Jorge Mendes, Mino Raiola, Jonathan Barnett…we often see these names and others associated with the biggest moves in the winter and summer transfer windows. Certain agents have become as known as the players that they represent, yet little is known about their income. Whereas many player salaries across large leagues are public information (or at least reported in the press), the financials of agents were murky until the Football Leaks scandal. Even after the Football Leaks scandal disclosed some of the massive commissions agents and intermediaries made on transfers, including the more than 370 million euros made by agents conducting business in Germany and Britain in 2015 alone, the numbers involving commissions, endorsements, and other agent streams of income are often not publicized. However, we also know that these agents are not working for free. So, how do soccer agents make their money?

Commissions

Commissions are earned when a player moves from one club to another, either on a free transfer or a transfer with a fee. In either instance, the player’s new club pays a fee (“commission”) to the agent for the negotiating and other work the agent performs to get his or her client to sign with the new club. In the case of a free transfer, the agent fee is negotiated with the new club. In cases where the player does not move as a free agent and a transfer fee is paid, the fee is still negotiated with the new club, but the general guideline is that an agent is paid 20-25% of the transfer fee for their services. One of the transfer arrangements detailed in the Football Leaks scandal was Paul Pogba transfer from Juventus to Manchester United. Pogba, represented by Mino Raiola, moved to Manchester United for 89.3 million pounds, which was a world-record at the time. Raiola, his agent, was paid an additional 23 million pounds, slightly over 25% of Pogba’s transfer fee, in agent fees. Raiola was also able to negotiate additional compensation from Manchester United, with the club paying Raiola 3.3 million pounds each year of Pogba’s five-year deal, plus an additional 2.2 million pounds per year to Raiola’s agency. In total, Pogba’s transfer earned Raiola and his agency more than 50 million pounds and, with Pogba’s contract expiring this summer, Raiola looks set to earn another large payday from whatever club, Manchester United or otherwise, that lands Paul Pogba.

Player Salaries

Another stream of income for agents is player salaries. Agents are traditionally paid 5% of each client’s annual salary each year. There are three main ways the agent earns this: 1. The player pays; 2. The club pays; or 3. The player and club each pay a portion. To demonstrate how this works, we’ll look at Ryan Fredricks, right-back for West Ham United. Fredricks makes 40,000 pounds per week, which is an annual salary of 2.08 million pounds per year. Unique Sports Group, one of the largest soccer player representation agencies, earns 5% of that, or 104,000 pounds per year. If the player pays, Fredricks pays Unique Sports Group 104,000 pound each year. If the club pays, West Ham United pays Unique Sports Group 104,000 pounds each year. If both the club and the player pay, both the club and the player pay a negotiated amount to Unique Sports Group totaling 104,000 pounds each year. Agencies have numerous clients, so 5% of each contract can add up to a very large number, but some agents and agencies make a significant amount from one or two players, though they always have numerous clients. For example, Cristiano Ronaldo made approximately 57 million euros gross at Juventus. Ronaldo is represented by GestiFute, an agency started by Jorge Mendes, which represents more than 100 current players. GestiFute, taking a traditional 5% cut, would have made 2.85 million euros per year from just Ronaldo’s contract. But agents don’t just take a cut of the salary, they also take a cut from other earnings.

Endorsements and Sponsorships

Apart from the commissions agents earn from transfers and the amount earned from player salaries, agents also earn money from player endorsement deals. Players receive endorsement offers from all sorts of companies: watch brands, clothing brands, food and beverage brands, sporting brands, etc. Each of these endorsement offers is evaluated by the player and agent, and the agent negotiates the details of the endorsement. In exchange for these services, the agent usually takes 10-15% of the endorsement deal.

Conclusion

Being a soccer agent isn’t necessarily glamorous. Your job involves catering to high-end who are used to having everything done their way, dealing with scandals that clients may become embroiled in, traveling often for negotiations, maintaining relations with clubs, recruiting new clients, and constant accessibility comes with the career. Additionally, the threat of a client being poached by another agent is always present. The industry is difficult to break into and even more cutthroat to stay in. However, for those who manage to navigate the career path and are successful, the above information demonstrates that the career can be very lucrative.

Cristiano Ronaldo, Lionel Messi, Javier Mascherano, Neymar, Adriano Correia Claro, Radamel Falcao…what do these players have in common? Yes, they all played in La Liga. Yes, they all starred for (arguably) the three biggest teams in La Liga: Real Madrid, Barcelona, and Atletico Madrid. And yes, with the exception of Radamel Falcao, they all play in different leagues or are retired now. However, there is a darker commonality that ties these soccer stars together: they have all been convicted of, or pled guilty to, tax evasion in Spanish courts, and they aren’t the only ones. Dozens of players have been accused of, pled guilty to, or have been convicted of tax evasion in Spanish courts and have been sentenced to prison for the offense. Yet these players remain free: Ronaldo moved on to Juventus and then Manchester United, Falcao moved to Monaco and Turkey, Javier Mascherano continued to play for Barcelona before moving to China and retiring in Argentina, and Messi moved to PSG after Barcelona’s financial disaster made his stay at the club impossible. So why do these players remain free after being convicted of such a serious offense?

Spain’s Tax Laws

As previously mentioned in an article discussing Italy’s New Resident Workers Tax scheme, Beckham’s Law is the genesis of this tax evasion issue. The Beckham Law made changes to the Spanish tax code that allowed wealthy foreign workers to reduce their tax burden by exempting income earned outside of Spain and derived from sources other than employment under Spanish tax law. This includes income from investments, passive income streams, and, yes, income from endorsements and sponsorships. The Beckham Law was passed in 2004 and was in effect until 2010, when the Spanish government finally realized that David Beckham hadn’t played for Real Madrid since 2007 and that they were missing out on an enormous amount of tax money from massive endorsement deals.

Either word of the Beckham Law revocation in Spain did not make it to the star players, their lawyers, or their advisors, or they just did not care. Dozens of players were indicted between the 2010 revocation and 2019. In fact, enough people have been convicted to have a full starting eleven, including four Ballon d’Or winners (Ronaldo, Messi, Modric, and Brazilian Ronaldo), and have a Champions League winner manager at the helm (Mourinho).

If all these players are committing tax fraud and evasion, how are they still playing?

Spain’s Penal Code

Players who are convicted or plead guilty remain eligible to play (and not incarcerated) because of Spain suspended sentence guidelines. If a first-time offender is convicted of a crime and sentenced to less than two years in prison, the offender serves a suspended sentence. The suspended sentence means that the offender may remain free and not incarcerated so long as the offender does not re-offend during the suspended sentence time period; however, if the offender re-offends during that period, the offender will be incarcerated by the Spanish government. Regardless of whether the offender re-offends or successfully serves out the suspended sentence, the offender will have a Spanish criminal record.

When looking at this scheme in the context of La Liga players and the sentences for financial crimes, it makes financial sense to attempt to evade Spanish taxes. Crimes like tax fraud in Spain traditionally carry a sentence of less than two years. If the player successfully evades taxes, then the play is able to retain more of their income. If the player is unsuccessful in evading taxes, it is the player’s first offense and the play will be able to serve a suspended sentence, though the player will also likely pay a large fine. These facts are demonstrated in past tax evasion convictions in Spain: Ronaldo was fined $21.8 million and sentenced to a 23-month suspended sentence, Messi was fined $20 million and sentenced to a 21-month suspended sentence, and even Jose Mourinho was fined $2.5 million and sentenced to a one year suspended sentence.

Future Predictions

Will La Liga players continue to attempt to evade taxes in Spain? I believe that is likely, as the benefit of evading taxes in Spain likely outweighs the cost. So far, the potential cost of getting caught is a legal fight, a fine that is a similar amount to the taxes that were avoided, and a suspended sentence that doesn’t require incarceration or any alteration to a La Liga player’s lifestyle. With those minimal consequences, there is no reason for players playing in Spain to change their behavior. With the consequence being the legal equivalent of a slap on the wrist, we can expect La Liga players to continue to evade taxes.

For the last ten years, American soccer fans and MLS officials have voiced aspirations of being competitive with the world’s top leagues. This desire to compete against top leagues can be seen through a number of initiatives, from the MLS vs. Liga MX All-Star games to bringing top talent Europe to the United States, albeit at the end of their careers. However, as long as the MLS continues to impose its own spending restrictions, rather than shifting to more Financial Fair Play style restrictions, the MLS will remain a league that cannot compete with other top leagues, regardless of which player(s) are brought over from Europe.

The MLS Structure

            The MLS financial structure allows for three main spending categories (though there are categories like Supplemental Roster and Homegrown Player): 1. Designated Players; 2. Targeted Allocation Money; and 3. General Allocation Money.

            Similar to how David Beckham’s move to Real Madrid created a new Spanish tax law, Beckham’s desire to play in the MLS created the Designated Player structure. Beckham wanted to play in the United States (specifically, in Los Angeles), but his potential salary made that unlikely, due to salary cap restrictions. Not one to miss a marketing opportunity, the MLS created the “Designated Player” system to allow the LA Galaxy to make Beckham an attractive offer and lure him to the MLS. The Designated Player structure allows a team to use two roster spots (a third may be, and usually is, purchased using General Allocation Money) to sign players to high salaries. Instead of having these full high salaries count against the salary cap, only $612,500 of the salary is counted against the salary cap. For example, Carlos Vela is slotted to make $6.3 million this season with LAFC; however, for salary cap purposes, his salary will only count as $612,500 against the total salary cap allocation. This allows MLS teams to stay within the salary cap while attracting a few top players. Available Designated Player spots may not be traded between teams.

            Targeted Allocation Money is additional money (beyond the General Allocation Money) that a team may use to pay the salary of one or more players whose salaries are above the salary cap budget, but whose salaries are below $1.5 million. One example of the use of Targeted Allocation Money is the Chicago Fire’s signing of Nicolas Gaitan. Gaitan’s team, Dalian Yifang, was willing to let Gaitan go on a free transfer. The Chicago Fire was interested in signing Gaitan, but his salary demands were above the amount of money available in the Fire salary cap. The Fire used the Targeted Allocation Money which, after approximately $500,000, did not count against the salary cap, and were able to sign Gaitan. Gaitan’s base salary was $1.4 million, but he only counted against the salary cap for around $500,000. The amount of Targeted Allocation Money for the 2021 MLS season is $2.8 million per team. Targeted Allocation Money may be traded between teams, so while the aforementioned number is the number set for the 2021 MLS season, a team may acquire more Targeted Allocation Money via a trade.

            General Allocation Money is the money that may be used to reduce the salary cap hit of any other player’s contract. For the 2021 season, each club is allotted $1.525 million in General Allocation Money. However, like Targeted Allocation Money, General Allocation Money can be traded between teams, so teams may add to or subtract from this number.

            The final important number is the salary cap. The salary cap for the 2021 MLS season is $4.9 million.

Why the Numbers Matter

            I’m sure many of you, for those of you who have made it this far, are thinking to yourselves “great, you just told us a bunch of numbers. Who cares?” The aforementioned numbers are the budgets that the teams must stay within for salary expenses for the 2021 MLS season. While there is some variability due to the ability to trade Targeted Allocation Money and General Allocation Money, the total spending ability for each team comes out to around $9 million excluding the Designated Player salaries. Even if Designated Player salaries are added in to a team’s spending, the maximum amount that teams are spending is $15-$20 million.

How Far Does $15-20 Million Go In Top Soccer

            So, the MLS structure allows (restricts) teams to spend $15-20 million in player salaries. While this is a lot of money to the average person, but in terms of world soccer, it’s not even a drop in the bucket. Let’s compare that number to the numbers we see in the other Big Five Leagues. In the Premier League, Norwich City is currently at the bottom of the table. Currently, Norwich is spending more than 24 million pounds (~$32 million) on player salaries and that does not include the salaries of many recently acquired players, including Josh Sargent and Milot Rashica. When adding those salaries in there, Norwich is more than doubling, and likely tripling, the player salary budgets of MLS teams. Manchester United alone have 7 players (Ronaldo, De Gea, Sancho, Varane, Pogba, Cavani, and Martial) who each make more each season than most MLS clubs spend on player salaries.

            Looking at Ligue 1, the MLS teams are much more competitive. The team at the bottom of the Ligue 1 table, St. Etienne, are estimated to spend around $27 million on player salaries each year. While that’s a bit higher than MLS teams, the team sitting second from the bottom (19^th place) is FC Metz. The team from eastern France spends approximately $14 million per year on player salaries, meaning that the MLS salary structure is fairly similar to the salary structure of a team that is likely to be relegated from Ligue 1 after this season.

            In La Liga, a salary cap is imposed on each team based on where the team finished in the table the previous season. This cap has been significantly reduced due to the COVID-19 pandemic, but even so, the smallest teams are still able to outspend MLS teams. In the 2020/2021 season, the smallest La Liga salary cap was 34 million euros (~$40 million). The smallest cap in the Spanish top flight was more than double what MLS clubs spend on salaries. In Germany, certain notoriously frugal Bundesliga teams (FC Augsburg, Union Berlin) have salary budgets similar to the top-spending MLS teams, but those teams don’t compete against top clubs for titles, they simply fight to avoid relegation each season.

            And finally, Serie A in Italy, where there are now 7 American owners of clubs after the Genoa acquisition by 777 Partners. During the 2020/2021 season, the two teams that spent the least amount of money on player salaries in Serie A were Crotone and Spezia, who spent 23 million euros and 22 million euros, respectively. However, those number are net, post-tax salary numbers, so realistically, the teams probably spent approximately 35-40 million euros ($40-45 million) on player salaries.

            All of that was a very long way of saying MLS teams are not only not competitive with top European leagues when it comes to player salaries, but teams are not even or barely financially competitive with the teams at the bottom of the table in the Big Five leagues.

The Solution

            The solution to this issue should be fairly obvious: if the MLS wants to be competitive with the top European leagues, it needs to allow teams to spend like top European leagues. A salary cap of $4.9 million may not even cover the wages of the Barcelona B team for a season, let alone compete with top tier professional teams. The MLS needs to implement a new, updated system to allow teams to spend more on player salaries. I have been critical of UEFA’s Financial Fair Play system in the past, and I remain critical, but even that system is preferable to an antiquated salary cap structure that is pathetically low at $4.9 million.

            The MLS salary structure is hamstringing teams, and if the MLS really wants to be globally competitive, it will institute reforms that allow for further spending. That spending will attract talented young players, increase the overall level of play within the league, and move the MLS one step closer to being a top league in the world.

Italy’s Serie A had some incredible stars playing in the league last season. From Cristiano Ronaldo to Romelu Lukaku to Zlatan Ibrahimovic to Diego Godin, Italian soccer has recently attracted major talents from outside leagues. Five years ago, attracting talents from outside leagues was an issue. Serie A teams were consistently losing players and transfer battles to teams in the Premier League, La Liga, Bundesliga, and even Ligue 1 in some cases. The Italian Soccer Federation, Serie A, and the Italian government were all looking at possible solutions to this issue and decided to implement a new tax scheme. Though the new resident worker tax applies to all new resident workers, the tax scheme was created and implemented with soccer players and, more importantly, soccer clubs in mind.

The Issue: Serie A, Broadcast Rights, and Spending

The spending, transfer fees, and wage issues all goes back to income earned by broadcast rights. Of all categories involved in the actual viewing of a soccer match, broadcast rights is by far the most lucrative for soccer clubs; in fact, for many soccer clubs, broadcast rights is the most profitable category on their financial statements. These broadcast rights are negotiated by the overarching organization (English Premier League, La Liga, etc.), and teams financially benefit from these negotiated rights, typically on a prorated basis depending on where the team finished in the league table the previous season.

In the 2020/2021 Serie A season, Inter Milan were crowned champions, followed by AC Milan, Atalanta, and Juventus. When considering the money earned from the Coppa Italia (domestic cup), the TV rights revenue is as follows: Inter Milan – 65 million euros, Juventus – 62.7 million euros, AC Milan – 57.8 million euros. By contrast, Sheffield United, who finished at the bottom of the Premier League and were relegated, earned 105.6 million euros from TV rights during 2020/2021 Premier League season. Obviously, this is a huge disparity in income; in fact, according to Financial Fair Play Rules, without a change in tax structure, relegated Sheffield United could be able to spend more money than Serie A champions Inter Milan.

While the Premier League earns the most money from TV rights of the big five leagues each season, the Premier League is not the only league whose earnings far outpace Serie A. During the 2019/2020 season, Barcelona and Real Madrid each earned 165million euros and 156 million euros, respectively. During the 2020/2021 Bundesliga season, Bayern Munich earned 105 million euros, followed by Borussia Dortmund, who earned 95 million euros. In fact, the average TV rights income for Bundesliga clubs was around 80 million euros, nearly 20% more than what the Serie A champions earned. The only league of the big five that is within the same ballpark as Serie A is Ligue 1, but that represents its own challenges. While PSG earned around 60 million euros during their 2019/2020 Ligue 1 title winning season, PSG is also owned by a subsidiary of a sovereign wealth fund worth 300 billion euros; they have plenty of money to spend without TV rights. Other Ligue 1 team owners include Luxembourg investment vehicles, the former owner of the Los Angeles Dodgers, billionaires of Russian, Swiss, and French citizenship, and others with massive fortunes. All this is to say that while Ligue 1 teams may earn comparable TV rights income to Serie A teams, Ligue 1 owners do not need to rely on TV rights income. Additionally, not to disparage teams in Ligue 1 (outside of PSG), but Inter Milan is looking to compete against teams like Chelsea, Bayern Munich, and Barcelona, not Dijon and Angers.

The Italian government decided that to allow Serie A teams remain competitive, they would pass a new tax law that, among other people, benefitted Serie A clubs: the New Resident Workers Tax.

What is the New Resident Workers Tax?

The New Residents Workers Tax allows workers who move to Italy from another country to receive a tax exemption for 50% of their salary. There are three elements that must be met to qualify for this 50% tax exemption: 1) the worker has not been a resident in Italy for the preceding two tax years; 2) the worker maintains an Italian tax residence for at least 2 tax years following the move; and 3) the majority of the worker’s work will occur in Italy (i.e. at least 183 days of work in Italy each tax year). Additionally, the law explicitly states that athletes, along with other entertainers (artists, performers, etc.), are eligible for the 50% tax exemption.

Implications for Serie A Teams

The implications regarding this workers tax and Serie A clubs is enormous. Soccer players see a net wage in their wage packet. That is the wage that is contractually owed to the player after taxes. The wage that the club is responsible for paying is the gross wage, meaning the pre-tax wage. The key effect that this workers law has is on the amount that the club must pay in taxes before the player receives a paycheck with the net wage. Let’s look at the highest paid player in Serie A during the 2020/2021 season as an example, Cristiano Ronaldo (now with Manchester United). During the 2020/2021 season, Cristiano Ronaldo’s net salary was 31 million euros. Under a normal, pre-New Resident Workers Tax scheme, Ronaldo tax rate would be approximately 45% when national and regional taxes are taken into account. This means that in order for Cristiano Ronaldo to earn 31 million euros net during the season, Juventus would need to pay Ronaldo more than 56 million euros gross. However, under the new tax scheme, Juventus, in order to pay Ronaldo the 31 million euros net, only needs to pay Ronaldo 40 million euros gross, saving the club 16 million euros in wages on one player alone. Frankly, without the New Resident Workers Tax, it may not have been possible for Juventus to pay Ronaldo’s transfer fee, his wages, and still be compliant with Financial Fair Play requirements. To put it another way, this tax allows all Serie A clubs to sign players who have not played in Serie A over the past two years and save a significant amount of money on taxes that would otherwise be owed.

This New Resident Workers Tax scheme also indirectly benefits teams in another way: merchandising. By being able to attract new star players, the teams are able to sell more jersey, memorabilia, and other team items bearing the new star player’s name. Ronaldo, Lukaku, De Ligt, Osimhen…teams have taken advantage of the new tax scheme to be able to save on the player’s wages while profiting for new jersey sales and merchandise. Lukaku: 4 million euros per year saved by Inter Milan; De Ligt: 4.25 million euros saved by Juventus; Osimhen: more than 2.25 million euros saved by Napoli, all while profiting off of fans buying new Lukaku, De Ligt, Osimhen, and, of course, Ronaldo jerseys.

In short, this New Resident Workers Tax scheme benefits the bottom line of all Serie A clubs.

Foreign Competition and Conclusion

Other major European clubs and leagues make far more money from broadcast rights, sponsorships, and other streams of income than the clubs in Serie A. In order to remain competitive and attract top level soccer talent, Italy changed the tax code to benefit clubs signing overseas players. While the tax code is new and amounts to a huge tax savings for clubs, Italy is not the first country to do this. Spain passed a tax law whereby wealthy foreigners living in Spain were only required to pay tax on Spanish income and assets, but did not have to pay tax on income and assets that were not generated or located in Spain. This law was nicknamed the “Beckham Law,” as David Beckham was one of the first foreigners to take advantage of the law. Indeed, it has been posited that the Spanish law was passed in order to lure David Beckham to Real Madrid and that, without the law, Beckham would not have signed for Real Madrid. There are two important lessons that we can take from the Beckham Law and the New Resident Workers Tax: 1. Other countries may be willing to become “tax competitive” to attract soccer talent; and 2. What may happen to the New Resident Workers Tax scheme in the long-term.

First, regarding tax competitiveness, any other sovereign country is welcome to pass a tax law in order to attract talent. Countries may pass a law reducing or eliminating all taxes, income or otherwise, on professional athletes. One team, which is located in a sovereign principality, already does not need to pay any tax on players’ wages to the governing body: AS Monaco. Monaco does not have a personal income tax, and this advantageous structure has been a source of great debate in Ligue 1, with some teams arguing that Monaco pay a fee to Ligue 1 equivalent to the tax that they would owe if Monaco had the same tax laws as France, and other teams arguing that France should pass a law eliminating income tax on professional athlete wages. Another country, Spain, passed the aforementioned Beckham Law. While political and socioeconomic dynamics may make a tax competitive option unrealistic, it is nonetheless a potential way to attract foreign talent. There are also a number of potential effects of competing taxations schemes, include the “race to the bottom” issue, but those issues are too numerous and lengthy to be addressed here.

Second, what may happen to the New Resident Workers Tax scheme in the long-term. There is only one modern precedent for a soccer-centric tax scheme (though many players have attempted to evade taxes and been caught): The so-called Beckham Law. After approximately six years and numerous proposed and actual changes, the Beckham Law was functionally revoked. Foreigner who were Spanish tax residents would be taxed on income and assets earned both within and outside of Spain. In fact, Spain recently instituted wealth tax. Notably, residents of the Madrid region (including Spanish politicians) do not have to pay this wealth tax.

So, what does the future hold for the New Resident Workers Tax? The future is unknown. However, in the present, the tax scheme will continue to attract foreign soccer stars and keep Serie A club competitive despite the broadcast rights income disparity across the big five leagues.

Premier League

Chelsea @ Tottenham (-0.5, -1; -112)

Chelsea has had a great start to the season and plans to continue its undefeated run this weekend. Lukaku has been in-form up front, the team has had strong wing play, the midfield has rotated nicely to ensure fresh legs for Jorginho, Kante, and Kovacic, and the backline has only conceded one goal so far. Tottenham have also looked decent this season, but Harry Kane has been struggling to find the net for the Hotspurs. Chelsea has a solid backline, a more talented midfield, and the in-form striker, so I’m going with Chelsea.

Serie A

Lazio v. Cagliari (-1; -105)

Lazio is coming off of a disappointing loss at Galatasaray to start the Europa League group stage. However, Lazio did not play its traditional starting eleven lineup, with Milinkovic-Savic, Pedro, and Radu all starting the game on the bench. This likely means that these three difference makers, along with Ciro Immobile, Felipe Anderson, and Luis Alberto (who were all subbed off), will be available to play the full 90 minutes on Sunday. Cagliari, on the other hand, have had a rough start to the season, with two losses and a draw (against Spezia), Cagliari appear to be able to score goals, but seem to be unable to stop opponents from scoring. In their most recent match against Genoa, Genoa scored three goals on three shots on goal. In a matchup of Lazio’s high-powered offense and Cagliari’s woeful defense, I’m favoring Lazio.

Roma @ Hellas Verona (-0.5; -122)

Roma is top of the table and is having an outstanding start to the season. Tammy Abraham has fit in well to the starting eleven, Jordan Veretout has been in excellent form, and Pellegrini has been spectacular so far. With three wins in three games, Roma looks great. Hellas…doesn’t look so great. They’ve started the season with three losses, and there is nothing to indicate that this current form will change. Teams have been able to score on Hellas, and I expect Roma to continue that scoring this weekend.

Bundesliga

Borussia Monchengladbach @ Augsburg (-0.5; -118)

After a great start to the season with a draw against Bayern, things at Monchengladbach have gotten off track. An absolute drubbing against Leverkusen, a loss to Union Berlin, the Marcus Thuram injury…things didn’t look great. However, last weekend against Arminia, Monchengladbach reminded all of us that even without Thuram, they are still a talented team. Zakaria, Neuhaus, Stindl, Hoffman…these players should provide enough to carry the team while Thuram is out, and should be enough to beat Augsburg this weekend. Augsburg, however is doing what Augsburg normally does, which is spend as little as possible while still fielding a semi-competitive Bundesliga team, sit toward the bottom of the table for most of the season, get a couple key wins to bring them above the relegation zone, survive to fight another year, and repeat the cycle next season in Bundesliga. While Thuram is injured, I expect Monchengladbach to be able to take care of Augsburg.

As top teams prepare to shift to playing both league and European competitions (starting September 15), fans may be interested to know what teams are in which Europa League groups and how the groups may breakdown. I can’t do a Champions League Predictions preview and leave out the other major European tournament (the Europa Conference League is a money grab and I will not support that). Below is an analysis of the makeup of each group, which teams had the luck of the draw on their side, and how the group phase may play out:

Group A: Brondby, Lyon, Rangers, Sparta Prague

Lyon is the team with the most spending power in this group and also happens to be the strongest team in this group by a wide margin. Moussa Dembele, who recently returned from loan, has started the season with 3 goals in 4 games. Lyon also had a good balance of experienced players with young players. Youngsters like Cherki, Caqueret, Aouar, and Diomande can learn from more experienced players like Slimani, Lopes, Shaqiri, and Mendes   during European play. This balance of youth and experience should help Lyon rotate players to keep fresh legs throughout both the Ligue 1 and Europa League campaign. Beyond Lyon, the second knockout round spot should be a battle between Sparta Prague and Rangers. Sparta Prague managed to retain Adam Hlozek this summer, and he is likely to start up top, but Rangers is a much more rounded team, with Morelos, Hagi, Kent, and Kamara all expected to be contributors. While Brondby has shown an ability to compete in the Danish League, it is unlikely that they will be able to consistently compete with the teams in this group; however, Brondby could always play spoiler at home and steal a point or three points that may be vital to another team’s advancement to the knockout round. Without that spoiler, however, Lyon and Rangers should advance to the knockout, while Sparta Prague and Brondby are out.

Group B: Monaco, PSV Eindhoven, Real Sociedad, SK Sturm Graz

SK Sturm Graz was unlucky and got drawn into a group with three very talented teams. It looks like the group stage may be the end of the Europa League Road for Sturm Graz. That leaves two spots for the knockout round and three teams: PSV, Real Sociedad, and Monaco. PSV may be the most interesting of those three teams, possessing a nice balance between important youth contributors like Madueke, Sangare, and Teze and experienced players like Carlos Vinicius, Bruma, and World Cup winner Mario Gotze. In the qualifying stage, PSV showed an ability to get forward and put pressure on an opposing back-line, but also showed that they were vulnerable with their own back-line and susceptible to counterattacks. Real Sociedad may be the most talented team in this group. Oyarzabal, Merino, Sorloth, and Isak are all full internationals, in good form, and should provide the offensive firepower that Real Sociedad needs to advance to the knockout round. I was very high on AS Monaco early this season. I liked the development of Badiashile and Tchouameni and was very impressed by the signing of Myron Boadu. So far, however, my high expectations have not been met, and Monaco sits in 14^th place. Monaco still has the talent and time to turn it around, but as of right now, their form is not that of a team that will advance to the Europa League knockout rounds. Real Sociedad and PSV advance, Monaco and SK Sturm Graz are out.

Group C: Legia Warsaw, Leicester City, Napoli, Spartak Moscow

Legia Warsaw has a few players who have played for Big Five leagues during their career, but overall, Legia just doesn’t have the roster talent to compete with the other teams in this group. Therefore, the teams that advance will be two of these three: Leicester City, Napoli, Spartak Moscow. Leicester City has been a bit disappointing to start the season. They have tallied two unconvincing wins against Wolverhampton Wolves and Norwich City, but they lost heavily to fellow Europa League team West Ham (4-1). Leicester has some top class talent, and I would be more confident to send them on to the knockout stage if they had demonstrated some decent form, but that has yet to be seen. Napoli has had a significant amount of player turnover in recent years, but has managed to hang on to three key stars (at least for this season): Dries Mertens, Kalidou Koulibaly, and Lorenzo Insigne. These three leaders, supported by Fabian Ruiz, Diego Demme, and Piotr Zielinski, should possess enough talent to get Napoli through this group and into the knockout stages. Napoli’s fifth place in Serie A form should also help the southern Italian team, although they were recently dismantled by Benevento in a club friendly, losing 5-1. Spartak Moscow is a team right up there with Leicester in terms of disappointing form. Spartak has been wildly inconsistent in league play, finding themselves in 10^th place in a league that they should be (mostly) dominating. On top of that, Spartak was entirely unconvincing in their aggregate 4-0 defeat to Benfica in the Champions League qualifying round. Gigot, Larsson, and Victor Moses all have some quality to them, but it’s likely not enough to get Spartak through to the knockout rounds. Napoli and Leceister advance, Spartak and Legia are out.

Group D: Antwerp, Eintracht Frankfurt, Fenerbahce, Olympiacos

This group might actually be the most unpredictable/unstable group in Europa League. Frankfurt is struggling without Andre Silva and Luka Jovic, despite the addition of Rafael Santos Borre; Fenerbahce added Uruguayan Diego Rossi on loan, but Mesut Ozil is allegedly unhappy due to playing time and injuries, so that locker room or the locker room leadership could be tumultuous; Olympiacos has inconsistent attacking play, but is always a difficult team to play in European competition; and Antwerp recently acquired some exceptionally talented players, including Johannes Eggestein, Victor Fischer, and former national team star Radja Nainggolan. Eintracht is probably still the most talented team in the group overall, but any of these four teams could advance to the knockout stages or could be out. Given that unpredictability, I have Eintracht Frankfurt and Antwerp going through to the knockout stage, and Fenerbahce and Olympiacos out.

Group E: Galatasaray, Lazio, Lokomotiv Moscow, Marseille

Let’s get the obvious out of the way: Lazio is the most talented team in this group and is miles ahead of whichever team is second (probably Marseille). Lazio has lethal attacking play (Immobile, Luis Alberto), a talented midfield led by an elite midfielder (Milinkovic-Savic), and a strong and experienced backline (Radu, Patric, Acerbi). The next most talented team in this group is likely Olympique de Marseille, whose summer window I was actually very impressed with. Gerson, Harit, and Under are all good attacking midfield options, Milik is a great attacking option, and Saliba and Lirola are both talented young defenders. Galatasaray and Lokomotiv Moscow both have some talent (Babel and Muslera; Miranchuk and Smolov, respectively), but the talent between Lazio and Marseille will likely triumph over the Turks and Russians. Lazio and Marseille through to the knockout round, Galatasaray and Lokomotiv Moscow out.

Group F: Ludogorets, Midtjylland, Red Star Belgrade, Braga

If there was a “weakest group” in the Europa League draw, this would be it. Having not seen two of these teams play, I’ll just offer a couple of insights and keep this section short. Ludogorets, despite being significantly out-spent, has had some recent success in Europa League play, making it out of the group stage in the 2019/2020 competition. Midtjylland may exhibit some exciting attacking play, with Pione Sisto and Evander expected to feature heavily. Red Star Belgrade features La Liga and MLS player Aleksandar Katai, former Serie A player Filippo Falco, and Canadian goalkeeper Milan Borjan starring for the squad. Rajko Mitic Stadium is also one of the most difficult stadiums for an away team to play in throughout Europe, so home games should be advantageous for Red Star. Braga has some significant attacking talent, with Abel Ruiz, Lucas Piazon, and the Horta brothers (Ricardo and Andre) expected to contribute to the attack. Additionally, Braga managed to secure some talented players on loan, including up-and-coming defensive star Diogo Leite and midfield stalwart Chiquinho. In the end, I have Braga and Midtjylland going through, with Ludogorets and Red Star Belgrade out, but this is really any team’s group and anything can happen.

Group G: Bayer Leverkusen, Celtic, Ferencvaros, Real Betis

Leverkusen’s first Europa League game will be against Ferencvaros and on the heels of a big match against Dortmund the weekend before. That being said, Leverkusen is the most talented team in this group. Leverkusen is loaded with young talent, particularly in the midfield, and strong play from those young players will be a must to end up top of the group. Leverkusen will also need veteran leadership from Aranguiz, Demirbay, and Alario to be successful, as well as an in form Patrik Schick up top. Betis, though probably not as talented, should also challenge for top of the table in this group. Unlike Leverkusen, most of Betis’ talent also possesses significant European or international experience. Fekir, Bartra, Guardado, and 40-year-old Joaquin all have high level European or World Cup experience, which will be an asset to the team, along with their leadership skills. Celtic was in decent shape to do well in this group until August 31, when star striker, Odsonne Edouard, was sold to Crystal Palace. Without a comparable replacement, Celtic may find goals difficult to come by. Ferencvaros may be competitive in NB I in Hungary, and have a history of being a tough opponent in European competition, but they don’t appear to have the talent to compete with the likes of Leverkusen and Betis. Bayer Leverkusen and Real Betis should advance to the knockout round, with Celtic and Ferencvaros out.

Group H: Dinamo Zagreb, Genk, Rapid Wien, West Ham

West Ham have kept their great form from last season going (minus a draw against Crystal Palace), and should be the favorites to win the group. After rumors during the transfer window didn’t come to fruition, West Ham had a frantic but successful conclusion to the summer transfer window, acquiring Alex Kral to strengthen the defensive midfield and Nikola Vlasic to slot into the attacking midfield spot left empty by Jesse Lingard. With newly acquired Kurt Zouma in the back-line and Tomas Soucek still in form, Declan Rice and crew should be able to finish top of the table in this group. Any of the other three teams in this group could be the other team to qualify for the knockout round. Rapid Wien is a solid side, but without Yusuf Demir (on loan at Barcelona) in a forward/attacking midfield role, the team may lack some creativity necessary in the attacking half. Genk is a good team with experience up top (Paul Onuachu), but has an inexperienced back-line and a 19-year-old goalkeeper who, while an outstanding talent who should go on to achieve great success, does not have any senior international or significant European experience, making him potentially prone to mistakes. Dinamo Zagreb is a team who has acquired experience over the last 12 months (Ristovski and Misic), has a goalkeeper with international experience, and has a big, experienced striker up top in Bruno Petkovic. Because Dinamo Zagreb is probably the second-best team in this group, West Ham and Dinamo should go through to the knockout rounds, with Genk and Rapid Wien out.

Angel Correa has been nothing short of phenomenal for Atletico Madrid in this first month. In three games with the club, he has three goals and an assist, with a total goal participation rate of 80% on the season. Additionally, the timing of his goals has been crucial: he opened the scoring and then gave Atletico lead again in the season opener against Celta Vigo, and he scored the game-winner against Elche the next weekend. On the national side, fans were excited to see him continue his hot streak with the Argentine national team, particularly hoping to see him score against fierce-rivals Brazil. While the Brazil match was postponed after four minutes (a situation that may deserve an article all on its own), Correa did get his name on the scoresheet against Venezuela, scoring Argentina’s third goal in a 3-1 win. At 26 years old, Correa is entering his prime and if he can maintain these performances, he’ll be tough to unseat for the “Player of the Month” Award.

Because of the recent international break, potential COVID quarantine restrictions, and the combination of both league and European games happening in such close proximity to each other, there will be no game predictions this weekend. There is too much uncertainty surround who is eligible to play and whether teams will rest key players that were just on international duty to save them for the Champions League group stage openers to accurately predict starting lineups and, therefore, scores.

As elite teams prepare to shift from just league matches to league and European competitions (starting September 14), fans may be interested to know what teams are in which Champions League groups and how the groups may breakdown. Below is an analysis of the makeup of each group, which teams had the luck of the draw on their side, and how the group phase may play out:

Group A: Club Brugge, Manchester City, Paris Saint-Germain, RB Leipzig

RB Leipzig ends up with a tough draw in this group. Paris Saint-Germain are likely the early favorites to win the 2021/2022 Champions League, particularly due their experienced summer additions (Messi, Ramos, Wijnaldum) whom have previously won the Champions League. Right on PSG’s heels are last year’s Champions League runner ups, Manchester City. City lost Aguero in the summer transfer window, but are still a very talented team with De Bruyne, Dias, Torres, Grealish, and other stars. With only teams going through per group, this leaves RB Leipzig out. Leipzig has a strong team and looks to be very competitive in these matches, with Szoboszlai in great form in the midfield, the summer addition of Andre Silva, and the former Barcelona youngsters (Olmo and Ilaix) ready to contribute. In the end, however, Leipzig are going up against two top teams, and I expect them to fall just a little short, ending up in the Europa League after this group stage. Club Brugge is a good team with some outstanding young talent and will compete for a Belgian title, but against these three, it’s hard to see them advancing past the group stage or ending up in the Europa League.

Group B: AC Milan, Atletico Madrid, Liverpool, Porto

Group B is another outstanding group. Atletico Madrid won La Liga last season, Liverpool are recent Champions League winners, AC Milan has a history of Champions League success, and Porto are one of the best non-Big Five team in the competition and have won the Champions League in the past. No team in this group is guaranteed to get through, so this is a difficult prediction to make. Atletico Madrid is probably the most talented team in the group, and the recent success of the club makes them the slight group favorites. Liverpool and AC Milan are both talented teams, but AC Milan has a more veteran consistent presence up front with Ibra and Giroud. Liverpool’s finishing in the final third has been inconsistent, and Klopp may not even start Liverpool’s most in form attacker (Diogo Jota). For that reason, AC Milan has the slight edge over Liverpool; however, if Liverpool’s forward trio of Salah, Mane, and Firmino are in form, then it’s a different Liverpool and a different prediction. In the end, Porto could be the team with the biggest impact in this group. Porto has an ability to get a scrappy point away or grab a late win at home. These results could be the difference between going through and ending up in the Europa League. In the end, Atletico and AC Milan advance to the knockout round, Liverpool to the Europa League, and Porto out.

Group C: Ajax, Besiktas, Borussia Dortmund, Sporting CP

Unlike Groups A and B, Group C has a clear favorite: Borussia Dortmund. The young, fast, and strong attack from Dortmund is likely to overwhelm the other three teams in this group. The question for this group is: who will be the other team to qualify for the knockout round. For Besiktas, they have players on loan who have high level and Champions League experience in Batshuayi and Pjanic; however, Besiktas has had trouble scoring goals during the Champions League group stage in the past. For Ajax, the Dutch team has a history of success in the Champions League, including winning the 1995 Champions League, getting to the 1996 Champions League final, and reaching the 2019 Champions League semifinal. Ajax also has a number of young, talented players who are inexperienced in the Champions League. For Sporting, much like Ajax, they have a number of young, talented players who are inexperienced in the Champions League, but also have exceptional leadership in the central defense and midfield (Coates, Palhinha, and Neto). In the end, this group should come down to Sporting’s attacking talent (Sarabia, Paulinho, Tomas) against Ajax’s strong backline and shape (Tagliafico, Martinez, Alvarez, Blind). Ajax should hold up, so Ajax and Dortmund advance to the knockout round, Sporting CP to the Europa League, and Besiktas out.

Group D: Inter Milan, Real Madrid, Shakhtar Donetsk, Sheriff Tiraspol

The two teams that are favorites to go through are fairly obvious: Inter Milan and Real Madrid. Their spending, talent, and ability to rotate starters to keep legs fresh are significant advantages over Shakhtar, so we’ll keep this section short. The only question left is whether Shakhtar or Sheriff will end up in the Europa League. Shakhtar are playing in Lyiv and Kharkiv due to the Ukrainian conflict. Sheriff play in Tiraspol, which comes with its own complex political situation. The political situations are complicated, but the prediction is not: Shakhtar is a better team with a larger budget and is used to playing away from the home stadium in Donetsk. Inter Milan and Real Madrid advance to the knockout round, Shakhtar to the Europa League, and Sheriff out.

Group E: Barcelona, Bayern Munich, Benfica, Dynamo Kyiv

The group is not as obvious as Group D, but Bayern Munich and Barcelona are still substantial favorites to go through. Barcelona is re-shaping their front three with Antoine Griezmann now at Atletico Madrid, so they may look a bit out-of-sorts in the first game or two, but Barcelona have enough talent to go through. Bayern Munich are a dominant force that could go 6-0 in the group stage. Benfica, while talented, showed some weakness in the back-line at certain point last season and struggled at times with offensive consistency. The Joao Mario acquisition and development of Goncalo Ramos should help with those issues, but Benfica will likely end up in the Europa League. Dynamo Kyiv do have a couple of talented young players, including star-in-the-making Illya Zabarnyi, but just don’t have the overall talent to finish above last place in the group. Bayern Munich and Barcelona advance to the knockout round, Benfica to the Europa League, and Dynamo Kyiv out.

Group F: Atalanta, Manchester United, Villarreal, BSC Young Boys

Group F has three solid teams to compete for the two knockout round spots: Atalanta, Manchester United, and Villarreal. Manchester United and Villarreal are both familiar with each other: they faced off in the 2021 Europa League final, which Villarreal won on penalties. However, neither of these two teams are the same team that played in May 2021. For Manchester United, they had a busy summer transfer window, adding Cristiano Ronaldo, Jadon Sancho, and Raphael Varane. These three additions (whom all have Champions League experience) make Manchester United the most likely to advance from this group. For Villarreal, the Yellow Submarine managed to hang on to Pau Torres, made Juan Foyth’s loan move permanent, and added Boulaye Dia to bolster their attack. Not to be left out, Atalanta also made some significant moves over the summer: they added Juan Musso in goal, Teun Koopmeiners in the midfield, Matteo Lovato at center-back, Champions League winner Davide Zappacosta at right-back, and may turn a 35 million euro plus profit from the Cristian Romero deal. All three of these teams are very talented, so it was close, but in the end, Manchester United and Villarreal should advance to the knockout round, with Atalanta going to the Europa League. BSC Young Boys is a very competitive team in the Swiss League, but is just out-matched here and should be out of European competition after the group stage.

Group G: Lille, RB Salzburg, Sevilla, Wolfsburg

Before the summer transfer window, Lille may have been the group favorite. The surprise French champions were in form last season and clicking on all cylinders. However, Lille Lost some key players from last season, with Soumare, Maignan and Araujo all departing for Leicester, AC Milan, and Atlanta United, respectively. Their absence is apparent, with Lille sitting in 10^th in Ligue 1 and not looking nearly as competitive as last season. RB Salzburg is a very talented young team who could surprise many during the group stage. Aaronson, Adeyemi, Okafor, and Onguene are all talented, but are all inexperienced at the European level, which may lead to inconsistency in the group stage. Wolfsburg, with Casteels leading and Weghorst up front, are likely the second most talented team in this group. Sevilla, filled to the brim with European experience (Rakitic, Ocampos, Navas, Lamela, Delaney) are also the most talented team in this group. Sevilla and Wolfsburg advance to the knockout round, RB Salzburg to the Europa League, and Lille out.

Group H: Chelsea, Juventus, Malmo, Zenit Saint Petersburg

Group H is another group with a significant talent disparity between the top two and bottom two teams. Chelsea, last year’s Champions League winners, added Romelu Lukaku this summer and is a welcomed addition to the defending champions frontline. Juventus may be missing Ronaldo, but there is plenty of talent left on the roster. Dybala, entering the final year of his contract, will finally get a chance to start (which he has more than deserved), Chiesa and Locatelli are great additions, and Juventus will have an experienced back-line with Chiellini, Bonucci, Danilo, and Alex Sandro. These two should advance, leaving Zenit and Malmo to battle for the Europa League spot. Zenit are the stronger side, with Barrios, Azmoun, Wendel, and Lovren returning. Malmo will struggle to compete with Zenit’s talent and spending power. Chelsea and Juventus advance to the knockout round, Zenit to the Europa League, and Malmo out.

I wasn’t going to do predictions for the WCQ because I wanted to stick to club soccer and the big five leagues, but I went 9-0 on the Weekend #3 predictions, so we’re going to keep it going while I’ve got the hot hand.

UEFA

Netherlands @ Norway (Over 2.5)

First game of the World Cup Qualifiers, so taking the over can be dangerous, but these two teams are stacked with offensive weapons. For the Oranje, Memphis, Berghuis, and Luuk de Jong have all scored multiple goals up top during the WCQ so far. Additionally, the Dutch midfield, particularly Wjnaldum and Frenkie de Jong, are built to win midfield battles and make key passes to the front 3. The Norwegian national team is just as dangerous, if not more so, in the attacking third. Erling Haaland and Alexander Sorloth, two top young attacking talents, are expected to start up top, with attacking-minded midfielders Martin Odegaard and Fredrik Midtsjo expected to support Norway’s front formation. While both of these teams do have some defensive talent (particularly the Dutch), this game has the potential for offensive chances and goals.

Croatia @ Russia (Pick, -115; +160)

Despite Ivan Rakitic’s unexpected retirement from international play in 2019, Croatia’s national team is still full of talent. They possess an experienced backline, with Vrsaljko, Vida, Lovren, and the youngster Caleta-Car all expected to play significant minutes at the back. The midfield of this team remains their strength, with Modric (team captain), Kovacic, Perisic, Brozovic, and Vlasic all available to be deployed, depending on what sort of formation Zlatko Dalic plans to use. Up top, the plethora of options continues, with Brekalo, Orsic, Kramaric, Petkovic, and Rebic providing a great mixture of size or pace that may be used. Russia undoubtedly has some talent of its own, particularly Golovin, Miranhuck, and Dzyuba, but Croatia’s talent looks to be overwhelming in this match-up. Beware: this game is played in Moscow, so who knows what tricks the Russia national team (or government) may play.

Serbia vs. Luxembourg (-2, -115; -600)

IT is obvious to even the most casual viewer that Serbia’s strength is their offensive capability. Sure, they have certain players in the back (Milenkovic, Mitrovic, Spajic) who play an incredibly important role on this team, but the offensive side of the ball is where this team truly shines. In the midfield, Serbia has Sergej Milinkovic-Savic playing the role of conductor and distributor. Assisting the midfield maestro, both in the midfield and on the wings, are Kostic, Lukic, Djuricic, and Grujic, all of whom can be used in a number of formations, yet who are attacking-minded. Up top, Serbia has an embarrassment of riches. They can opt for the creativity of Tadic, Radonjic, and Zinkovic, choose to play a more stereotypical number 9, such as Mitrovic, Jovic, and Vlahovic, or use any combination of these attackers. With this talent going up against a usually outmatched Luxembourg team, I expect Serbia to make a statement.

CONCACAF

United States @ El Salvador (-1, Even; -180)

None of the players on the El Salvador side were alive the last time El Salvador qualified for a World Cup. That being said, the U.S. is looking to make up for the 2018 World Cup Qualifier debacle, and looks to have a squad at full strength. Aside from the typical U.S. stars (McKennie, Reyna, the recently cleared Pulisic), the United States rewarded some of its Gold Cup stars with call ups for the WCQ, including Matt Turner, Miles Robinson, and James Sands. One new name to note: Ricardo Pepi. This young forward is going to be the next American exported to a European club. FC Dallas has sent a number of player to Munich…is Pepi next? Expect the U.S. to slam the gas from minute one and not let up until the final whistle. After 2018, they’re looking to make a statement throughout the qualifying rounds.

Canada vs. Honduras (-1, +105; -185)

Honduras is one of those CONCACAF teams that can be sneaky if you catch them on their good day. In particular, Rochez, Espinoza, and Alberth Elis can be dangerous. That said, Canada is a great team that possesses a lot of young and speedy talent. Alphonso Davies, Tajon Buchanan, Cyle Larin, and Jonathan David should all heavily featured in this game. Additionally, Canada has the midfield talent to help control the pace, direction, and distribution of the game, with Kaye, Osorio, Fraser, and even the experienced Hutchinson all expected to play a role. Honduras can be sneaky, but Canada is significantly more talented, plain and simple.

CONMEBOL

Due to issues regarding player releases from European clubs and red-listed countries, CONMEBOL will be difficult to predict. With squads at full strength, some of these games seem obvious, but with some players missing, these predictions become tough. As always, never bet more money than you can afford to lose and gamble at your own risk.

Colombia @ Bolivia (-0.5, +105; +105)

Betting against Bolivia at home is always dangerous because of the altitude. Altitude will be a factor, as game will be played at nearly 12,000 feet. Even the best conditioned athletes in the world will be laboring late in the game due to the thin air. With that caveat, Colombia clearly has the stronger squad in this matchup. They are anchored by an experienced goalkeeper (Ospina), have a good mix of strength and speed in the backline (Sanchez, Mina, Tesilla, Fabra), have midfielder who can control the game, make key passes, and are overall playmakers (Barrios, Cardona, Cuadrado), and have forwards with a nose for goal up front (Morelos, Zapata, Muriel). On the other hand, Bolivia…doesn’t have much going for them besides the altitude. If Colombia can handle that and can score early, they should cruise to a win.

Argentina @ Venezuela (-1, -115; -200)

A number of CONMEBOL teams are having issues with player travel due to some of the country/COVID restrictions; Argentina is not one of them. The South American champions have told their clubs that they’re playing for their country and they don’t really care whether the clubs like it or not. You have to admire their spirit. On the talent side, the Copa America winners are bringing back that squad and adding one key addition: Paulo Dybala. We’ll see if Scaloni can finally figure out how to have Messi and Dybala on the pitch at the same time, but regardless, Argentina should be favorites to qualify from South America. I could wax poetic about Tagliafico, Lautaro Martinez, Rodrigo de Paul, and, of course, Messi, but everyone already knows how talented this squad is. Venezuela is not without talent, with Wuilker Farinez in goal, Josef Martinez up top, and Otero in the midfield, but one notable name is absent from the squad: midfielder and team captain Tomas Rincon. Even if Rincon were named in the squad, Argentina has too much talent and should overwhelm this Venezuelan side.

Brazil @ Chile (-0.5, Even; +105)

Chile is a great side. They have some really strong players, they’re great at home, and they have a lot to play for; however, the reality is that Chile’s stars and key members are aging. Arturo Vidal and Alexis Sanchez are not as dynamic as they used to be, Aranguiz can still contribute but is clearly toward the end of his career, and Gary Medel has switched from the defensive midfield to the center-back position to extend his career. Chile has some players in or close to their prime (Pulgar, Sierralta, Mora), but the majority of key playmakers are older. Brazil, on the other hand, has a squad full of talented players in their prime. Yes, Brazil will have to use a goalkeeper other than Ederson or Alisson due to COVID restrictions, but Marquinhos, Casemiro, Gabriel, Neymar…not only are these players extraordinarily talented, but these players are also approaching or in their prime. Brazil is the more talented squad overall, have key players in their prime, and have yet to lose a game in CONMEBOL WCQ. I’m riding with Brazil.

Uruguay @ Peru (Pick, -130; +160)

Peru is dead last in the CONMEBOL WCQ table. They’re 1-1-4 with a goal difference of -8, a greater number than they’ve scored (6). Uruguay is, as usual, a very talented, offensively-oriented team. Muslera is an experienced international goalkeeper. Araujo, Godin, Coates, Gimenez, and Vina give Uruguay a backline with a great mix of young stars and experienced veterans. Betancur, Arrascaeta, Nandez, and Valverde provide a balanced midfield that can play deep to support the backline, win balls in the midfield, and support the forwards. Gomez, Cavani, and Suarez…I don’t think I need to explain how talented and lethal this group is up front. Peru has a few talented players themselves: Andre Carrillo, Renato Tapia, Yoshimar Yotun…but there’s a significant talent gap between Peru and Uruguay.

Paris Saint-Germain has had quite a summer: signing Messi, Wijnaldum, Donnarumma, and Ramos on free transfers, along with spending 70 million euros on Hakimi. PSG splashed cash all over the place, the bulk of which went towards these free transfers’ wages. Wijnaldum and Hakimi are reportedly earning 10 million euros per season net, Ramos will allegedly net 12 million euros per season, Messi is on 35 million euros per season after taxes, and Donnarumma is reportedly on anywhere between 7 and 12 million euros per season net. When factoring signing bonuses and other performance related bonuses, it’s possible that PSG splashed 200 million euros on new players this summer. This doesn’t include the salaries of players like Neymar, Mbappe, and Ander Herrera, whom all have massive wage packets with PSG. All of this money, new and old, spent while PSG has allegedly lost around 300 million euros in revenue due to the pandemic. Everyone is crying out that PSG is violating Financial Fair Play, without providing any evidence. We look to explore three questions here: 1. What are the Financial Fair Play regulations?; 2. Given the information known, is PSG FFP compliant?; and 3. Is FFP the correct structure for the financial regulation of soccer moving forward?

Financial Fair Play: What is it?

Financial Fair Play is the regulatory system established by UEFA to prevent professional soccer teams from recklessly spending money in current times, only to lead to future financial difficulties for the club. Clubs are bound by regulations that do not allow the clubs to spend more than they earn. The impetus for this regulatory system was a 2009 review done by UEFA, which demonstrated that a significant number of soccer clubs across Europe, including clubs playing at the highest levels, were suffering from financial difficulties, with some clubs in the Big Five leagues facing financial disaster. UEFA recognized that, for the good of the long-term financial health of European soccer, limitations and regulations regarding club spending had to be instituted, or clubs and leagues would risk bankruptcy and financial ruin.

Financial Fair Play takes the previous two seasons of club financial statements into account. UEFA then reviews these financial statements, which includes the club spending, in order to determine whether the club’s spending is fiscally sound given the revenue. Typically, this means that the club is not Financial Fair Play-qualified spending is not greater than its revenue. In order to avoid these financial issues, yet not stunt the development of stadiums and other club facilities, Financial Fair Play only takes certain club spending into account: transfer fees, wages, and bonuses for example.

Financial Fair Play has also had a secondary effect of limiting what some would call “soccer patronage.” Prior to Financial Fair Play regulations, some clubs would have wealthy benefactors or owners. These owners, using their financial resources earned outside of the club, would pay inflated wages or transfer fees for players. These wage and transfer fees would show that the clubs, according to their books, were taking on financial obligations that the club could not possibly repay; however, the wealthy owners or benefactors would then pay off the debt, essentially using their financial power to keep the club solvent. While this may seem like a fair and benevolent idea, the clubs who did not have wealthy owners or benefactors could not financially compete with the clubs who had wealthy owners or benefactors, creating anti-competition issues in both the league and continental play. Financial Fair Play, theoretically, limits the spending so that clubs are limited to only club resources, thereby making the game more competitive. This wealthy owner or benefactor issue is where we find ourselves with Paris Saint-Germain.

Financial Fair Play and Paris Saint-Germain

Paris Saint-Germain is by far the largest team in Ligue 1, which makes sense given they are located in the largest and capital city of France, Paris. However, PSG had an inconsistent history with sporting success, achieving great heights in the 1990s, yet battling against relegation in the 2000s. In 2011, Qatar Sports Investments purchased the team. QSI is the sporting subsidiary of the Qatar Investment Authority, the state-owned sovereign wealth fund of Qatar. This means that functionally, Paris Saint-Germain is owned by Qatar. Qatar, being a wealthy Gulf state with $300 billion in its sovereign investment fund, would be a financial powerhouse in any sporting context; combine this financial dominance with the fact that Ligue 1 is the least financially profitable of the Big Five leagues, and you have a recipe for soccer dominance, or at least domestic soccer dominance. The numbers back this dominance: since 2011, PSG has won the Ligue 1 Title every season except for three seasons: 2011/2012, 2016/2017, and 2020/2021. In the 2011/2012 season, QSI was a new owner, and PSG finished second. In the 2016/2017 season, Monaco had accumulated a number of young talents that were eventually sold including Thomas Lemar, Bernardo Silva, and, most notably, eventual PSG player Kylian Mbappe; PSG finished second in the 2016/2017 season. In the 2020/2021 season, PSG finished second in Ligue 1, edged out by Lille. All of this is a long way of saying that when it comes to financial competition in Ligue 1 there is none: Paris Saint-Germain has the owners with the most financial power at their disposal. Even so, the 2020/2021 season impacted every teams’ finances.

The 2020/2021 season, played during the COVID-19 pandemic, saw international soccer strain under the financial impact of the pandemic. Stadiums were empty, and even the largest teams faced financial difficulty. Barcelona, Messi’s former club and one of the biggest clubs in the world, is 1.2 billion euros in debt, a financial issue of their own making but magnified by the pandemic. And while every other club in the world is figuring out how to reduce costs associated with Financial Fair Play, Paris Saint-Germain is on a spending spree.

Paris Saint-Germain’s financial reports for the 2020/2021 are not publicly available, but suffice to say that UEFA will be inspecting PSG’s wage bill and financial statements closely. A pandemic causes financial losses and the response is increasing the following season’s wage bill by at least 75 million euros net, totaling 300 million euros net (~545 million euros gross)? Some at UEFA may find that suspicious.

The Future of Financial Fair Play

The Messi situation and signing at PSG has caused UEFA to re-evaluate the Financial Fair Play regulatory system and how it interacts with domestic league operations. There are multiple new proposals on the table.

One proposal would see the salary cap in La Liga outlawed by UEFA. The salary cap was the initial impediment to Barcelona re-signing Messi. Barcelona was unable to afford the Argentine international due to the hard salary cap that La Liga sets for teams each season. Other top leagues, such as Ligue 1 (where PSG plays) and the Premier League simply require UEFA FFP compliance. La Liga’s own salary limitations, according to UEFA, could be seen as a serious impediment to La Liga’s competition with other European leagues in the long-term.

Another proposal, which could work in conjunction with eliminating La Liga’s salary cap or independent from any decision regarding the La Liga cap, is the implementation of a UEFA salary cap with a luxury tax for teams who spend over the cap, similar to the NBA’s “soft salary cap.” This proposal, however, does not address the “soccer patronage” issue that teams dealt with prior to UEFA’s Financial Fair Play regulations. Ownership groups or benefactors with massive amounts of wealth would just pay the tax. Let’s use the above example of PSG. Does UEFA really believe that PSG, functionally owned by a sovereign fund worth $300 billion, would be bothered by paying an extra 20 million, 30 million, 100 million, or 200 million euros per year in luxury tax if it practically guarantees that PSG is in the Champions League Final every year. While 200 million euros is a massive sum of money to almost everyone, it’s a drop in the bucket for a sovereign wealth fund that receives money from the state of Qatar every year and is worth nearly double what Jeff Bezos is worth. A “soft” salary cap would only allow for the anti-competitive nature that Financial Fair Play attempted to stop resume.

Whether it be Financial Fair Play or something else, whatever regulatory system that is implemented moving forward needs to both foster competition and have strict enforcement penalties for violators.

Conclusion

We refer back to the three questions we asked at the beginning: 1. What are the Financial Fair Play regulations?; 2. Given the information known, is PSG FFP compliant?; and 3. Is FFP the correct structure for the financial regulation of soccer moving forward?

For question one, Financial Fair Play regulations are financial regulation implemented by UEFA in an attempt to prevent clubs from sacrificing long-term financial solvency for short-term on-field success.

For question two: is Paris Saint-Germain FFP compliant? Without financial disclosures from the 2020/2021 season, it is hard to say. It is important to note that a 300 million euro net wage bill could possibly be FFP compliant under normal circumstances; however, given that there was a pandemic last season and the financial effects of the pandemic could be felt yet again at some point this year, we believe UEFA needs to seriously scrutinize and pay particular attention to Paris Saint-Germain’s financial disclosure.

For question three: Is FFP the correct structure for financial regulation of soccer moving forward? To paraphrase Winston Churchill, Financial Fair Play is the worst form of soccer financial regulation, except for all other forms. That is to say, Financial Fair Play as a regulatory structure has serious flaws, but it’s the best thing UEFA has as a regulatory structure for now. Maybe UEFA will create some other financial regulatory scheme in a year, or two, or ten, or fifty, but for now, Financial Fair Play is the system in place.