Swiss Ramble’s examination of Paris St. Germain’s finances can be roughly broken down as follows:
- PSG was fairly financially responsible prior to Qatari investment wing QSI’s takeover.
- PSG then spent a lot of money on transfer deals and wage increases.
- PSG will likely post loss of €92 million next season.
- PSG hopes to radically increase turnover in commercial revenues based on the glorious future success of the club in Ligue 1, and more importantly, the Champions League.
Not many surprises here, just a variation on the takeover of Manchester City. Yet the financial risk seems even greater, particularly as the club, as SR writes, will need to maximize commercial revenues in a relatively short period of time in order to prevent staggering losses year-after-year.
That will be tricky. While Man City was not among the traditional “big” English clubs, they’ve enjoyed some relative stability in the highly-popular and therefore TV rich Premier League since their last promotion in 2002. Their derby rivals are Manchester United, one of the biggest clubs in the world.
Paris St. Germain are one of France’s bigger clubs to be sure, but Ligue 1 is not among Europe’s bigger domestic tables. They are located in Paris, certainly, but while it’s a sexy draw for players, journalist, and investors, it’s not regarded as a global football capital along the lines of a Manchester or a Milan.
But this is likely part of the point. There were likely far safer clubs for QSI to invest in, but they chose one in the French capital. It appears these investments reflect a belief among Middle Eastern backers that competitive success in the short term can shore up loyalty to a global football “brand” without the need for a long, storied history. They can and will see their projects through to success, because they’re flush with practically limitless capital. They’re throwing away the traditional script, in which football “brands” as they’re now obnoxiously known are built over decades of history, not years of financial doping.
This could represent the new order in football, where clubs are bigger than their geographical or historical roots, the “global football model” mentioned a few days ago by NY Cosmos chairman Seamus O’Brien, a club owned by Saudia Arabia-based Sela Sports.
It will likely take more time than PSG has left to satisfy UEFA’s stringent Financial Fair Play regulations, which require clubs participating in the Champions League to break even, i.e. spend what the club earns as opposed to take cash injections from their backers. That will hardly matter; despite FFP’s safeguards against investor backing “by other means” (like Chelsea’s deal with Gazprom), PSG will find a way to play in the Champions League. But QSI, like ADUG, won’t be going anywhere in the next decade or two. By that time, chances are Manchester City and PSG will be household brands, whose shirts will be worn by fans from Australia to Austin.