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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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