Neymar: Qatari LNG money creates ‘financial doping’ scandal in football
Monday, Aug 07, 2017
Qatar-backed football deal highlights embattled Doha’s soft diplomacy push, writes Ian Simm

 

The world of sport was rocked last week by the news that French football club Paris St-Germain (PSG) acquired Brazilian player Neymar from FC Barcelona for a world record 220 million euros (US$260 million). The figure is more than double that of the next highest on the all-time list.

Outrage has unsurprisingly ensued from fans and commentators around the world, adamant that no player is worth so much. However, there is a distinctly political tone to the move. The Parisian club is owned by Oryx Qatar Sports Investments (QSI), a Doha-backed fund that is dedicated to investing in sport. QSI’s chairman and CEO, Nasser Al-Khelaifi, is known to be close to Qatari emir, Sheikh Tamim bin Hamad Al-Thani, who appointed him Minister without Portfolio in the Qatari government in 2011.

The move comes as part of Doha’s expensive and long-standing soft diplomacy push, which has seen billions of dollars spent to acquire London’s Harrods Department Store, a stake in New York City’s Empire State Building, Miramax Studios, Valentino Fashion Group and a string of famous paintings.

This effort has been reinvigorated by its ongoing crisis with neighbours Bahrain, Saudi Arabia and the UAE as well as Egypt, surrounding the accusations of terrorist support.

Qatar’s one land border, with Saudi, has been closed and shipping and air transit routes have needed altered as the Riyadh-led group tests Doha’s resolve. It has however, stood firm, denying all allegations and importing food and products from further afield.

Meanwhile, the race is on to build infrastructure and stadiums ahead of hosting the 2022 FIFA World Cup, and with its image having already suffered amid fears about labour conditions, the Neymar deal presents a PR opportunity for PSG’s backers to improve Qatar’s ‘brand’ by aligning with the fresh-faced superstar.

However, Javier Tebas, president of the governing body of Spain’s top football league – La Liga – has accused PSG of ‘financial doping’, flying in the face of the Financial Fair Play (FFP) regulations, which seek to stop clubs spending more than they earn. There are of course exceptions to this, but the rules were introduced to set a level playing field, and in this case, they appear to fall short.

With the deal now done, Barcelona and La Liga will presumably appeal to European football’s governing body, UEFA, which may impose a fine on PSG. Its Qatari owners though, have deep pockets and this is unlikely to be cause for concern. However, UEFA could also ban PSG from European competition, which, considering its current situation and its World Cup preparations would cause real embarrassment for Doha.

Relations

In addition to footballers, France also relies on Qatar for imports of LNG, with total cargoes reaching a 6-year high of 1.4 bcm in May this year. In 2016, France made up 0.6% of Qatar’s LNG export market at 0.49 million tonnes per year.

Despite the crisis in the Gulf, ties between France and Qatar appear to have grown stronger as the pair reciprocate in soft diplomacy, both state and private.

French President Emmanuel Macron voiced his approval of the Neymar deal, telling journalists on August 3: “It adds attractiveness. Yes, it’s good news.”

He spoke during a visit to a holiday centre for children outside Paris, which was also attended by Al-Khelaifi, to whom he said: “Congratulations, I believe there has been good news.”

Meanwhile, French budget minister Gerald Darmanin said he would be “delighted at the taxes that he will be able to pay in France.” He told France Inter radio: “It’s better for this player to pay his taxes in France rather than pay them elsewhere.”

Total pragmatism

Such comments should come as little surprise given that French super-major Total has been vocal about its commitment to its developments in Qatar in the wake of the regional conflict.

The firm is heavily involved in multi-billion dollar projects throughout the Gulf and is keen to keep business and politics separate. The company’s pragmatism was outlined by CEO Patrick Pouyanne in early July, when he said: “I am Qatari in Qatar, Emirati in the Emirates, Iranian in Iran, that’s our philosophy. I don’t have to choose between the countries.”

This approach has clearly paid off. In the UAE, it was awarded a 10% stake in the Abu Dhabi Company for Onshore Petroleum Operations (ADCO) concession, paying around US$2.2 billion in signing fees in 2015. The firm also holds several other key positions, including a 24.5% share in the Dolphin Pipeline, which transports gas from Qatar to the UAE and on to Oman.

In Iran, Total recently secured a role in the development of Phase 11 of South Pars, the world’s largest gas field, following that deal with an agreement to invest US$2 billion to build three petrochemical plants.

Most importantly in this context is the deal it concluded with Qatar in June, securing a 30% stake in Qatar’s largest oilfield, Al-Shaheen, and creating a 70:30 joint venture – North Oil Co. (NOC) – led by Qatar Petroleum (QP).

In addition to ousting Maersk Oil, the incumbent operator of 24 years, Total defeated competition from several other IOCs. Presumably key to this was Pouyanne’s pledge to invest more than US$2 billion during the first five years of the agreement “in order to integrate technology”.

Posturing


Despite Total being an independent company, it is highly political in France and is treated in some quarters as if it were an NOC. As such, the firm’s fortunes will remain of significant interest to the state, and hopes for future Qatari hydrocarbons production and export deals may rest on the strength of ties between the two countries.

Not all French comments about the latest stunt have been so supportive though, with government spokesman Christophe Castaner saying the Neymar transfer was “a communications operation [by Qatar] in order to assert itself on the international scene in the wake of the blockade.”

Castaner told LCI radio: “Qatar is trying to promote itself as an elite destination … That said, it must still be transparent over any support for extremism.”

Meanwhile, the head of the French Institute for International and Strategic Affairs, Pascal Boniface, said that Doha was using the widely-publicised move to demonstrate that it had not been isolated by the blockade and that it remains an significant international player.

“Qatar is sending a very strong signal to its estranged Gulf neighbours. It’s a soft power stunt. Qatari officials want to the world to know that Qatar remains a free and influential country, despite the boycott,” he told Europe 1 radio.

The Brazilian athlete may not be fully aware of the geopolitical circumstances surrounding his move, but he will certainly feel the benefit of the untold riches from Qatar’s world-leading LNG sector as he cashes weekly cheques for 600,000 euros (US$707,000) after tax.

Ironically though, while he was ‘bought’ by Qatar, when he plays his first match for PSG, a quirk of sponsorship will see Neymar wearing a shirt emblazoned with ‘Fly Emirates’, the slogan of Dubai-based airline Emirates.


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