“The hardest thing in the world to understand is the income tax,” so said a fairly well-known German physicist by the name of Albert Einstein. Clearly if income taxes puzzled one of our great geniuses, more than likely they would cause problems for the average Russian billionaire football club owner.
Taxes are at the center of a current dispute between the French Football League (LFP) and AS Monaco FC. Monaco and the LFP met Thursday in court, arguing over the LFP’s demands that the club’s headquarters to be relocated from the principality of Monaco to France-proper for tax purposes. The move would strip Monaco of their existing tax rights. In particular, the outcome could force Monaco players to pay French income tax of which they are currently exempt. Furthermore, the LFP declares Monaco must pay a staggering 200 million Euros (£168million) to stay in the French Football League.
The ruling should be resolved in the next few weeks. If Monaco is decided against and fails to comply, the recently promoted Ligue 2 champions will be expelled from the LFP. Monaco would therefore be ineligible to participate in Ligue 1 in the 2013/2014 season. And while this is a serious matter for the club, what is more intriguing are the implications these next few weeks could have on the 2014 World Cup.
Since the end of the 2012/2013 season, Monaco has gone on a spending frenzy buying some of the hottest targets in world football. Radamel Falcao, João Moutinho, James Rodríguez and Ricardo Carvalho have all joined the financial giants this summer, with more big names likely to join. This practice of superstar splurging has become commonplace in the footballing world (think Manchester City, Paris St. Germain, Anzhi Makhachkala, etc.). Yet, their recent problems with the LFP makes Monaco’s situation the most maddening of all.
What is outrageous about these transfers is the fact that just a year before the World Cup the players and managers, of the national football federations indirectly involved in these moves, would allow their most prized possessions to sign for a team like Monaco. First of all, Monaco was recently promoted from the second division of the French league to the first, and thus will participate in neither the Champions League nor the Europa League. Taking these tournaments out of the equation eliminates the test they provide, as well as lowers the competitiveness Falcao and company are accustom to.