Why has LaLiga filed a complaint against Paris Saint-Germain to the European Commission?

LaLiga has resumed its fight against state-backed clubs, and Paris Saint-Germain in particular. The Spanish professional leagues’ organising body, headed by president Javier Tebas, has filed a complaint against the Parisian club to the European Commission under the European Union’s Foreign Subsidies Regulation (FSR). According to LaLiga, clubs in Spain believe PSG’s financial model and activity has “seriously distorted the European single market” and allows them to sign players they wouldn’t be able to under normal circumstances. The Ligue 1 champions spent over €400 million (almost $440 million) to sign Neymar and Kylian Mbappé, the two most expensive players in history.

This is not the first time LaLiga has lodged a complaint against PSG, which they also did to UEFA, the ordinary courts and the European Union as recently as last year, when they claimed the French champions were continually breaching financial fair play regulations (FFP).

What is the EU’s Foreign Subsidies Regulation?

On this occasion, the Spanish league is using the recently established FSR to revisit the matter. “This regulation, which began to apply on 12 July 2023, relates to foreign subsidies granted by states outside the EU to companies engaged in economic activities in the single market, including those originating from public enterprises directly or indirectly controlled by a state, encompassing even those subsidies granted during the five years prior to the enforcement of said Regulation.”

LaLiga: PSG’s market value “artificially increased”

LaLiga believes PSG have received subsidies from Qatar that have “enabled them to improve their competitive position and generate significant distortions in various national and EU markets.” More specifically, “they obtain resources under non-market conditions that distort different closely-related markets, with these foreign subsidies allowing PSG to recruit the best players and coaches, far beyond what would be possible in a normal market scenario. They are also able to secure sports sponsorship revenue at figures that do not correspond to market value. This not only enhances their sporting performance but also affects the hiring capacity of rival clubs.”

European Commission urged to “take necessary measures” against Ligue 1 champions

The Spanish league warns that PSG’s “economic manoeuvers” lead to an “artificial increase in the club’s value in the market”, which in turn has an impact on the TV rights market, in which different leagues compete to increase their television revenue. In light of this, LaLiga “trusts that the European Commission, with the help of this new regulation, will take the necessary measures to eliminate such market distortions, which severely harm the sports ecosystem.”