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Monaco may seem almost comically tiny, less a real country than a glorified safe deposit box festooned with palm trees and Lamborghini dealerships, but it teems with interesting statistics.
Population: 35,427.
Number of nationalities represented: 125.
Unemployment rate: 0 per cent.
Income tax rate: 0 per cent.
Number of soccer-team-owning Russian billionaires feuding with French soccer officials: one.
That would be Dmitry Rybolovlev, a potash fertiliser tycoon who in 2011 expressed his support for his adopted country by buying a majority stake in its struggling soccer team, AS Monaco, and proceeding to aggressively vacuum up expensive European players.
Deep-pocketed foreign owners, like Roman Abramovich at Chelsea and the Qatar Investment Authority at Paris Saint-Germain, are a euro a dozen these days. But Monaco is different from other countries. Rybolovlev can offer potential players not just hefty wages, the chance to hobnob with other rich sportspeople, and the excitement of living in a sunny place that takes just 45 minutes to walk across (more, if you stop for lunch): He can offer them liberation from the petty annoyance of income tax.
This is a happy prospect no matter what you earn; it begins to look like bliss when you count your income in the millions. And it puts the rest of the French league at a significant disadvantage. While Monaco basks in its special tax status, players for French teams are subject to the kind of high tax rates that recently motivated the actor Gerard Depardieu to renounce his citizenship, acquire a Russian passport and depart for the non-French hills of Belgium.
"Frankly, you can say that it is unfair, that everyone must be on the same level," said a Monaco government official, speaking on condition of anonymity because he did not want to be seen criticising his country. "Because of its tax situation, Monaco is in a very special position."
"Special" is one way of putting it. It's like having a Major League Baseball team in the Cayman Islands.
The French soccer league has grumbled about Monaco's exceptional situation in the past. But now, alarmed by the team's sudden winning streak and unnerved by their US$158 million-or-so acquisition of three great players - Joao Moutinho and James Rodriguez from Porto and Radamel Falcao from Atletico Madrid - it finally did something. In March, it decreed that starting next June, any team playing in the French league would have to be based in France and subject to French taxes. For "any team", read "Monaco".
"Monaco belong at the top level of French football," the league's president, Frederic Thiriez, said at the time. "It is therefore all the more important that the club adheres to French rules, especially in relation to tax, so that every club in the league is on a level playing field."
Among other things, Thiriez said, Monaco had backpedalled on their promise to hire a certain percentage of French players, who are required to pay French taxes even if they live in Monaco. Monaco have also focused their purchases on European clubs other than French ones, upsetting rival French clubs by failing to share their wealth through transfer fees.
"The problem has been considerably exacerbated by the financial crisis, the drop in TV rights in France, the arrival of a shareholder with apparently unlimited resources at the head of Monaco and, above all, a transfer strategy oriented 80 per cent toward foreigners," Thiriez said.
Not surprisingly, AS Monaco were not pleased by the league's decision. Nor did the team like the French Football Federation's proposed compromise that would allow the club to pay a one-time fee of about US$263 million to the other clubs in exchange for being allowed to stay in Monaco.
Extortion, the team said.
With negotiations, such as they were, at an impasse, the team appealed to the Conseil d'Etat, France's highest administrative court, arguing that the league's new residency requirement violated "several fundamental principles of French and European law". These include, the team said, "the principles of free movement, free competition, free access to sporting competitions, and also the Franco-Monegasque tax convention signed on February 18, 1963".
A ruling is not expected for at least several months, but the issue is laced with bad feeling. Some rival teams, upset that Monaco have put themselves in prime position to seize one of France's two assured spots in the lucrative Champions League, have talked of boycotting Monaco if they fail to move to France. Others have expressed sympathy for a team who potentially have the power to excite television fans, rouse French soccer from its prolonged malaise and bring in revenue, if not necessarily at home.
That is another issue: Some critics believe Monaco is a silly place to have a world-class team in the first place. Its grand stadium, Stade Louis II, has room for 18,500 spectators, but even with blocs of tickets handed out to businesses, the games rarely draw more than 7,000.
"The problem is that they just don't have a fan base," said Philippe Auclair, who writes extensively about French soccer and is not a fan of Monaco. "The 73 fans they do have are going to be angry with me, but they are an artificial club. Football clubs are generally born from youth associations, parish teams or groups of fellow workers rooted in a community. But what community is there in Monaco apart from millionaire tennis players and tax evaders?"
One option would be to look for fans outside Monaco, in southeastern France, he said, "but those fans can't stand Monaco anyway".
Completely false, people in Monaco say. For one thing, the team have been around for nearly 100 years, some of them pretty glorious.
In 2004, they made the Champions League final, losing to Porto, 3-0. When France won the World Cup in 1998, four of the players on the national team were from the Monaco team.
"[We] have been affiliated to the French Football Federation since 1919, and have, over a long period of time, invested significant sums into French football," Rybolovlev said recently. "The club have contributed many players to the French national team and proudly represented French football in European competitions."
Speaking after the Europa League final recently, Michel Platini, the president of Uefa, which governs European soccer, said he felt puzzled by France's attitude towards Monaco. "I find it a little difficult to understand," Platini said. "It's as if French football always liked Monaco so long as they didn't win."
Jerome de Bontin, a former AS Monaco president who is the general manager of the New York Red Bulls, said the team were crucial to Monaco's sense of itself - and to its ruler, Prince Albert II, a passionate soccer fan. "Now, with the support of the new owner, we have the opportunity again to have a flag carrier, a good ambassador for the principality," he said.
Without the chance to earn much stadium revenue, Monaco were entitled to advantages elsewhere, De Bontin said. He attributed France's attitude to ingrained jealousy and suspicion.
"The socialist government seems to have targeted the rich," he said. "There seems to be this new philosophy in France that it's no longer a good thing to be successful."
The New York Times


Unfair advantage

Monaco's club president Dmitry Rybolovlev has taken advantage of the principality's unique position and its tax status. Photo: AFP

Critics say Monaco lack a true fan base. Photo: Reuters

Radamel Falcao is one of their big signings. Photo: Reuters

Sport

Football

Dmitry Rybolovlev, the billionaire owner of AS Monaco, has raised French hackles by making the most of the principality's unusual status


Monaco may seem almost comically tiny, less a real country than a glorified safe deposit box festooned with palm trees and Lamborghini dealerships, but it teems with interesting statistics.


Unfair advantage

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Dmitry Rybolovlev, the billionaire owner of AS Monaco, has raised French hackles by making the most of the principality's unusual status

Dmitry Rybolovlev, the billionaire owner of AS Monaco, has raised French hackles by making the most of the principality's unusual status