Club record losses at PSG

The authoritative Swiss Ramble investigates the latest accounts of Paris Saint-Germain. They were acquired in 2011 by Qatar Sports Investments (QSI), a subsidiary of Qatar's sovereign wealth fund Qatar Investment Authority (QIA), making the club by far the richest in France and one of the wealthiest in the world.

The pre-tax loss increased by €100m to a club record €225m, despite revenue rising 2% to €570m. Wage bill up 21% to €503m, the highest in Europe (before Messi’s signing last summer).

Clearly, all football clubs have been significantly hit by the effect of the pandemic, but the €225m pre-tax loss was one of the largest in Europe, only surpassed by Barcelona’s awful €555m and Inter €239m. Indeed, Man City, Bayern Munich and Real Madrid all posted small profits.

Partially due to COVID, the pre-tax loss increased by €100m from €125m to club record €225m, despite revenue increasing €10m (2%) from €560m to €570m, as €55m profit on player sales turned into a €5m loss, while operating expenses shot up €56m (8%). Post-tax loss was €224m.

PSG have not quantified the COVID impact, but the Swiss Ramble estimates revenue loss as €103m, mainly stadium-related, such as gate receipts, merchandising and events. Partly offset by €35m revenue deferrals from 2019/20. Total loss over 2 years is €150m, including broadcaster rebate.

The main driver of the revenue increase was broadcasting, which rose €70m (54%) to €202m, mainly due to revenue deferred from 2019/20 accounts, which offset COVID-driven reductions in gate receipts, down €37m (97%) to just €1m, and commercial, down €23m (6%) to €367m.

Unsurprisingly the €225m loss was by far the largest in France, more than twice as much as closest challenger, Lyon €109m, followed by Marseille €76m and Bordeaux €67m. Normally most French clubs post small profits or losses, but 2020/21 included a full year of the pandemic.

Player sales

PSG made a €5m loss on player sales, as Cavani, Thiago Silva and Meunier were all released. Well down from €50m profit, in contrast to Lille’s €81m gain (mainly Osimhen to Napoli). COVID depressed the transfer market, but some clubs did well: Real Madrid €106m.

Traditionally the club have made very little from player sales, though this had become increasingly important, as they posted gains of €272m between 2018 and 2020 before last season’s slowdown. Of course, could have made a lot more if they had accepted Madrid’s offer for Mbappé.

In contrast, player trading is very important to other French clubs, especially Monaco, who generated over half a billion (€541m) in the last 5 years, Lyon €364m and Lille €328m. This approach offsets large operating losses. PSG are only 4th highest in Ligue 1 with €281m.

The revenue gap

PSG alone generated over a third of total revenue in Ligue 1 – more than the 14 clubs with lowest revenue combined. More tellingly, their €570m was also more than Marseille €146m, Lyon €118m, Lille €84m, Rennes €79m, Nice €68m and Monaco €63m put together. “Mind the gap”.

Commercial revenue (per Money League definition) rose €38m (13%) to €337m. Lower than the club’s €363m peak in 2019, but only surpassed by Bayern Munich €345m. Their year-on-year growth was the highest in Europe, ahead of Man City €24m.

Following the signing of Messi, PSG are looking to further boost commercial income. Club president Nasser Al-Khelaifi said, “The club will increase in every part commercially. We will give you some numbers and you are going to be shocked.”

They had the highest broadcasting revenue in France with €202m, twice as much as Marseille €91m. The influence of European qualification is evident here with €146m of this revenue stream (nearly three-quarters) coming from their Champions League exploits.

French TV rights are much lower than other major leagues. Revised €735m for Ligue 1 (including international rights) is only one less than €1 bn, far below Premier League €3.8 bn, La Liga €2.1 bn, Bundesliga €1.4 bn & Serie A €1.1 bn.

PSG earned a massive €441m from Europe in 5 years up to 2021, twice as much as Lyon €221m, thus increasing the gap to other French clubs. They will only receive €67m this season after last 16, exit including €30m for UEFA coefficient payment (based on performance over 10 years).

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The Political Economy of Football V2

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