HomeBusinessFootballFrance

Saints and Sinners

Bastien Drut, French economist and consultant for Soccernomics, gives his account of how football club Paris Saint-Germain is pioneering the domestic game.

Paris Saint-Germain (PSG) is unique among European football clubs: it is the only one directly owned by a foreign state.

The club was bought in 2011 by Qatar Sports Investments, a branch of the Qatar Investment Authority (QIA), Qatar’s giant sovereign wealth fund. The Gulf state, whose wealth comes from natural gas exports, is trying to use sports to promote itself around the world. This strategy has certainly improved Qatar’s name recognition: the number of Google searches for ‘Qatar’ surged after it secured the hosting of the 2022 Fifa World Cup and acquired PSG.

PSG’s owners have far more financial power than their European competitors, even including billionaire club owners such as Roman Abramovich, Dmitry Rybolovlev or Silvio Berlusconi. The Qataris are ready to spend what it takes to win the Uefa Champions League. Furthermore, PSG’s revenues have risen rapidly – from €100m for the 2010-11 season to €474m for 2013-14, which is an average rise of 67 per cent per year.

Every source of the club’s revenues has increased, such as television rights and matchday revenues, but most of the rise is due to the club’s mega-contract with the Qatar Tourism Authority, which reportedly pays PSG €200m a year.

This has allowed the Ligue 1 club to recruit some of the best players in the world, including Zlatan Ibrahimovic, Thiago Silva, Thiago Motta, David Luiz, Edinson Cavani and Angel Di Maria. For a while, Qatar’s plans for PSG were hampered by Uefa’s financial fair play rules, but this summer, the European governing body decided to relax its restrictions on the club.

 

A photo posted by Paris Saint-Germain (@psg) on

 

What are the consequences of this unprecedented partnership? Obviously, there is now little suspense about which team will win the league. It is well known that a club’s wage bill is a good predictor of its sporting success. Today, PSG’s wage bill represents around a quarter of Ligue 1’s total wage bill, up from less than eight per cent in the 2009-10 season.

PSG won the last three French titles and is very likely to add more in the following seasons. In April last year, PSG achieved the second-highest ELO score – a ranking of domination widely used in sport – in the history of Ligue 1. Nowadays, the main suspense in the league concerns who will finish second and third.

Nonetheless, the takeover of PSG has had benefits. Some years ago, there was a risk of a fall in domestic television rights, the main revenue source of French clubs. The arrival of Qatari-owned television channel beIN Sports, which happened to invest in French football at the same time that QSI bought PSG, saved Ligue 1 from financial catastrophe.

PSG’s world-class players have also made Ligue 1 far better known abroad than ever before, which has in turn added to the value of television rights. As a further consequence, this has helped French clubs sell more players to big European clubs.

To continue reading the International Focus on France, please click the links below:

1. French Revolution: SportBusiness International looks at the major sports events on the horizon for France, as well as its battlefield television broadcast industry.

2. Brand Connection: Kevin Roberts investigates why and how brands are attracted to French sports properties.

Most recent

US Olympic national governing body has suffered declining revenues and membership numbers since the onset of the health crisis but large financial reserves coupled with a move to put competitions and coaching courses onto digital platforms have stemmed losses.

Tom King talks to Razlan Razali, team principal of Petronas Yamaha SRT MotoGP team, about the growth potential for motorcycle racing in Southeast Asia.

Mitchell Sports, chief executive of boutique sports advisory firm Tipping Point Sports LLC, examines the key elements of the industry's recovery from the pandemic

Omar Chaudhuri, chief intelligence officer at 21st Club, reflects on how the transfer market will change and impact clubs of all sizes during and after the Covid-19 crisis