who just 6-7 years ago couldn't even compete to be called the best in France. Today, PSG can be argued to be the best team in the world and certainly have stated their case by dominating opponents in their domestic league while also tearing through the competition in the UEFA Champions League. For anyone who isn't very familiar with European football, the UEFA Champions League is seen as the World Cup for club teams. Now this drastic turn of events, is no miracle or coincidence, this transformation was purposely done and executed by big money beginning to enter world football. In 2011, PSG's whole squad was worth right around 55 million euros or $64 million. Realistically this still seems like a lot of money, but in 2011 this was a fairly low comparing them to Europe's elite. To put it in perspective, FC Barcelona, who won the champions league that same year, has a squad worth of just around 155 million euros or $180 million. Anyone can see the massive difference between these two teams, and yet all it took was a year for PSG to catch up.

In the summer of 2011, Qatar Sports Investments(QSI) purchased a 70% stake in PSG which made them the primary owners of the French club. QSI is is closed shareholding group located in Qatar that reinvests their revenues into sports interests. QSI, led by chairman Nasser Al-Khelaifi, a multi billion dollar man who is also the CEO for beIN media group, have made PSG one of the worlds richest football clubs overnight. In the 21st century the world started to see big money enter the sports world, but QSI out did every other billion dollar man or company trying to stick their nose in world football. The minute QSI took over, PSG began to make massive purchases over the next few months to instantly make PSG into a powerhouse. To start they bought a number of marquee players breaking the world transfer record a numerous amount of times. After all was said and done, PSG had stated their case to be recognized as a real threat to all the big name clubs around Europe

Kylian Mbappe (left) and Neymar Jr. (right) are PSG's
newest and most expensive players
Most recently, in the summer of 2017, PSG continued to spend and has constantly been a dominant force in the french league winning 4 out of 5 Ligue 1 titles since 2012. Although being dominant in their domestic league, they haven't  had as much success in the UEFA Champions League, where the best of best from Europe is crowned. With this constant disappointment in Europe, QSI and Al-Khelaifi decided to make a big splash in this summers transfer window. In a unreal summer deal, PSG splashed the cash needed to unhinge Neymar Jr., one of the worlds top 3 players, from his FC Barcelona contract. QSI and PSG paid a whopping $260 million which absolutely shattered the current world transfer fee record. That amount for one player is actually absurd and really was not even imaginable before PSG went and proved that there actually might be nothing that money can't buy. Even after the biggest transfer in history, PSG were not done yet. They then went and signed the worlds most expensive teenager, when 18 year old Kylian Mbappe signed for the club on a one year loan move with the option to buy for another $200 million. In doing so much business where millions and millions of dollars are being spent, PSG began to be scrutinized and looked into for violating UEFA's financial fair play rules. These rules are in place to pretty much prevent big money from affecting the sport so much where it becomes unfair to other teams and leagues. UEFA believes that Al-Khelaifi and his QSI colleagues are in violation of the financial fair play rules because they are spending much more than UEFA normally allows in transfer windows; making PSG beneficiaries of breaking rules set in place to keep European football as competitive as it can be. With two much spending and no real realization that Al-Khelaifi is crossing some lines this behavior among the soccer and business world can definitely be seen as unethical. 

Stakeholders

The stakeholders in this case are the owners, board, coaches, staff, players and even fans too. Not only are they stakeholders on the people related to the actually PSG football club, but also the stakeholders involved with QSI as well. With a sports teams, the stakeholders are a massive group of people considering "Employees, customers, suppliers, and society that the business impacts are all examples of stakeholders..." (Salazar 18) With PSG coming under investigation by UEFA and also being scrutinized by coaches, owners, athletes and many other public figures, many people are suffering because of it. Most of the criticism is being taken by Al-Khelaifi due to him using his mass amounts of wealth to fund PSG's expenditures in the transfer market. Other than that the coaches, staff, players, and even fans are being affected in both positive and negative ways. In reality, the business decisions being made are seen as unethical, but the coaches, staff, and players are enjoying work more. QSI has not just invested into bringing in good talent, but it has also invested in the club as whole, which includes improvements in facilities for the team and academy as well as improvements in the staff also. Not only do the coaches, staff, and players enjoy being with this team more, but with all the new talent and faces, the fans are now benefitting because the club is winning more and more. In this case, the stakeholders are really benefitting, but with positives comes negatives. The issue with breaking or disregarding the UEFA financial fair play rules is that, if you are found guilty, they have the power to hand down fines and sanctions on the club. Most of the time, clubs who violate any of the financial fair play rules are handed transfers bans which doesn't allow the club to make or do any business during the transfer window. The problem with this is that if players begin to be unhappy or even get injured, PSG would not be able to go out and sell or bring in any new players at that time. If this was to happen to PSG and they lost 2 or 3 of their best players, the moral around the club would go down and the losses could start outnumbering the wins. In this scenario, these business decisions would certainly affect all the stakeholders involved in a much more negative way. 

Individualism
Individualism is an ethical theory that stresses the importance of self-interest. "Business actions should maximize profits for the owners of the business, but do so within the law," (Salazar 17) PSG has been spending insane amounts of money ever since QSI took over. The amount of profit they are making is unreal due to bringing in marquee players, along with all the victories coming in local and european competitions. The issue with this, is although PSG is certainly acting with complete self interest in maximizing profits, they realistically are not acting within the law. UEFA has a set of laws in place called Financial Fair Play rules which try and limit the amount each club can spend in order to make sure all leagues are competitive. UEFA's financial fair play rules have a basic principle established that a club must earn more than they spend. With this rules, there are certain ways to give you a bit of wiggle room in order to stay within the law. But with PSG paying so much in one transfer market for players, it is going to be very hard to have its income match their expenditures. If or when PSG is found to be not following the FFP rules, from an individualistic standpoint, they will have failed due to not acting within the law. 

Utilitarianism 
PSG President, Nassar Al-Khelaifi with the worlds
most expensive player, Neymar Jr.
Utilitarianism is an ethical theory that deals with the consequences of the decisions made. If the decision is positive and benefits the overall good of the business, as well as keeping the happiness of shareholders in mind than it is seen as ethical by a utilitarian.  In this case a utilitarian would look at PSG and see them as doing the right things, considering PSG has not yet been found guilty of anything. Regardless, PSG is spending all this money and bringing in numerous world class players who seem to create happiness amongst everyone at the club. The wins, the publicity, the environment have greatly changed for the better due to the business decisions of QSI. Al-Khelaifi wanted to change the image of his club and he was willing to do and spend whatever it takes, to bring them to the top. In this particular situation, a utilitarian would be okay with decisions of QSI because happiness is being achieved by all the affected parties. 

Kantianism
Kantian values are based on rational decision making, honesty, and respecting the individuals involved. In this particular case, a Kantian would look at PSG's decisions as most likely unethical. PSG is acting fairly irrationally when it comes to spending their money and how they handle some players. They bully other clubs away from taking their players and then go around and throw money wherever they please in order to get who they want. For example, just before PSG muscled their big money to pry Neymar away from FC Barcelona, Barcelona had inquired about one of PSG's players. PSG immediately shut Barcelona down and then threw the 222 million euros right at Barcelona in order to steal their second best player. They also aren't acting in complete honesty with how they are maneuvering around the financial fair play rules. Besides that PSG are also not respecting who they are doing business with and everyone who is being affected by their decisions. This summer PSG made headlines by setting the transfer record by signing Neymar Jr. Not only Neymar, but they have consistently over paid for players because they have the money to spend. With PSG spending these ridiculous amounts the whole soccer world is feeling the aftermath with players demanding more and more. Twenty years ago, even the best player in the world wouldn't go for more than 5 or maybe 10 million. Nowadays with big billionaires backing these clubs, world record transfer fees are being shattered every other transfer window. Although it is good and the sport is continuing to grow, some of these transfer fees are absurd and clubs that don't have that kind of wealth backing them can not keep up. 

Virtue Theory
This theory deals mainly with accomplishing good character traits while avoiding bad ones."Act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits." Some of these good character traits discussed in virtue theory include courage, honesty, temperance, and justice. In PSG's case, they succeed in being courageous because PSG really revolutionized this game into something brand new. Not necessarily good or bad, but into an age of big money factoring into world football. Although this also has its negative aspects, seeing more and more money get involved in the game just means it is continuing to grow and expand. Besides being somewhat courageous, PSG definitely did not fully succeed in acquiring these good traits. They were not being honest with how they did what they did, and certainly were breaking some rules in order to accomplish these massive transfer fees. In spending the way they did, they tried to exploit certain loopholes within the FFP rules as well as even just not acknowledging them. They weren't acting within the law and they certainly weren't acting in a just manner. A synonym for justice is fair, and considering PSG is under investigation by UEFA for possibly violating the Financial Fair Play rules, you could assume that PSG was not acting in the most fair manner that they could have. With these four aspects not being met, PSG seems to be acting in a fairly unethical manner. The unique thing with PSG and this certain case is that, yes it is a business, but it is also a sports team. With regular business the one goal is to make money, and yes of course these billionaires from Qatar want to make their fair share, but they also want to have their club be successful. The desire to win is different from the desire to make money. There are more ways to be profitable in sports than to spend really big just to hope you can make big money back. Al-Khelaifi and QSI wanna make PSG into something bigger than just a nice paycheck, they want to make the club into one of the world's best and leave behind a legacy. In reality, yes the four traits weren't met, but PSG is being courageous and just in order to reach their personal goals. 

“Paris Saint-Germain F.C.” Wikipedia, Wikimedia Foundation, 9 Nov. 2017, en.wikipedia.org/wiki/Paris_Saint-Germain_F.C.

Schofield, Hugh. “PSG's dramatic rise to European giants.” BBC News, BBC, 8 May 2014, www.bbc.com/news/world-europe-27314338.

“Paris Saint-Germain F.C.” Wikipedia, Wikimedia Foundation, 9 Nov. 2017, en.wikipedia.org/wiki/Paris_Saint-Germain_F.C.

Bairner, Robin. “Neymar to PSG: How much have Qatar owners spent on transfers since 2011 takeover?” Goal.com, 8 Apr. 2017, www.goal.com/en/news/neymar-to-psg-how-much-have-qatar-owners-spent-on-transfers/1kpoa9c2p4mpw1vjorclin0tm9.

Salazar, Heather. Western New England University. Fall Semester Notes/Powerpoints

2 comments:

  1. Great blog especially for someone that doesn't follow the sport. As an avid American Football fan I find the issue interesting because the NFL implemented their own salary cap in the 1990's to prevent the same thing from occurring. Teams such as the Steelers and 49ers used the limitless cap to their advantage by retaining any player they pleased during runs in the 70's and 80's. This held back poor teams such as the Buccaneers and Patriots who were new and didn't have the same assets. What PSG created an unfair, unethical advantage. Teams in the NFL that broke these rules (such as the 90's Broncos,) were fined for their actions. You did an excellent job explaining the issue and providing data backed details. My only two suggestions are to go into further detail on what Kantianism and Virtue Theory are and there core values. It would help readers understand your case.

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  2. I thought you did a great job with this post! As someone who follows soccer, and likes PSG, I find this very interesting how they transformed from a weak club into a world class club in a short span of time. I'm not sure how I feel about teams being the best because they have the most money; however, it seems that is the culture now. To further improve you blog, I suggest going into more detail in utilitarianism, and make sure to assess in some detail the costs and benefits of each main stakeholder and explain what in the long term would be best for everyone

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