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The striking transformation of PSG

Having brushed aside Liverpool’s creaking defence and a slot machine no longer paying out, Paris Saint-Germain faces an exciting Champions League semi-final test against Bayern Munich.   The success of PSG comes against the backcloth of a Ligue 1 which is the most troubled of the top five European leagues.   Once one leaves behind a small number of clubs, the standard falls away rapidly.

From his Zurich fastness, the Swiss Ramble casts his usual forensic eye over the club’s finances, much more detail and depth available on his Substack page.  He makes some interesting comparisons with other leading European clubs which are of interest given the relative failure of Premier League clubs.

Paris Saint-Germain’s 2024/25 accounts covered a season that the club not unreasonably described as “the most successful in our history”, as they won (deep breath) the UEFA Champions League, the UEFA Super Cup, a 13th Ligue 1 title, a 16th Coupe de France and 13th Trophée des Champions.

The only trophy they missed out on was the FIFA Club World Cup, and even there they reached the final.

The seriously impressive success on the pitch was a vindication of the club’s decision to switch from its “Galacticos” model, following the departures of Lionel Messi, Neymar and Kylian Mbappé.

The lavish spending was backed by the owners, Qatar Sports Investments (QSI), a subsidiary of Qatar’s sovereign wealth fund Qatar Investment Authority (QIA), who acquired PSG in 2011, instantly making the club by far the richest in France and one of the wealthiest in the world.

For many years, QSI had followed a strategy of filling their team with expensive superstars, which delivered the domestic title season after season, but had not worked so well on the international stage.

Despite all this good news, the fact remains that PSG still lost €40m before tax, largely because profit on player sales dropped €115m (63%) from €181m to €66m, though the net loss was smaller than the previous season’s €56m.

Following last season’s improvement, PSG’s €40m pre-tax loss was no longer the worst in France, as four other clubs posted larger deficits, namely Lyon with an awful €209m, Marseille €103m, Strasbourg €78m and Nice €41m.

French clubs have traditionally tried to be financially sustainable, but they were hit last season by the collapse of TV rights, so only six managed to generate a profit last season. Five of them made less than €7m, with Lille a big outlier, as they reported a hefty €101m profit.

PSG had actually reported pre-tax profits in four of the five years before COVID struck, but they have lost an enormous €929m in the six years since then.  The club is optimistic that it will break-even this season, though it had said much the same thing a year earlier.

There is certainly room for improvement, as PSG’s €929m loss in the last six years was just about the worst in Europe, only “beaten” by Barcelona’s €1.1 bln (having excluded the gains arising from their economic levers).   That said, only two Money League clubs made money in this period: Bayern Munich (of course) and Manchester City.

PSG’s revenue only increased by 4% last season, but it has grown by €167m (25%) in the last three years from €670m to €837m, largely driven by broadcasting (aka success on the pitch).  PSG’s €243m broadcasting revenue was easily the highest in France, more than twice as much as the three other Champions League representatives: Lille €101m, Monaco €82m and Brest €61m.  French football has a major issue with its TV rights, so clubs in Ligue 1 have had to contend with a significant reduction in their broadcasting income.

One way that PSG have compensated for low domestic TV rights is with money from the Champions League, especially last season, where they earned €144m after thrashing Inter 5-0 to win this prestigious tournament for the first time.   The Swiss Ramble estimates that PSG have already earned €121m for reaching the Champions League semi-finals, made up of €18.6m participation fee, €58.1m prize money and €44.1m value pillar.

PSG’s €367m commercial income is now sixth highest in Europe, only behind Real Madrid €594m, Barcelona €522m, Bayern Munich €461m, Manchester City €408m and Manchester United €397m.

PSG have hugely benefited from their slicee of the deal signed in April 2022 with investment fund CVC Capital Partners, who paid €1.5 bln for a 13% share of the commercial subsidiary set up by the French league to support football development.

PSG’s €177m match day income was the fifth highest in Europe, only surpassed by Real Madrid €233m, Barcelona €210m, Manchester United €191m and Arsenal €183m.  The club pointed out that this had been achieved despite the stadium only having a 48,000 capacity, which is a lot smaller than its European rivals.

The club seemed to be firmly on the path to building a new stadium with the most likely locations being Massy and Poissy, i.e. two towns in the suburbs.However, there may be a twist in the tale, as the new Socialist mayor of Paris, Emmanuel Grégoire, appears more open to making an agreement regarding the purchase and expansion of the Parc des Princes than his predecessor.

PSG’s wages significantly decreased by €124m (19%) from €659m to €535m, the lowest for four years, following the departure of Mbappé.

PSG have been one of the biggest spenders in the transfer market on the European stage, though their €1.0 bln gross spend in the five seasons up to 2024/25 was less than half of Chelsea’s €2.3 bln.   Three other English clubs splashed out more than the Parisians: Manchester City €1.3 bln, Manchester United €1.3 bln and Arsenal €1.1 bln.

PSG’s €287m debt is on the low side for European elite clubs, miles below the likes of Real Madrid €1.5 bln, Barcelona €1.5 bln, Tottenham €1.1 bln and Manchester United €758m. The first three are largely to finance stadium development, while United’s borrowings are from the lingering effect of the Glazers’ leveraged buy-out.

PSG have benefited from significant financial support from their owners, Qatar Sports Investments (QSI), as evidenced by the €250m capital injection in 2022/23, which took the total funding in the last decade to €961m.

The Swiss Ramble concludes, ‘Perhaps the most striking transformation is the way that PSG are regarded by those outside the club.  The rest of Europe had greatly enjoyed laughing at their regular collapses in the Champions League, but last season’s victory was widely acclaimed, as Luis Enrique’s dazzling young side thrilled most fans.

 

 

 

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