Sarkozy orchestrates Qatar's French revolution

Sat, Nov 19, 2011, 00:00

FRENCH FOOTBALL: MATT SPIROon how the French president reportedly played an instrumental part in turning round Paris Saint-Germain’s fortunes, as well as helping to save the French game from possible financial ruin

TIMES ARE tough for Nicolas Sarkozy. As unemployment in France continues to rise and the euro-zone crisis looms large, the French president’s popularity ratings have sunk to worryingly low levels. Yet the under-fire leader can at least console himself with one pleasing statistic: his favourite soccer team, Paris Saint-Germain, are top of the league.

The observation is not quite as frivolous as it sounds. For a start, Sarkozy and his sons Jean and Pierre are genuine PSG fans, frequently spotted at the Parc des Princes. Furthermore, in the past 12 months, Sarkozy has reportedly played an instrumental part in turning round the capital club’s fortunes, as well as helping save the French game from possible financial ruin.

There were grave fears for the future of Ligue 1 earlier this year. The lucrative television rights deal that had been keeping teams financially viable was up for renewal in 2012, and experts were predicting a gigantic fall in revenue that would threaten the existence of many clubs.

In 2008, the French League (LFP) succeeded in playing Canal Plus off against Orange to secure the impressive sum of €668m per season to share among top-flight clubs. While that figure is dwarfed by the Premier League’s €1,176 million a year, the package puts France above Spain (€542m) and Germany (€412m), and only just behind Italy (€863m), when it comes to TV money. Not bad at all for a league that is considered only the fifth best in Europe.

French soccer, however, has come to rely far too heavily on this source of income. The clubs earn precious little through commercial activities, and low ticket prices and attendances mean gate receipts are also modest.

So when Orange announced they were pulling out of the bidding for the 2012-2016 tender, leaving Canal Plus with a monopoly, panic set in. “There was real concern,” explains Etienne Moatti, L’Equipe’s sports finance expert. “In France, TV rights account for 57 per cent of a club’s revenue. Given that Ligue 1 teams ran an overall deficit of €153m last year, losing this TV money would have had dramatic consequences.”

Certain club chairmen even began wondering if the 2012/13 campaign would go ahead. “We can’t dismiss the possibility of a crash,” said then PSG president Robin Leproux in March.

“If the TV revenue is cut in half, some clubs will go under. That would be disastrous for French soccer, but also for Canal Plus who could find themselves without any games to broadcast.”

LFP president Frédéric Thiriez searched hard for a solution. Two TV networks, TPS and Orange, had already tried to compete with Canal Plus and failed. Nobody else wanted to get stung. Thiriez therefore decided he had to create the competition himself: the LFP set up their own TV channel, CFoot, which would provide a second platform for Ligue 1 matches. Many were dubious as to whether this unprecedented step made any sense.

Ligue 1 was ultimately saved from its doomsday scenario, but not by Thiriez and not by Canal Plus. While the world of soccer fretted, crucial talks were taking place at the very highest level.

The French magazine So Foot claims that on November 23rd last year, Sarkozy invited the Crown Prince of Qatar, Tamim Bin Hamad al-Thani, and Uefa president Michel Platini to the Elysée Palace for lunch. It explains Sébastien Bazin, the European representative of PSG’s American owners Colony Capital was also present. The aim of the talks, it seems, was to convince Qatar to invest in French soccer, and more specifically to purchase PSG.

The oil-rich Middle Eastern state had already shown an interest in 2006 when PSG’s former owners, Canal Plus, decided to wash their hands of an underachieving club that haemorrhaged money and was renowned for its hooligan element.

The takeover fell through because Canal Plus and the City of Paris, who own the Parc des Princes, were uncomfortable receiving funds from a nation they felt had questionable human rights laws.

However, with Colony Capital continuing to lose around €20m a year on PSG, the need to sell became more urgent. Bazin tried to rekindle Qatari interest in June 2010, but it was only after Sarkozy’s intervention five months later that a deal became possible. France’s president allegedly pulled out all the stops, making the most of his and France’s privileged relationship with Qatar.

“He was very interested in the dossier,” Elysée spokesman Franck Louvrier commented. “He was keen because these people wanted to invest in France, but also because he’s a (PSG) supporter.”

France has developed close ties with the Arab state that boasts the highest GDP per capita in the world. According to Libération, some of France’s biggest companies – Suez, Vinci, Airbus and Areva – are part-owned by sovereign funds from Qatar.

The government also encourages Qataris to invest in the French property market by exempting them from paying capital gains tax. In March, there was further evidence of the rapprochement when Qatar sided with France by voting for the Libyan air strikes resolution.

Sarkozy appears to have established an excellent relationship with the influential Sheikh Tamim. Indeed, the fourth son of the Emir of Qatar, who is heir to the throne, received the prestigious Legion of Honour award from France’s supremo shortly before the infamous November meeting.

Sheikh Tamim must have been intrigued by Platini’s presence that day. So Foot suggest the former France captain was dead set against Qatar’s 2022 World Cup bid before being urged to change his mind at the meeting with Sarkozy. “He told me the Qataris were good people,” Platini is quoted as saying. Ten days later, the head of Uefa voted for Qatar.

It is nevertheless difficult to imagine Platini playing an active part in Qatar’s purchase of PSG given his well-known desire to establish “Financial Fair Play” in Europe. Yet by voting for the Arab state, some are suggesting he may have done just that.

The takeover was completed in June when Qatar Sports Investment (QSI) – a branch of Qatar’s sovereign wealth fund headed by Sheikh Tamim – secured a 70 per cent holding of PSG. As Moatti puts it, Qatar simply “did France a small favour”. The L’Equipe journalist adds: “They were looking to buy a club in Europe. They wanted Manchester United but it wasn’t possible, so they went for the far cheaper option: PSG.”

Sheikh Tamim installed Nasser Al-Khelaifi as PSG president. Al-Khelaifi is also the director of the Doha-based Al Jazeera Sport television network, and it quickly became clear buying PSG was only the tip of the iceberg as far as the Qataris were concerned. In the summer, Al Jazeera Sport bought the international TV rights for Ligue 1 for six years at a cost of €192m. Spotting an opportunity, the LFP persuaded Al Jazeera to enter the race for domestic rights as well.

Al Jazeera’s late arrival has been a godsend for French soccer. The LFP sold the first instalment of the domestic rights for €510 million, with Canal Plus and Al Jazeera Sport purchasing two games each. Once the remaining matches are sold, along with mobile phone rights, the final figure will come close to matching today’s deal. At a time when clubs everywhere are tightening their belts, Ligue 1 is suddenly in a strong financial position.

PSG are, of course, leading the way. QSI have already secured the capture of Leonardo as sporting director and invested €85m in new players. They flexed their muscles by signing one of Serie A’s most mercurial talents, Argentinian Javier Pastore, for a French record €42m from Palermo – and David Beckham is next on the list.

The former England captain may be 36 but Al-Khelaifi knows his arrival would drum up considerable global interest. “Beckham transcends Ligue 1,” he says. “He’s an ambassador, a brand, an example to others.”

The bar has been set high by Al-Khelaifi, who wants PSG to win the title this term and compete for the Champions League within three years. But he also needs the league to remain competitive for Al Jazeera to have an attractive product.

All 20 clubs will benefit from the TV revenues from 2012. In the meantime, PSG will prioritise internal transfers to keep the money in Ligue 1. France internationals Kevin Gameiro and Blaise Matuidi have already been bought from Lorient and Saint-Etienne respectively, while rumours of a €50m raid for Lille’s Eden Hazard continue to grow.

Qatar’s French revolution is in full flow, yet this is only the start. Where they will stop is unclear, but nobody should underestimate Al Jazeera’s potential. Bankrolled by the Qatari royal family, they already boast five international networks: AJ Arabic, AJ English, AJ Sport, AJ Documentary and AJ Balkans. In 2012, they will launch AJ Sport France.

In terms of audiences, Al Jazeera is the world’s fastest growing broadcaster, reaching out to tens of millions. For last year’s World Cup final, AJ Sport attracted 162 million viewers. Reports in France suggest Al Jazeera are preparing to outbid Canal Plus for the Champions League rights, while UK broadcaster BSkyB may well have to compete with them for the Premier League rights next year.

Whether David Cameron is quite as welcoming as Sarkozy was remains to be seen, but few in France are complaining about this particular presidential intervention.

The Main Protagonists . . .

Nicolas Sarkozy: French president since 2007, the 56-year-old is a staunch PSG supporter and has reportedly established strong links with the Qatari royal family.

Tamim Bin Hamad al-Thani (Sheikh Tamim): The fourth son of the Emir of Qatar and heir apparent to the throne, this former Harrow school pupil is chairman of the Qatar Investment Authority, the state’s sovereign wealth fund that bought PSG in June.

Sébastien Bazin: The European representative of American investment firm Colony Capital, which part-owned PSG from 2006 to 2011. Bazin counts Nicolas Sarkozy and Arsène Wenger among his close friends.

Nasser Al-Khelaifi: Appointed PSG president after the Qatari takeover, this close friend of Sheikh Tamim is also the director of Al Jazeera Sport.

Michel Platini: The Uefa president and former France captain allegedly attended a crucial meeting at the Elysée Palace shortly before voting for Qatar to host the 2022 World Cup.