Paris Saint-Germain’s excesses are just too great to be healthy

PARIS Saint-Germain look set to lose Kylian Mbappé this summer to Real Madrid, but the enormous wealth of the French champions means they will surely replace the young striker with another high profile signing. PSG’s financial advantages have brought them a multitude of top names and they currently have Neymar, Lionel Messi and Mbappé, but with their resources, PSG should be winning everything in France and challenging in Europe.

Their wage bill was € 500 million in 2020-21, around one third of the overall Ligue 1 total and more than € 350 million more than the nearest rival, Olympique Lyonnais, whose wages came to € 134 million. In 2020-21, PSG were beaten to the Ligue 1 title by Lille, whose player remuneration was around one sixth of the sum paid to the Parisians’ squad.

PSG’s finances make them the ultimate flat-track bully, but when they compete in the UEFA Champions League, they are found wanting almost every time. PSG’s problems stem from a lack of continuity around the management of the team and a culture of short-termism. Like Chelsea, their squad is a composition of various influences and they also have a penchant for attention-catching signings. Hence, the arrival of Messi and, for some peculiar reason, Sergio Ramos, both players past their prime, but undoubtedly enormously expensive.

The latest report from France’s DNCG (National Directorate of Control & Management), reveals French football was heavily impacted by the covid-19 pandemic in 2020-21. Only three clubs – Dijon, Reims and Saint-Étienne – made a profit and some of the losses were very eye-watering.

PSG’s loss, despite revenues of € 569 million (+2%), was € 225 million, the highest in France by some distance and the third highest in Europe after Barcelona (€ 550 million) and Inter Milan (€ 239 million). After PSG, whose losses climbed by € 100 million, the biggest loss in France was made by Lyon (-€ 109m), Marseille (-€ 76m) and Bordeaux (-€ 67m).

Like all French clubs, PSG’s matchday income was almost wiped out, but their bottom line figure was also influenced by a big reduction were in player trading which was down from a € 50 million profit to a near € 5 million loss. Profits on player sales are less important to PSG than rivals Monaco, Lyon and Lille, for obvious reasons, but there is clearly upside for the club if they choose to adopt a more commercial approach to transfers.

The club also incurred an increase in their already huge player costs. PSG’s wages were up by 21% to € 503 million in 2020-21, a wage-to-income of 88%.  According to L’Equipe, of the top 20 earners in French football, 18 are from PSG, with only Monaco’s Wissam Ben Yedder and Cesc Fabregas making up the list. The DNCG is keen to control the excesses of PSG, needless to say, and aims to stop any club having a wage bill of more than 70% of income. Another measure in progress is the restriction of debt, forbidding any club from having debt greater than share capital.

Broadcasting recovered in 2020-21 after the collapse of Ligue 1’s deal with Mediapro. Overall, TV accounts for 43% ( € 835 millon) of Ligue 1’s income and PSG generated over £ 200 million from this stream, a 54% rise on 2019-20. PSG have become very proficient commercially and their income totalled € 337 million. However, they are striving to push the envelope even further and hoped the acquisition of Messi would provide a significant boost.

Ligue 1’s total income was € 1.6 billion, but € 1.2 billion was paid out in wages and another € 119 million to agents and intermediaries. The league lost € 645 million, the total for Ligue 1 and 2 was a deficit of € 685 million.

PSG could be at the start of a new phase. The restrictions to be implemented will make it more difficult for the club to leverage its financial power and at some point, they will have to look at the way they build their teams. There’s also a good chance manager Mauricio Pochettino will move on and, with Mbappé and Ángel Di María certainly leaving, along with the possible departure of Neymar, times may be changing in Paris.

At the same time, France needs greater competition to improve the overall quality of Ligue 1. The country produces very good players on a regular basis, the national team are world champions and UEFA Nations League winners, but PSG are not always pushed enough. They’re still waiting for that first Champions League title, after all.