PSG set up to spend

How has it been possible for PSG to go on something of a spending spree this summer?

“This pandemic actually presents an opportunity for some of the clubs with wealthy owners that can spend because of the relaxed regulations,” Dr Daniel Plumley, a sports finance expert and lecturer at Sheffield Hallam University told The Athletic. “They know they’re OK to take opportunity out of this crisis. A club like PSG has got the financial power to do that.”

UEFA’s financial fair play (FFP) rules have been a challeng for both PSG and Manchester City in recent times but an easing of the regulations last summer, deemed necessary as a year of pandemic-enforced behind closed doors football hammered clubs everywhere, has presented a chance for those with well-insulated finances to show their muscle.

Owners of Europe’s elite were permitted by UEFA’s FFP rules to put additional money into their clubs as of last June. Those “emergency measures” were an acceptance that a global pandemic would bring unavoidable losses and that the limit of losing a maximum of €30 million (£26 million) over a rolling three-year period would no longer apply.

The financial year of 2020 has not fallen under FFP rules and will instead be rolled into 2021. Those two years are then to be assessed as a single financial window. Losses over the €30 million threshold will be permitted without punishment, so long as it is clear the deficit came as a result of COVID-19.

For all PSG are currently reliant on the financial support of their owners in Qatar, their total income streams are still vast.

The latest Deloitte Financial Report, released in January, places them as the seventh-richest football club in the world, sandwiched between City and Chelsea, last season’s two Champions League finalists.

PSG’s official numbers, released through the Ligue de Football Professionnel’s annual accounting audit, were largely in keeping with the suffering of others.

The 2019-20 season saw them lose €124 million (£106 million) after their total operating income fell by €101 million (£87 million). The club’s annual wage bill was €414 million (£354 million), broadly putting them on a par with Manchester City.   Their £351 million wage bill for the same season was unsurpassed in the Premier League.

PSG’s losses in 2019-20 were eclipsed by five Premier League clubs (Villa, Chelsea, Leicester City, Everton and Manchester City) but they can at least call upon profit-making years in 2017-18 and 2018-19. Those two seasons brought a pre-tax profit of roughly €72 million (£62 million), cushioning the losses of their last campaign on record.

The controversial sponsorship deal with the Qatar Tourism Authority, one that brought an initial FFP charge in 2018, is no more and has left a sizable hole in the balance sheets since 2019. Sponsorship deals with Accor Live Limitless and a tie-up with Nike’s Jordan brand undeniably help, but the ability to carry on spending this summer owes far more to the security of Qatar’s backing.