20 January 2019
Neymar will be paid the equivalent of HK$1 million a day by Paris Saint-Germain, more than five times his current salary. Reuters
Neymar will be paid the equivalent of HK$1 million a day by Paris Saint-Germain, more than five times his current salary. Reuters

Qatar’s 220 million-euro splash on Neymar may not be smart move

The world transfer market has just set a new record, with Paris Saint-Germain reportedly paying 220 million euros for Barcelona forward Neymar.

It is more than double the current world record fee of 89 million pounds paid by Manchester United for Paul Pogba.

Neymar is widely recognized as the world no. 3 football star, after Lionel Messi and Cristiano Ronaldo. But the other two are already in their thirties while Neymar is at the prime age of 25.

In fact, France is often regarded as a second-tier football market in Europe, ranking behind Spain, Germany, UK and Italy. Therefore, it’s quite surprising for Paris Saint-Germain to recruit Neymar with such an aggressive offer.

But if we connect this with the situation of Qatar, it’s not difficult to see the rationale behind the move.

Paris St-Germain was acquired by a unit of Qatar’s sovereign wealth fund in 2011. Since then, the football club has bought several world-class players including Swedish forward Zlatan Ibrahimović and Argentina’s Angel Di Maria.

Qatar will hold the World Cup in 2022. However, the country is engulfed in a diplomatic crisis after four Arab countries severed relations with Qatar in June, accusing it of supporting terrorism.

This could jeopardize Qatar’s World Cup plan, as well as threaten the country’s long-term economic development.

Qatar is thus keen to woo the support of global soccer fans. If Neymar can help PSG win major European tournaments, it could boost Qatar’s chances of resolving the diplomatic crisis as well as pave the way for its successful hosting of the World Cup in 2022.

That said, transfer is usually negotiated between two clubs. Barcelona has rejected PSG a few times regarding the transfer of Neymar.

This time, Paris St-Germain decided to hand over the huge buyout fee of 220 million euros to Neymar and let him end his contract with Barcelona by settling the penalty.

In Spain, football clubs typically set a tremendous amount of penalty for players who terminate their contract before it expires in the release clause. Very few players would transfer this way since he might risk damaging his relationship with the current club.

It’s reported that Paris Saint-Germain would pay Neymar a weekly salary of 730,000 euros, which is about HK$1 million a day, more than five times his existing wage.

The hostile move has angered Barcelona fans. Barcelona representatives over the past few days have reportedly been calling their big European club partners to form an anti-PSG front. And it has received support from Germany’s Bayern Munich and Italy’s Juventus.

Paying 220 million euros to bag a top football player is nothing to the Qatar sovereign fund, which is sitting on US$335 billion, but the move could further alienate Qatar, instead of drawing international support.

This article appeared in the Hong Kong Economic Journal on Aug 3

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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