PSG 'a club in crisis'

Paris Saint-Germain are seemingly a club in crisis, even though they are currently on top of Ligue 1, as their results this season have been disappointing by their high standards, while rivals like Lens and Marseille are too close for comfort.

Fans have recently called for the board to resign, criticising the club’s management for a lack of a sporting vision and poor recruitment, including many over-rated talents and mercenaries. They say that too many players are only in Paris for the money.

PSG’s pre-tax loss in 2021/22 increased by €150m from €225m to a club record €375m, despite revenue increasing by €100m (18%) from €570m to €670m and player sales generating a €32m profit compared to a €5m loss the prior year. The significant worsening in the bottom line was due to operating expenses shooting up by an incredible €287m (36%), taking these to well over €1 bn. Loss after tax widened from €224m to €369m.

Of course, it is not unusual that leading football clubs lose money in pursuit of a glittering prize, but PSG’s €375m loss was also in a class of its own in Europe last season, over 50% more than the next highest club, namely Juventus €237m.

Unsurprisingly, PSG’s massive €375m loss was by far the largest in France, more than six times as much as the closest challenger, Sir Jim Ratcliffe’s Nice €60m, followed by Lyon €57m, Bordeaux €53m, Troyes €31m and Marseille €31m.

Before COVID struck, PSG had actually reported profits in four of the last five years - with tiny losses in the three years before that. However, that was then, this is now, and their losses have been stratospheric in the last three years, adding up to a hefty €725m. Clearly, 2019/20 and 2020/21 were adversely impact by the effects of the pandemic, but the fact is that last season’s loss is due to the club’s own decisions around player recruitment. In fact, their €375m loss last season is more than the two COVID seasons combined.

The main driver of PSG’s steep revenue increase was commercial, which rose €106m (29%) from €367m to €473m, while gate receipts were up from just €1m to €57m following the return of fans to the stadium after COVID restrictions were lifted.

PSG alone generated a third of the total revenue in Ligue 1 – more than the 14 clubs with the lowest revenue combined. Even more tellingly, PSG’s €670m was higher than their four closest challenger put together: Marseille €238m, Lyon €160m, Lille €148m, and Monaco €86m.

However, broadcasting fell €63m (31%) from €202m to €139m, partly due to a worse performance in the Champions League, and partly because the previous season included some revenue deferred from the extended 2019/20 season for games played after the club’s 30th June accounting close.

PSG’s revenue dominance in France is highlighted by the fact that they benefit from a far higher percentage of revenue in their domestic league than any other major European country. They account for 33% of Ligue 1 revenue, while the next highest is La Liga 22%, followed by the Bundesliga 22%, Serie A 17% and the Premier League 12%.

PSG have really ramped up transfer spend since the QSI acquisition, amounting to €896m gross outlay in the last six years, which was around 30% more than the preceding 6-year period. This includes the huge acquisitions of Neymar from Barcelona €222m and Mbappé from Monaco €180m, but spend has actually fallen since the peak years of 2018 and 2019.

PSG clearly enjoy enormous financial advantages in France, where their revenue and wages are much higher than their domestic challengers, but the true test remains the Champions League, which is proving to be a far more difficult nut to crack.

This has helped drive resentment among the fans, especially as many believe that the current team is the worst seen during QSI’s tenure, despite the huge amount of money invested.

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The Political Economy of Football V2

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