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PSG Financial Numbers Look Strange

Ibra PSGAccording to figures released by French soccer’s licensing authority, the DNCG, Paris Saint-Germain reported a loss of €5.5m for the 2011-12.

Considering that since  the Qatar Investment Authority in 2011 bought PSG in 2011 that they have spent more money on players than any other team in Europe, a loss of only €5.5m seems unusually small.

And it is, because PSG reported €125.4m of income from “other products”. Le Parisian newspaper in December reported that the team has an agreement worth between €150 million and €200 million per season with the Qatar Tourism Authority, and that it could be back dated to when the new owners took control.

Obviously it was been backdated, because without that “sponsorship” agreement, PSG would have reported a world record loss of around €135m.

And that loss does not take into consideration this summer spending spree that landed PSG the likes of Thiago Silva and Zlatan Ibrahimovic.

PSG do not have the traditional revenue streams to meet the club’s ambitions. Combined, matchday revenue, media rights and sponsorships only brought in €97m last year. For a club that has one of of Europe’s biggest cities to itself, that is an incredibly low number.

PSG are on course to be the first real test of UEFA’s financial fair play rules. UEFA’s rules allow teams to have a maximum loss of €5 million, or as much as €45 million as long as the deficit is covered by an equity contribution, over two years through 2013.

There is no way that PSG can meet those numbers. What PSG will do instead is say that the agreement with the Qatar Tourism Authority is legitimate.

“Paris would have to show quite a lot of evidence what value sponsors get from such a massive investment,” Daniel Geey, a lawyer at London-based Field Fisher Waterhouse who specializes in sport, said in an interview. “It will have to be assessed to see if it’s fair value. That becomes tricky if there aren’t any comparable.”

And it looks like PSG owners will not let FFP stand in the way of them buying more stars this summer:

“It’s necessary to become one of the great European clubs,” PSG President Nasser Al-Khelaifi told France’s L’Equipe newspaper in January. “Other clubs have invested for 20 years. We have been there for a year and a half and now we must stop pouring money? It would be unfair.”

Do you think that Uefa will stand up to a club the size of PSG and ban them from the Champions League or is PSG’s spending an indication at how toothless teams view FFP?

 

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