Ligue 1 braces for another financial crisis

By: Xavier | October 31st, 2009

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Gervais Martel addresses the National Assembly

Dark clouds are moving over the French footballing world clocked in the guise of fiscal reform. This Thursday, the French National Assembly voted by 91 votes to 22 for the removal of the right to collective image (DIC) for professional athletes as part of its consideration of a bill funding Social Security in 2010. The DIC, introduced in 2005, authorized professional clubs to be exempt from payroll taxes for up to 30% of player salaries. The purpose was to allow football players a better tax rate in order to attract and retain better talent for Ligue 1.

Football players and other professional athletes in France stand to lose €30 million in tax allowance. Sports Minister Rama Yade, who holds the highest approval rating of any politician in France has attacked the plan as “dangerous” and “harmful to the competitiveness of French sport”.

UMP general secretary Xavier Bertrand has said that with France bidding for the 2016 European championships it was not the time to be penalising players. French football clubs for years could not challenge on a European level because they could not keep native players let alone alone attract foreigners due to France’s tax regime and the DIC had allowed an easing of this to bring in the best players and the results have begun to bear fruit in the Champions League competition of late.

He added: “Football players still contribute €130 million in taxes to the state. This plan makes no economic sense.”

Lens President Gervais Martel, alongside many of his colleagues, launched an impassioned plea at the National Assembley: “This has been done without taking the time to measure all the potential problems! The DIC has improved the situation of French professional sport through a reduction in expenses vis-a-vis other European countries. Contrary to what has been said here, this does nothing to reduce the state coffers. Players have no unfair benefits, they pay their taxes like everyone else! it is the clubs who will be penalized after today. For some, this will represent several million euros.” Lyon president Jean-Michel Aulas, believes that the loss to his club is estimated at around 6 million euros.

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Sports Minister Rama Yade goes to bat for Ligue 1

“Thank you Ms. Bachelot,” said a sarcastic Martel, stating that unlike Sports Minister Rama Yade, Minister Bachelot has not championed the cause of professional sport in France. “We’ll be penalized in terms of financial burdens on the six months remaining. But Lens will not be the most penalized because we have already been forced to reduce our payroll. This is dramatic in a country where we talk about wages, but how soon we forget that professional sport generates returns in prepaid expenses. This is a big setback as professional sport is being sacrificed in the name of demagoguery. Its sad to say but there are many players who will leave after this.”

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Ministers Roselyne Bachelot (left) and Eric Woerth (right) listen intently

But The arguments seemed to be ignored by both Ministers Eric Woerth and Roselyne Bachelot. Secretary of State for Sport Yade, absent from debates in the Assembly, was left alone to defend the DIC. The DIC “has demonstrated its effectiveness since it has helped retain and bring some professional palyers such as Rugby star Sébastien Chabal and footballer Yoann Gourcuff back to France.” Minister Yade said the reforms were “dangerous” and “potentially detrimental to the sustainable competitiveness of French sport”. The former judo star David Douillet, now a UMP deputy from Yvelines, said before his colleagues: “There are 16 million now licensed. You all have constituencies, I leave you alone to judge.”

Trouble indeed is brewing in the French footballing world….