Qatar Makes a $263 Million Statement With Proposed Neymar Deal

  • Paris Saint-Germain signs Brazil soccer star in record deal
  • Qatar locked in two-month diplomatic spat with Saudi bloc

Paris Saint-Germain Football Club have signed Brazil soccer star Neymar in a record deal that has shocked the world in terms of its size and scope. The Qatari owners of the French club will spend hundreds of millions of dollars over the course of the deal, which might not be solely focused on soccer. (Source: Bloomberg)

Neymar’s record transfer to French soccer team Paris Saint-Germain is a milestone for a club determined to win Europe’s top silverware. It’s also seen as a political statement by its wealthy owner: Qatar.

The Brazilian forward -- whose full name is Neymar Da Silva Santos Jr -- is joining PSG from Spain’s FC Barcelona after the Qatari-owned club agreed to meet his $263.7 million buyout clause. The total value of the deal, including wages and add-ons, may reach almost $600 million, Sky News reported.

Gadfly: Neymar Is Less Greedy Than He Looks

The transfer is the latest in a series of headline-grabbing deals by Qatar since June, when a Saudi-led alliance cut ties with the Gulf nation after accusing it of sponsoring terrorism. The world’s top exporter of liquefied natural gas has since agreed to buy F-15 fighter jets from the U.S., seven warships from Italy and flirted with the idea of buying a stake in American Airlines. Even if preparation for the deals predates the standoff, analysts say Qatar is determined to show it has not been derailed by the crisis.

“Qatar has not capitulated, it is fighting back -- and the Neymar signing is part of that,” said Simon Chadwick, professor of sports enterprise at the University of Salford in the U.K. “It’s a charm offensive, a soft power stance -- there’s something of international diplomacy in all of this. The last thing Saudi Arabia wants is people all over the world talking about Qatar,” its investments in sports and Neymar, he said.

Two-Decade Push

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and transport links with Qatar on June 5, accusing it of backing extremist groups across the Middle East and cozying up to Saudi Arabia’s regional rival, Iran. Qatar has repeatedly denied the charges.

At the heart of the dispute is Qatar’s two-decade push to develop a foreign policy sometimes at odds with its neighbors. It backed the Muslim Brotherhood in Egypt, Hamas in the Gaza Strip and armed factions opposed by the U.A.E. or Saudi Arabia in Libya and Syria. Its television network Al Jazeera has at various times embarrassed or angered most Middle Eastern governments.

Qatar is also known for splashing on trophy assets, from stakes in global companies including Glencore Plc and Rosneft Oil Co. to landmark London properties such as the Shard. A desert country with few global sports achievements, it surprisingly won the rights to host the 2022 soccer World Cup.

“Qatar does not use economic tools to harm trading partners,” Qatari Finance Minister Ali Shareef Al Emadi wrote in an editorial published by Bloomberg last week. “Nor do we leverage business deals for political gain.”

Workers’ Rights

Qatar’s strategy hasn’t always been smooth-sailing.

The World Cup award has fueled allegations of corruption within the world’s soccer governing body, while Qatar has faced criticism over its treatment of workers on construction sites for the tournament. The government has always denied any wrongdoing related to the World Cup bid and has pledged to improve workers’ living and working conditions.

Read More: QIA Is Said to Seek U.S. Deals in Defiance of Gulf Crisis

Qatar has beefed up its lobbying efforts since the crisis with the Saudi alliance broke out, including in Washington where it has hired six new firms and revised contracts with two others to focus on its current troubles at a cost of about $1.5 million a month, according to terms specified in contracts which must be disclosed to the Justice Department under the Foreign Agents Registration Act.

“Qatar is no stranger to using soft power in the form of buying influence where it can, and especially in the West,” said Milena Rodban, a Washington-based political risk consultant. Qatar’s own human rights record means that the public relations campaign will unlikely lead to “overwhelming appeals” that would resolve the Gulf crisis in its favor, she said. 

The decision to buy Neymar has infuriated Spain’s top soccer league, which turned the player’s lawyers away on Thursday when they tried to file the money for his release clause before the deal finally went through. Chairman Javier Tebas, in remarks to the AS newspaper, described PSG as a “club/state.”

The deal could backfire on Qatar, especially if fans of other teams see it as damaging their interests -- whether from driving higher ticket prices or reducing the competitiveness of their leagues, said Marc Ganis, president of marketing company Sportscorp. Even from a business standpoint, it’s an over-reach, he said.

“The amount to be paid for Neymar is staggering by any standard,” Ganis said by email. “Whatever increase they could generate from Neymar joining the club would be a drop in the bucket relative to how much they would pay for this one player.”

— With assistance by Thomas Gualtieri, Angeline Benoit, Donna Abu-Nasr, and Bill Allison

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