Skip to main content

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.

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day ...
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more