Death of French Football?

Europe is all set to witness another French revolution. This time though it won’t be seen on the streets. Rather it would be seen on the football pitch with financially muscular clubs like Paris Saint Germain and Monaco leading the way. Its effects though are bound to hit the corridors of the rich European powerhouses from Madrid to Manchester to London.

Monaco though won’t be part of the European Competition this season, after coming up from the relegation ladder. Being backed by fertilizer billionaire Dmitry Rybolovlev, Monaco splurged millions in getting some of the best players in Europe. Their overall spending spree in the transfer market has touched €147million.  Along with that Monaco is a tax free state which is the reason why the likes of Radamel Falcao, Jao Moutinho and co opted to move to this princely state inspite of having lucrative offers from other top clubs of Europe.

However this incentive enjoyed by Monaco seems to be threatened by the new ruling of the French Football League (LFP) announced in March this year. LFP ruled that all clubs participating in its competitions must be based in France for fiscal reasons by the end of the 2013-14 season or potentially face exclusion.

Being a sovereign state Monaco has been playing in the French League since 1919. After the French-Monaco tax convention of 1963 the principality offered tax-free status for foreign and Monégasque nationals. Since the last fifty years Monaco has enjoyed this advantage over its rivals who are based in France.  However now with the revised rules, Monaco would be losing out on its comparative advantage .

But even the LFP were forced to come up with this rule after the French Government proposed a 75% tax rate on millionaire players plying their trade in Ligue 1. Many believe that this move could be detrimental to French football which has been lagging behind clubs from England, Spain, Italy and Germany for a long time. What French clubs require today is huge investment which has seen clubs like PSG and Monaco get in the best players across the globe. I am not sure how good the French economy would do with the proposed tax hike but what I can say for sure is that it would definitely lead to the "death of French football".