Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue...

Paris Saint-Germain Football Club Revenue Analysis

Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor Perez, Mike Pintar

1

Overview

´ Team Snapshot

´ Match Day Revenue

´ Situational Analysis

´ Pricing and Ticket Strategy Analysis

´ Achieving Elite Status

´ Recommendations and Next Steps

2

History ´  Failure to success story, wining two national cups, and other great Cups

´  Early 2000’s move to a losing record

´  Acquisition from Canal + to QSI

´  Great fan base eager to see future success

´  Nearly doubled season ticket holders from 16,000 to 30,000

Important Facts:

´  Valued (2012) at 100M Euro

´  Neighboring Population: 10 Million (no competition)

´  Stadium (Parc de Princes) undergoing luxury renovation expected to complete in 2016

´  In Sept. 2009, Paris Mayor announced 2016 UEFA Euro Cup to be played at Parc de Princes

3

Opportunities

´ Add other events at stadium to get premium customers

´ Board Struggles/Infighting ´ Turnover ´ Financial Losses ´ Stadium ´ Attendance ´ Online Sales

4

Match Day Revenue Aspirations

Ranking Club Earning (Million Euros)

1 Real Madrid 129.1

2 Manchester United 122.4

3 Arsenal 114.7

4 Barcelona 97.8

* Paris Saint-Germain 18.1

5

Situational Analysis Attendance has been generally declining, but beginning to rebound after the implementation of new rules to reduce Hooliganism

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Attendance 2000/01 to 2011/12

6

Pricing/Ticket Strategies Current Pricing Strategy

Raise Ticket Prices Online Sales Dynamic Pricing

Expected Attendance

30,000 25,000 35,000 45,000

Expected Matchday Revenue per Person

32.5 Euros/per game 42.5 Euros/per game 40 Euros/per game 40 Euros/per game

Benefits •  Fill Excess Capacity •  Reduce Hooliganism •  Attracts higher-end

customers

•  Accessibility •  Increases ticket pre-

sales

•  Full stadium •  Attracts marketing/

sponsorship •  Increase total revenue

Risks •  High number of unfilled stadium seats

•  Potential reduction in attendance

•  Increased price counteracted by reduction in sales

•  Adding infrastructure to support e-commerce

•  Potential lower revenue per person

•  Hooliganism on cheap tickets

7

Better Players

More Wins

More Sponsorship, higher league earnings, Increased attendance

Increased Revenue

Becoming a world-class team

´  Currently, #1 team in France

´  21M Euro Spend 2011

8

Pursuing World Class Status

Pros Cons

Higher Match Day Revenue Player Costs

Higher Commercial Revenue Coach Costs

Global Brand Awareness Success Not Guaranteed

UEFA Champions Revenue Years to achieve

9

World Class Spend Comparison

Club Spend (Million Euros)

Chelsea 283.6

Manchester City 234.3

PSG 211

10

Current Revenue Mix 11

Current Match Day Per Game Revenue Mix

´  Average Revenue is 32.5 Euros/person

´  Low - 50% of market purchases ticket only – 10 Euro / person

´  Mid - 35% of market purchases ticket and extra spend – 20 Euro / person

´  High - 15% of market purchases ticket and extra spend – 136 Euro / person

´  Total Match Day Revenue - < 1 Million Euro / game

´  Indicates need to penetrate the elite market

12

Current Match Day Revenue and Competitor Comparison

28000000

18100000

43000000

0 5000000 10000000 15000000 20000000 25000000 30000000 35000000 40000000 45000000 50000000

Current PSG Revenue (Euros)

French TV Match Day Commercial Revenue

Match Day Revenue currently provides an average of < $1MM/day, which is significantly less than that of elite clubs with a Match Day Revenue of $5-6.5MM

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How does PSG join the Elite?

14

Penetrating High net-worth market

´  Utilize renovation to add 7000 box seats for the high net-worth market (i.e. executives)

´  60% capacity (4200 box seats) on average per game and at a price of $500 yields:

18100000

58399000

0 10000000 20000000 30000000 40000000 50000000 60000000 70000000

Match Day Revenue (Euros)

Future PSG Current PSG

15

New Revenue Mix Post Renovation

22%

45%

33%

Future PSG Revenue

Commercial Revenue

Match Day

French TV

16

Moving Forward and the Next Steps

´  Short term:

´  Pursue online ticket pre-sales

´  Continue current investment amount in players

´  Long term:

´  Add 7,000 luxury box seats during renovations to penetrate high-end market

´  Maintain pricing structure on current tiers

´  More team victories to enhance brand

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