The best moments in marketing are sometimes not marketing at all. They’re just extraordinary things that happen. In June 2019, at the Glastonbury music festival, English teenager Alex Mann took the stage from the crowd wearing a Paris Saint-German jersey to join London rapper Dave in a word-perfect rendition of the artist’s hit Thiago Silva – a tribute to PSG’s Brazilian captain.
The footage went viral – the YouTube clip has now been seen by nearly 11.5m people. It was unscripted, authentic and cool – a marketer’s dream for a lifestyle brand. And for Ligue 1 champions PSG, completely free.
That kind of moment, however, could only resonate with millions of young people because of the work the club has put into its brand development since it was bought in 2011 by Qatar Sports Investments, an investment arm of the sovereign wealth fund of Qatar.
The strategy of the new owners has gradually become clear: to build more than a successful football team. They want PSG to have the same kind of brand cachet as baseball’s New York Yankees or Italian motor racing team Ferrari. Something that transcends sport.
How many people buy a Yankees baseball cap every year with no idea who the Yankees are, how they are performing or even what sport they play? That’s where PSG wants to be. And it’s getting there. Last season, one million of its Nike-branded jerseys were sold worldwide.
“That clip was pretty cool and went viral,” says Marc Armstrong, the club’s chief partnerships officer, of the Glastonbury moment.
“People are commenting more and more now about the number of Paris Saint-Germain jerseys they see all across the world these days. This is borne out by the sales success our partner Nike is experiencing and is a result of the work we have done as a club for years now. That clip was a good example of this success and the global relevance of the club.”
The values the PSG logo are intended to evoke are flair, fantasy, romance, style and youthfulness. Players have been bought not just because they fit a coach’s tactical philosophy but to make a statement about the club’s ethos and ambition: larger-than-life characters like Zlatan Ibrahimovic, one-man industries like David Beckham and, more recently, Brazilian Neymar and rising French star Kylian Mbappé, the two most expensive players in football history.
PSG by numbers
Some leading figures in football, like Javier Tebas, president of Spain’s LaLiga, have questioned whether it is fair that state-owned clubs compete with clubs owned by entrepreneurs or members. But in terms of hard numbers, PSG can claim to be the success story of the decade in European football.
PSG has won 22 trophies in the last six seasons – more than any other club in Europe – including six league titles on the bounce. It is one of only four clubs to have reached the knockout stages of the Uefa Champions League for the last eight seasons. The others are Barcelona, Real Madrid and Bayern Munich.
The club has very quickly built a global following. Nielsen Sports research for PSG in March 2019 came up with a total “worldwide fan potential” of just under 400m. Followers were mostly in the Asia-Pacific region (129.16m), then Africa and the Middle East (99.76m), Latin America (71.93m), Europe (54.27m) and North America (44.62m).
Club-commissioned fan or ‘follower’ figures are often met with a roll of the eyes these days, but clubs still put great store by them when pitching to potential sponsors.
The same is true of reach and engagement numbers on social media. At June 30, 2019, PSG’s Instagram followers were up 72 per cent year-on-year, Twitter up 11.6 per cent and Facebook up 8.2 per cent. Only the Premier League’s Liverpool and Serie A’s Juventus enjoyed faster growth on Twitter in the same period. PSG now has the ninth most-followed Facebook page among sports clubs and the joint fifth YouTube football channel (with the Premier League’s Manchester City).
This growth in actual or potential customers is reflected in a more tangible metric: the bottom line. For the 2018-19 season, PSG’s sponsorship income was up nearly 60 per cent, from €94.1m ($105.3m) to €149.6m. Total commercial income rose 25 per cent, from €268.7m to €335.7m.
QSI paid about $130m (€116.1m) for the club when it acquired it in 2011 from private equity firm Colony Capital. Now ranked sixth in the Deloitte ‘rich list’, it is valued at $1.9bn.
“This season we are expecting similar growth in revenues, and hopefully even more”, Armstrong says. “Can we keep that going? We hope so. We have ambitious targets. But you also have to make sure you have the inventory. After a successful couple of years, there are fewer traditional assets to sell. We have to keep being creative, pushing the boundaries, finding new ways of bringing in revenue.”
PSG currently has 31 sponsors across 25 sector categories (see table) with at least two more to be unveiled in the coming months. The nature of the brands has been changing in line with the expansion of the club’s footprint. Of the 16 deals signed in the last two seasons, only two are for France only. The rest are either global or multi-market.
“We don’t set a maximum or minimum number for partners,” Armstrong says. “Equally, we don’t want too many. We want fewer, deeper relationships. We have let some of the older, smaller deals lapse and replaced them with bigger, better deals that are mostly global or at least multi-market partnerships.”
PSG’s two most valuable deals are its renegotiated kit deal with Nike, which bumped the rights fee up from €25m per season to about €60m per season, and its new main sponsor deal with hotel chain Accor Hotels, which is thought to be worth about €65m per season.
The Accor deal provides good case study of how the club is approaching brand relationships and how brands see the club as a global platform. Accor is a French company but only 22 per cent of its business is in France. Expanding the non-French business is a priority.
As well as the licence fee, PSG benefits from a huge amount of activation the brand is doing globally around the partnership. A typical example was the fashion show Accor put on Shenzhen in China last summer to mark the launch of the new Nike Jordan-branded PSG kit.
There are also smaller deals which demonstrate what Armstrong means by ‘new ways’ of driving sponsorship revenue. The club’s deal with mobile games company Supercell deal is non-traditional. The name won’t be seen on LED boards or other fixed exposure assets. The company’s whole focus is on having access to players to create ‘cool’ content for its key target audience.
PSG has distinct tiers of partners, but there are big differences in the nature of the rights on offer and the licence fee within each tier. PSG’s marketing division includes teams called Business Intelligence and Offer. Business Intelligence provides the market research. Offer builds the proposal and is expected to be creative in constructing a package that works best for each.
Armstrong admits that it is something of a cliché to say that sponsorships now have to be tailor made. But this is the way the industry has been heading for many years. “It’s really about getting under the skin of the brand and what they want to achieve,” he says. “The first meeting is always more about listening to what the brand is looking for.”
FFP and diversification
The club’s issues with Uefa’s Financial Fair Play regulations are well-documented. Since 2014, its sponsorship deals, particularly those with Qatari companies, such as the Qatar Tourism Authority, have come under scrutiny as to whether they reflect genuine market value or are artificially inflated. At one time, the QTA deal was reportedly worth over €200m per season to the club. It has since been renegotiated downwards and the current value is not available.
One of the trends noticeable in the club’s partner portfolio in recent years has been a reduction in the number of Qatari brands. This is not, however, a reaction to the high-profile FFP battles with Uefa, Armstrong insists.
“It has happened quite naturally because we have done a great job of getting ourselves out there, appealing to brands all over the world. Only three of our partners are Qatari brands and we do great things with them. It’s a small part of the total but very important, as two of them are on the shirt and in the upper echelons of our programme. Of the 16 new deals we have done in the last two seasons, none are Qatari. We may have other Qatari partners in future. We’ll see.”
FFP, Armstrong says, is something all clubs have to consider. “The more you make the more you can spend. We are no different to any other club in terms of keeping an eye on our revenues and what we can spend.”
City of lights
In addition to success on the pitch and its positioning as a lifestyle brand, PSG also has a not-so-secret weapon in terms of appealing to global brands: Paris.
“We are selling the city as well as the club and we definitely we feel we embody many of the same values: culture, style and passion,” Armstrong says.
When QSI took over, it redesigned the club crest and all related brand equity around the Eiffel Tower.
PSG’s iconic Parc des Princes stadium is within the city limits, not a remote out-of-town location. News coverage of matches often focuses on the VIP seats as much as what happens on the pitch. Any celebrities visiting Paris, from Jay Z and Beyoncé to Rihanna and the Hadid family, are likely to take in a match.
Being the only major club in such a big city is an advantage when talking to potential sponsors. “We always say to brands: ‘Imagine if London had one Premier League team instead of six. And imagine they were called London United and had Big Ben in their badge’. That’s what we are essentially. You can’t come to Paris without touching or feeling Paris Saint-Germain in some way.”
PSG has come a long way in a short time since its takeover in 2011. Founded in 1970, the club will celebrate its 50th anniversary in August. Expect something eye-catching, Parisian and cool.