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Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor Perez, Mike Pintar 1

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Page 1: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

Paris Saint-Germain Football Club Revenue Analysis

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

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Page 2: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

Overview

´ Team Snapshot

´ Match Day Revenue

´ Situational Analysis

´ Pricing and Ticket Strategy Analysis

´ Achieving Elite Status

´ Recommendations and Next Steps

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Page 3: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 4: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

Opportunities

´ Add other events at stadium to get premium customers

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

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Page 5: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 6: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 7: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 8: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 9: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 10: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

World Class Spend Comparison

Club Spend (Million Euros)

Chelsea 283.6

Manchester City 234.3

PSG 211

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Page 11: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

Current Revenue Mix 11

Page 12: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 13: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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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Page 14: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

How does PSG join the Elite?

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Page 15: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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

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Page 16: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

New Revenue Mix Post Renovation

22%

45%

33%

Future PSG Revenue

Commercial Revenue

Match Day

French TV

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Page 17: Paris Saint-Germain Football Club Revenue Analysis · Paris Saint-Germain Football Club Revenue Analysis Chicago Booth Consulting Recommendations Vishnu Kamath, Shane Nelson, Victor

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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