Monaco and French authorities in dispute over club’s financial status

The dispute between French football authorities and AS Monaco has escalated after the fallen giant claimed the French Football Federation (FFF) and French Football League (LFP) have demanded a Eur200 million settlement to resolve the row over the club’s privileged financial position – a claim the two bodies have flatly rejected.

Monaco’s base in the Mediterranean principality allows it to benefit from the favourable tax laws in place there, rather than the far more stringent French laws which include proposals to tax annual earnings over Eur1 million at 75%. An agreement made in 1869 means Monaco can sign a foreign player without him having to pay income tax. Meanwhile, French players subject to French income tax regulations pay approximately 20% less in national insurance contributions on their salaries than their contemporaries playing for other clubs. However, the LFP has ruled that all its clubs should be subject to the same financial regulations, giving Monaco until June 1, 2014 to fall in line. The club risks exclusion from LFP competitions if it fails to do so.

Monaco, represented by owner Dmitry Rybolovlev, on Friday staged a meeting with FFF president Noël Le Graët, who was acting on behalf of the Federation and the LFP. Following the meeting, Monaco on Sunday issued a statement outlining its claims of a settlement, adding that it is now prepared to take legal action to resolve the dispute. The statement read: “Mr Le Graët, acting on behalf of both the FFF and the LFP, demanded from AS Monaco FC a huge payment of Eur200 million in return for ending the current conflict without the club having to relocate its headquarters to France in order to remain in the French Championship. The position of the club is very clear: ASM FC considers that such a demand is totally unacceptable.” The statement added: “The decision taken by the French football authorities – suddenly and without any consultation – is so clearly counter-productive, given that the project of the club will contribute to the whole of French football and have a positive impact on its development. ASM FC, after consultation with its legal counsel, has decided that it has no other choice but to bring a legal action in order to obtain a judicial resolution of the dispute.”

Monaco is currently staging a revival under the ownership of Russian billionaire Rybolovlev, who through his Monaco Sport Invest (MSI) company, acquired a 66.67% stake in the club in December 2011. Monaco currently sits top of Ligue 2, five points clear of Nantes, and seems on course to return to Ligue 1 next season. The club’s potential spending power, allied to its current financial status, has led to worries amongst its rivals that it may enjoy a competitive advantage next season. Responding to Monaco’s claims, the FFF insisted that “it was ASM who had proposed a payment of Eur200 million in a timeframe and a manner yet to be determined”. Le Graet was reported as saying in L’Equipe: “The Federation wants to sort things out. It seems difficult to imagine not accepting Monaco in our league, but it also seems necessary, from our point of view and following discussions with Monaco, that the club, given its advantages, eases the situation of the other clubs. We had laid out a number of criteria. I repeat: our discussions had progressed well. We wanted an amicable agreement.” He added: “Some presidents are taking a hard line as they’re threatening to not go and play at Monaco. History shows Monaco have always played in the French league. We find ourselves in an exceptional situation. It’s up to Monaco to make the situation easier for the other clubs. The federal line is clear: smooth the rough edges, find an amicable agreement.”