Socialism vs football: will French tax hike kill the game?
Francois Hollande is refusing to back down on new tax on the rich, and footballers are angry
Is socialism about to kill French football? That is the fear as France's footballers prepare to go on strike later this month in protest at the introduction of a new 75 per cent tax rate on earnings above 1m euros.
President Francois Hollande has refused to back down on his plans to introduce the tax, and has ruled out an exemption for football clubs after meeting with anxious clubs, who say that the move will kill the game in France.
Several French league clubs, incluing Paris Saint Germain, have recently acquired rich backers and Ligue 1 is now home to stars such as Zlatan Ibrahimovic and Edinson Cavani, who are paid handsomely for their efforts on the pitch. They are unlikely to take kindly to the new tax rate and there are fears that it could lead to an exodus of players, undermining the league's competitiveness.
The proposed new tax has already prompted the departure of several wealthy French residents, among them actor Gerard Depardieu. However, the 75 per cent tax remains a winner with the voters and the unpopular Hollande needs all the help he can get. The policy was a cornerstone of his election campaign and, after several recent policy reversals, Hollande cannot afford another U-turn.
"The need to sort out public finances fully justifies the effort demanded of businesses that choose to pay high annual salaries," said Hollande after meeting officials from leading clubs on Thursday.
However, the clubs could have a point. The Financial Times notes that with the exception of PSG and Russian-owned Monaco, "French league clubs are mostly relatively small lossmakers struggling to compete for players with Spanish, English, German and Italian rivals".
Their plight is highlighted by the BBC, which explains: "Last season the Ligue 1 clubs registered a combined loss of 108m euros and paid around 700m in social charges and image rights, which was more than they received from the television deals." ·