Skip to main content

PSG tries to break into US market

Football deals take a long time. Just ask Paris Saint-Germain, whose Qatari owners have finally agreed to sell up to 12.5 per cent of the French football serial champions to US investors.

The deal, which valued PSG at more than €4bn, came after more than a year of talks with potential partners. That’s not unusual considering Premier League sides Everton and Manchester United are still waiting to conclude deals after similar timeframes.

And now, the arrival of Arctos Partners, based in Texas and New York with a new office in London, signals a new era for PSG.

Qatar Sports Investments took control of PSG in a €70mn deal in 2011 and transformed the club into perennial French champions through €1.5bn of investment and the recruitment of stars like Zlatan Ibrahimović, Neymar and Kylian Mbappé.   Buying stars was crucial to establishing PSG on the global stage, as was rebranding the club as “Paris”.

Since 2011 PSG has outspent all but three clubs – Chelsea, Manchester City and Manchester United  - in the transfer market with gross expenditure of $1.9 bn.  In the penultimate season before the departures of Neymar and Messi, PSG’s annual payroll soared to €729 mn. 

Now, QSI wants to take the next step, bringing in US investors as a strategic move ahead of the Club World Cup in 2025 and the World Cup the following year. Lionel Messi’s move from PSG to Inter Miami last summer highlighted a demand for elite soccer in the US, as crowds have clamoured to catch a glimpse of the World Cup winner.

Boosting revenues from merchandising and sponsorship overseas is vital as PSG targets an annual sales target of $1bn.  Sales for 2022-23 are likely to amount to $800m.

But targeting US fans isn’t an original thought. The Premier League scored one of its biggest overseas media deals with Comcast’s NBC for $2.7bn over six years and toured America over the summer. Uefa also scored a record sum when selling the Champions League rights to US broadcaster Paramount last year.

The French league on the other hand lags behind and doesn’t carry the same international appeal.  It may not achieve its target of a €800 mn a season broadcast deal, compared with a Premier League deal worth €6.7 bn over four seasons.  Which is why the onus is on PSG to scale up in the States. America’s appetite for football is about to be tested.

 

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

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...
Post a Comment
Read more