Why Neymar’s transfer fee could make economic sense.

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Late August is often a very busy time for football clubs as the transfer window closes and this year was no exception with Neymar da Silva Santos Junior being signed by French club Paris Saint-Germain (PSG) from Barcelona for a staggering €222m. How can a club afford a record signing – more than double the previous record price for a footballer? To put this is perspective Paris Saint-Germain is owned by Oryx Qatar Sports Investment, a privately held company based in Doha, which is in fact an investment vehicle for the Qatar government. Neymar will cost PSG’s owners about €500m over five years but he is an investment which the club hope to take advantage of.

From PSG’s perspective, the price tag requires close scrutiny. Although transfer fees have generally increased with the sport’s revenues over time, their share of clubs’ overall spending has remained more or less steady: big…

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