La revolution reverse

Pontus Maltborg examines the changing face of France’s Ligue 1

The French football Ligue 1 has long been the league of the many and of unpredictability as it has had 6 different champions during the last 6 years and lacked real established hierarchy. This is however drastically changing as the French league is now turning into a tale of two cities or rather a tale and battle of two kingdoms. On the one hand we have Paris Saint Germain backed by the kingdom of Qatar and on the other side we have AS Monaco backed by Russian billionaire extraordinaire and former fertilizer magnate Dmitry Rybolovlev.

AS Monaco, a classical Ligue 1 club, fell on hard times a couple of years ago, was relegated to the second division and left fighting a mountain of debt. Enter Dmitry Rybolovlev who swopped in, rescued them cleared, their debts within a month and laid out ambitious plans to return the club to former glory.

AS Monaco, located in the petite principality and tax haven of Monaco, has always been an appreciated guest star in the French league being too small to really challenge the order of things. They have contributed flair and “joye de vivre” to spice up the scenery and occasionally snatched a title once every ten to fifteen years. The club’s trump card has always been the fact that they have been freed from paying income tax being registered in the tax haven. This has always been seen as an acceptable advantage to their competition as the principality club always has had a too small budget to remain competitive otherwise. However, with their new found backing the landscape is drastically about to change.

Many experts had foreseen that the Ligue 1 would soon become a duopoly due to no other club being able to compete with the financial clout of the Parisians and Monegasque. Few had, however, envisioned that it would happen as soon as this year as Monaco are freshly promoted from the second tier and few thought that their ambitious goal of finishing in the top three would come true.

Two recent factors have accelerated this change and spurred the formation of the new order. One is AS Monaco’s massive outlay of €120 million this summer on players. More than 80% of this has been orchestrated of Portuguese “super agent” Jorge Mendes so he must undoubtedly be the happiest man of the summer as apart from placing all his eggs in the principality tax haven basket, he has earned a monumental commission on the transfers. The other factor has been the entrance of socialist François Hollande whose looming tax proposal (an astronomical tax for everyone on an annual salary of over €1 million). This new tax threat has prompted the top players in the remaining Ligue 1 clubs to get cold feet and look for greener pastures new abroad in Germany, England, Italy and Spain. This has been a major blow to everyone with title aspirations apart from Qatari backed Paris who have only seen the move as an opportunity to further cement their dominance in France.

This has also been a double blow to the rest of the league. Ironically the socialist government of François Hollande has contributed to competitive inequality in the French Ligue 1. The other clubs haven’t been slow to react however voting through (prior to Monaco’s promotion) a ruling that from the 2014/2015 season all clubs playing in the French top flight are required to be registered for tax reasons on French soil. Such a ruling if imposed would cost Monaco between a reported €150 to €200 million in extra wage and social costs.

Monaco hasn’t been late to challenge this ruling saying it is in clear violation of the Franco–Monegasque treaty of 1861 as well as the Franco–Monegasque tax agreement signed roughly a century later. There have also been murmurs of veiled threats of AS Monaco defecting to the Italian league system although this is seen as highly unlikely and would be administratively complicated. So, the jury still remains out of what will become of Ligue 1 but at the moment it is clearly becoming a tale of two kingdoms.

Stockholm and Warsaw based Pontus Maltborg is a football expert with a passion for scouting and talent development. Follow him on Twitter @PontusMaltborg.

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