France will soon face a weekend of strike action by the country’s football clubs in protest against a 75 per cent income tax rate.
Angrily condemning the “unfair and discriminatory” tax, Jean-Pierre Louvel, head of the UCPF, the professional football club union, declared on Thursday: “We are talking about the death of French football.”
The unprecedented strike – involving the cancellation of all matches in the final week of November – presents a new challenge for Mr Hollande, the French president, who is suffering from deep unpopularity.
The 75 per cent tax, which will take effect in 2014, will be levied on employers who must pay it for two years on all annual salaries above €1m.
The UCPF insists that the tax will have a devastating effect on French football clubs, which are mostly lossmaking and struggle to compete for players with Spanish, English, German and Italian rivals, despite the recent infusion of vast funds into Paris Saint-Germain and Monaco by deep-pocketed foreign buyers.
The clubs say the tax will cost them collectively €44m a year. They say clubs and their players paid €700m in tax and social contributions last year – more than they earned in television rights.
“We are already the most taxed league in Europe and the other leagues are already much stronger than us,” complained Mr Louvel.
Struggling clubs such as Marseille, Lyon, Lille and Bordeaux, with exposures to the tax of €4m to €8m each, see it as a further hindrance to their ability to compete with PSG and Monaco and foreign rivals.
An LCI-Opinion Way poll on Thursday showed 85 per cent support for taxing the clubs and a similar level of opposition to the strike.
The issue is also clouded by the cases of PSG and Monaco. PSG was bought three years ago by an arm of the Qatar state. PSG will have to pay €20m to meet the tax levy, but its owners have means well beyond most French teams.
Monaco, owned by Dmitry Rybolovlev, the Russian billionaire, and second to PSG in the league, is exempt from the tax as it is based in the low-tax principality, not on French territory. The club spent €170m on transfers in the summer, including €60m on the Colombian striker Radamel Falcao.
Mr Hollande agreed this week to meet football’s leaders next Thursday.
The cancelled games on November 29, 30 and December 1 will be replaced by “open days” at the club grounds. The matches will be rescheduled.
adapted from The Financial Times
