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Pressure mounts on EU to kick UAE, Qatari money out of football

Pressure mounts on EU to kick UAE, Qatari money out of football

by host

BRUSSELS — Pressure is growing on the European Union to prevent Gulf money from creating an uneven playing field for the European football clubs left out of the petrodollar bonanza.

The ownership of European football teams by Gulf high-rollers Qatar and the United Arab Emirates is being scrutinized by the European Commission after separate complaints were lodged by Spain’s football league and a tiny Belgian football club.

The aggrieved Spanish and Belgians are attempting to use a brand new piece of EU legislation — the foreign subsidies regulation — to squeeze the petromonarchies, which they argue are distorting the single market by providing state subsidies to Gulf-owned European teams.

The new rules allow the EU to investigate foreign government aid that unfairly undermines European rivals. Regulators can order companies to take steps which could mean repaying the aid or selling off assets.

The complaints allege that Gulf state-owned clubs inflate transfer fees and player salaries, which then distort both domestic and continental competitions by throttling competitors up and down the European football pyramid.

Under Margrethe Vestager’s leadership, the Commission’s competition department has been largely unwilling to intervene in sports cases. The EU, meanwhile, is currently attempting to keep onside with the fossil fuel-producing Gulf countries, thanks to a continental energy crisis triggered by Russian President Vladimir Putin’s war in Ukraine. The dossier will now fall to Vestager’s temporary successor, Belgium’s Didier Reynders, who replaced her on Tuesday.

Anger is building in multiple quarters, as Saudi Arabia also moves to become the latest Gulf power to establish a footprint in the sport — buying England’s Newcastle United and being mooted to add a European team to its stable. Complaints regarding U.K. clubs are also being assessed in Brussels.

After more than a decade of Gulf money pouring into European football and disrupting traditional powerhouse teams, Spanish football authorities have launched a salvo in response.

Last month, Spain’s La Liga wrote to the European Commission asking it to look into Qatar Sports Investments’ ownership of French giant Paris Saint-Germain. In a statement, La Liga said PSG receives subsidies from Doha which allow it to “sign top players and coaches well above its potential in a normal market situation.”

“It is also able to secure sponsorship income which does not correspond to market values,” the Spanish league added. “This enables them to boost their sporting performance, as well as affecting the ability of rival clubs to recruit.” PSG did not comment on the accusations.

There is no official complaint mechanism as part of the foreign subsidies regulation, meaning that all the aggrieved clubs and leagues can do is to draw the Commission’s attention to the foreign funds and hope to find a sympathetic ear. 

In a separate case, Virton — a tiny provincial club from a rural corner of southern Belgium — has complained about Abu Dhabi’s ownership of the global City Football Group, which in Europe includes France’s Troyes, Belgium’s Lommel and the Continent’s current top team, Manchester City.

Virton’s players pictured at the start of a soccer match between KMSK Deinze and RE Virton | Virginie Lefour/Belga Mag/AFP via Getty Images

Virton’s case highlights what will be one of the key points of contention in enforcing the foreign subsidies regulation when it comes to football. The new EU rules apply to state subsidies, while City Football Group would argue their money is private and not directly from the UAE government — much like the American greenbacks and oligarchic Russian rubles which have influenced European football for far longer. 

In June, Vestager noted that the Commission’s team working on foreign subsidies is understaffed, which raises questions on whether they have the resources available to carry out a full investigation.

For now, they are on the case, raising hopes in Madrid and Virton, and eyebrows in Doha and Abu Dhabi. 

“We can confirm receipt of third-party submissions regarding football clubs, including U.K. clubs, which we are assessing,” said Commission spokesperson Arianna Podestà.

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