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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.

 

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