Ligue 1 club, Paris-Saint Germain just can’t stop spending money! The Parisian club have acquired three new players recently, at an initial cost of around £100 million.
They signed Uruguayan striker Edinson Cavani from Napoli for around £52 million, when even Chelsea’s Roman Abramovich wouldn’t put up the cash. They also paid nearly £30 million for Roma’s 19 year old Brazilian centre back, Marquinhos, making him the fifth most expensive defender of all time. Last but not least they signed young full-back Lucas Digne from LOSC Lille for around £15 million.
Edinson Cavani’s switch to PSG is the one most people are excited about. There isn’t really a lot to say about Cavani that most of you reading this don’t already know. He is a big, powerful, fast striker with incredible stamina. He works very hard for his team and is an excellent goal scorer. PSG already have a world class superstar in Cavani, but they also have two great young defenders in the making.
19 year old, Brazilian, Marquinhos has already been tipped to be the man that replaces Thiago Silva at PSG and Brazil, although the current Brazilian captain is only 28 years old. Marquinhos is obviously a great talent, but making him the fifth most expensive defender ever is ludicrous. They paid nearly £30 million for a player who has had only played for one season in one of Europe’s top leagues, or any European league for that matter. The most astounding thing is that Roma paid just £3.5 million for Marquinhos 12 months ago, meaning that they have made a return almost 10 times on the investment, very good business.
You could call Lucas Digne a cheap buy for PSG at just £15 million, an amount that they are used to exceeding. Digne is a very talented young left back, at just 20 years old he has a lot of time left to develop and could well become one of the best left backs in the world. Although much like Marquinhos he doesn’t have a great deal of experience, although at just 20, you can’t really expect him too. He has played 62 times for LOSC Lille, with 44 of these appearances coming last season. At £15 million I would say that this is still a little pricey, but overall a good transfer.
If you include these three players, Paris-Saint Germain’s total outlay comes to a whopping £327,268,000 since the summer of 2011. PSG was formed in 1970 and has rarely been a profitable club, before the Qatari takeover PSG had recorded loses for over a decade. Just the year before the take over the Paris based club made a loss of £25 million. Therefore PSG are surely in major debt, but according to their financial statements for 2011/12. Almost everyone was surprised to find that the club only made a loss of around £5 million in the first year under the new owners. However we now know one possible reason for this, rather than booking transfer fees in the year the player was acquired clubs can write-off the fee over the life of the player’s contract. This means that the £100 million for their three new players would be written down as £24.6 million a year, assuming that each of the players signed a four year contract.
However it still seems strange that PSG’s lose went down by £20 million in 12 months, although they spent substantially more money on players wages, as well as transfer fees. In fact overall expenses at the club(not including transfer fees) rose by £83 million. Therefore to reduce their year to year loss PSG had to increase their revenue by around £105 million in just one year, which is rather unbelievable.
So where did PSG get this money from? The commercial deal’s dropped by £12 million, TV revenue was up by £1.8 million and Gate receipts were up by £6 million. That amounts to an overall loss of £4.2 million, rather than an increase of £105 million. The increase in revenue did not come from what might be described as regular football and associated activities. It was down to an insightful website (financialfairplay.co.uk) to identify where this revenue was coming from.
Line four of PSG’s financial statement for 2012 has “Autre produits” (other revenue) of £81 million or £105 million, that means over 50% of revenue came from money that the owners had. However financialfairplay.co.uk has another explanation. Financialfairplay.co.uk makes a pretty good case that the other revenue is actually from avery questionable deal made between PSG and the Qatar Tourism Authority. Announced in late 2012 the deal was reported to be worth around £600 million over 4 years. The value of the deal is larger than anything else seen in world football and what is more confusing is that the QTA doesn’t seem to get much for their money. No naming rights and no kit deal, all PSG is obliged to do is to help promote Qatar as a tourist destination.
Although how can PSG hope to get away with something like this when UEFA Financial Fair Play (approved and signed off by over 200 of Europe’s leading clubs) with 2012 as the first year of monitoring? This question will probably not be answered until 2014 when it is expected that the independent Club Financial Control Panel completes the review of clubs’ statements for 2012 and 2013 and assesses one of nine possible sanctions on offenders, the legitimacy of the PSG/QTA deal will be central to the Control Panel’s review.
All smiles at Paris Saint-Germain…for now a least!