Ligue 1’s financial mistral

FRENCH football has already revealed that it is in chaos, the collapse of its € 3.25 billion TV deal with Chinese-Spanish broadcaster MediaPro has been well documented, but the financial state of the member clubs in Ligue 1 and 2 is worrying. Some less optimistic market watchers have suggested there are a number of clubs that could collapse, and big names like Bordeaux have already shown they are not immune from tip-toeing towards the abyss. 

Bordeaux have changed hands, but some analysts believe French football has become so unattractive that almost every Ligue 1 club is currently for sale. Others, such as Marseille’s president, Jacque-Henri Eyraud, consider the league is no longer sustainable in its current format and needs reducing from 20 teams.

More to come

Indeed, Jean-Marc Mickeler, the head of the regulator, Direction Nationale du Controle de Gestion (DNCG) has warned: “The worst is yet to come. In two seasons, French clubs have lost € 700 million in revenues…many clubs are at the end of their ability to plug the holes, so we cannot exclude there will be bankruptcy filings…there are no longer any financial institutions or funds that will agree to finance French football.”

The league has only just released the club financial statements for the aborted 2019-20 season, a decision that seemed rather knee-jerk to some and one the league may now regret. Ligue 1 ended with half a dozen rounds of matches still to play, with Paris Saint-Germain awarded the title. The club statements made horrifying reading in some cases, but Mickeler is probably correct – 2020-21, after all, was in effect a season played behind closed doors. To make the mood gloomier, France’s national team, Les Bleus, fell short in the Euros, surprisingly losing on penalties to Switzerland in the last 16.

Ligue 1’s continual problem is that it has been a one-horse race since Paris Saint-Germain became Qatari-owned, although Lille’s stunning 2021 title success indicates that surprises can still happen in the most imbalanced of leagues. Slighted by their failure to win yet another championship, PSG will now spend heavily to put Lille and any other contender in their place. The reinforcements have already started to arrive in the form of Euro 2020 star Gianluigi Donnarumma (AC Milan), Inter Milan’s Achraf Hakimi, Georginio Wijnaldum of Liverpool and Sergio Ramos from Real Madrid. There will surely be more to come before the 2021-22 season gets underway.

PSG’s revenues in 2019-20 totalled € 560 million, which represented around a third of Ligue 1’s entire income. Nobody comes remotely near that figure, Lyon are closest but their earnings total just € 181 million. Clearly, PSG should win the league every season with an advantage of that size. But even the mighty are vulnerable during a pandemic. PSG’s revenues fell by 15% in 2019-20, with media income down by 25% despite a Champions League run that ended in the final, and matchday was some 25% lower.

France’s top three clubs by revenue also includes Marseille, and between them, they account for 54% of Ligue 1’s total. Overall, the league saw income down by 15% to around €1.6 billion. 

Ligue 1 needs to worry about its lack of profitability, which eluded nine of the league’s 20 clubs in 2019-20. Operating losses affected all but Saint-Etienne and combined came to over € 900 million. Pre-tax losses came to more than € 250 million, the highest being PSG’s € 125 million, followed by Marseille’s € 97.8 million. Bordeaux and Lyon’s losses amount to more than € 35 million apiece.

But worryingly, Ligue 1’s wage bill still continued to rise. The total for the league was €1.4 billion, compared to € 1.37 billion in 2018-19 – a 3.6% increase. Predictably, PSG’s wage bill dwarfed the rest of the league and, at € 414 million, represented well over a quarter of the total. 

Lower income and higher wages resulted in a substantial increase in the wage-to-income ratio among Ligue 1 clubs, a rise of almost 16 percentage points. Six clubs paid out more than they earn, including Rennes, Nice and Bordeaux, while the average for 2019-20 was 89.5%. 

Sale fever

Ligue 1’s problems have triggered the prospect of a “fire sale”, with scores of big clubs now circling France in search of bargains. Naturally, Lille’s title-winning team will be picked over like vultures at a carcase just as Monaco’s 2017 champions were dismantled, while others, such as Houssem Aouar, Pape Sarr, Boulaye Dia, Boubacar Kamara, Jeremy Doku and Eduardo Camavinga, will also be on the radar of Premier League clubs. France has long been a target market for clubs from the other major leagues and French clubs have benefitted financially from selling talent. 

The Euro 2020 squad of 26 included 20 players employed by clubs from England, Germany, Spain and Italy. Players like Kylian Mbappé, Kingsley Coman, Antoine Griezmann and Raphaël Varane are among Europe’s most coveted players, but with the exception of Mbappé, they play abroad.

In such a troubled and uncertain environment, can a club like PSG hang on to its star players who are ambitious and yearn for the big prizes such as the Balon d’Or and UEFA Champions League? Even Mbappé’s future has been under discussion, as it is at the end of every campaign he stays in Paris. How long will he be satisfied to play in a competition that may see its status further erode? If the likes of Mbappé leave and other young stars opt for England, Spain or Germany, then PSG will be more appealing to veteran names on a retirement tour.

If this current crisis prevails, the league must be hoping the tie-up with Amazon proves successful and helps the clubs navigate their way through to the other side. There is another hurdle, needless to say. Canal+, who were originally sub-licensed from MediaPro’s partner, beIN, are unhappy about Amazon’s involvement and have said they will not broadcast Ligue 1 football. A solution has to be found soon, coupled with better financial management and greater transparency, to restore some stability, because France’s domestic game is in danger of losing ground and its ability to attract big names. 

@GameofthePeople

Marseille’s African venture is bold, but what of the future?

OLYMPIQUE MARSEILLE (OM) are the only French team to have won the European Champions League and they happen to be the best supported club in Ligue 1. Marseille is a classic football city, full of passion that can overheated at times, a cosmopolitan place, colourful and edgy and a little extreme. The events of the past week around OM show what happens when the tension breaks, from the storming of the training ground to the reaction of coach André Villas-Boas and his employer.

Marseille are off the pace in Ligue 1 this season and the fans are unhappy, not just with the performance of the team, but also with the club’s owner, Frank McCourt, who was rumoured to be on the verge of selling OM to the same Saudi Arabian investor that wanted to purchase Newcastle United. McCourt has, once again, denied this is the case, but this story will just not go away. 

In a press release issued on February 5, McCourt said: “My commitment to OM, its employees, the City and the people of Marseille is total. I will remain, along with the entire management of OM and its President, Jacques-Henri Eyraud, committed to seeing this project through to the end. We owe it to OM and its history, past, present and future. I also wonder about the origin of these repeated campaigns of disinformation and wonder who benefits from these manipulations”.

Meanwhile, OM’s troubled season, which actually started quite reasonably, got worse with a 2-0 home defeat at the hands of Paris Saint-Germain. They have now lost six of their last 10 games.

The empty stands at the Velodrome clearly advertise the OM Africa campaign that was launched in December 2019. The continent has long been an attractive place to pick-up promising talent and OM themselves have benefitted from the city’s close association with Africa. Players like Abedi Pele, George Weah and Didier Drogba are just three of the many past OM players who have emerged from Africa.

OM are hoping to leverage African football for two main benefits – to attract new fans to the OM brand and also to develop young talent. The club reckons there are close to four million fans on social networks across Africa that can be tapped into. OM are a relatively popular club but the likes of Real Madrid, Manchester United, Arsenal and Liverpool have a much stronger level of awareness among football fans in French-speaking Africa. OM have also opened soccer schools in Nigeria, Tunisia, Algeria and Morocco. The project is also concerned with educational development and social programmes.

One of their most innovative ideas was to unveil spectacularly colourful leisure wear in the form of art-influenced shirts reflecting the colours of some African countries. Doubtless these are now highly sought-after products among shirt collectors. This has undoubtedly helped to increase OM merchandise sales in Africa.

Finding good value young talent may be an important element in the OM Africa programme. OM lost € 91 million in 2018-19  – the biggest loss in French football history – and one can only assume things will be worse when the 2019-20 figures are made public. The club’s wage bill in 2018-19 was 98% of income and their accumulated losses since 2016-17 amount to € 212 million. OM have committed to limit losses to € 30 million for 2019-20, but the pandemic may have made that target unrealistic. There’s no doubt that this level of losses and wage to income ratios are unsustainable.

OM have disappeared from view in reports that rank clubs by their financial performance, but 10 years ago, they were in the top 20 of Deloitte’s Football Money League. At the same time, from winning Ligue 1 in 2009-10, they have been pushed into the shadows by the rise of their arch-rivals Paris Saint-Germain. Last season, they finished runners-up for the third time in 10 years, but they were 10 points behind PSG.

The club’s financial challenges means spotting and nurturing talent will be an important part of OM’s future – that’s where their African venture can surely deliver benefits.

French Ligue 1 clubs have an average of almost six players from Africa in their first team squads in 2020-21, with Metz and Dijon employing 15 and 12 respectively. Senegal, which has around 200 players around Europe, has roughly 20 playing in Ligue 1. Algeria, Mali and Ivory Coast are among the leading player exporters to France.

OM believe that Africa should be a prime target market and as such, they are attempting to reach out to various countries across the continent in order to connect on an emotional and cultural level. There are 150,000 people in the Marseille area with African ties. The city has always had a high level of diversity and today, around 38% of the population are Catholic, 25% Muslim, 7% Protestant and 5% Jewish. Approximately 40% of under-18 year olds in Marseille are of North African origin. All over the city, the North African influence is very evident.

There is another cloud on the horizon and that is the future of OM’s ground, the Stade Vélodrome, which the local mayor, Benoît Payan has said he wants to sell as it costs the city too much money. He has said he would sell it to OM if they want it.

Once the future of André Villas-Boas has been established, OM will probably need a new coach. Media reports suggest that Maurizio Sarri, another former Chelsea manager, has rejected preliminary enquiries from the club.

What will it take to return Marseille to somewhere near the top of French football? This is a huge club, they have the raw material to be a European giant, but they have to stop losing money. Whether they can achieve that under the current administration remains to be seen, but any potential new owner will be aware that a club with a regular 50,000 audience, passionate backing and a hotbed of a city can achieve a whole lot more. The link-up with Africa could play an important role in that mission.

Photo: PA Images