Dreaming Bigger Paris Saint-Germain Paris, July 2012 Prem Eruvbetine, Dexter Lam, William Katz & Alex Eakins University of Calgary
Issue 2 Revenue is based on number of people watching Tickets Broadcasting People buying branded merchandise PSG is a one person show in a one show league
Recommendation 3 Build up Ligue 1 Make the game more broadcastable Performance (Team) More Games are worth watching
Subsidiary Issue 4 Exciting games require more than one good team Other Ligue 1 teams need to be better Revenue mix Broadcasting (35%) room to grow with global reach Ticketing (20%) limited by stadium Commercial (47%) will grow with brand awareness Team performance High turmoil impacts performance Use Qatari / Arab connections to encourage foreign investment in other Ligue 1 teams Having more games that are exciting to watch will boost all sources of revenue Now have good assets Have persistence to make the team work
How did we get here? Alex
Alternatives 6 1. Build Ligue 1 2. Invest in team development 3. Invest in the stadium The big picture cannot be forgotten
Criteria 7 Commercial -sponsorship -hospitality -merchandising Ticketing Broadcasting These are the most important to future
Analysis 8 Commercial Ticketing Broadcast TOTAL 1. Ligue 1 Y Y Y 3 2. Team development N N N 0 3. Stadium N Y N 1 Build Ligue 1 in the long term will improve PSG
Short Term Implementation 9 Performance Coaches Strategic acquisitions Experience Worth watching Social media & contesting Key to improving the team AND ligue 1
How do we get that full stadium? 10 Encouraging season ticket holders Player meet and greets Contesting- Player for a day raffles Incentives to purchase part of the team All improves experience of game
What is the plan? Prem
How to strengthen Ligue 1 12 Improve quality of Ligue 1 games Improve quality of Ligue 1 teams Collaborate with lower leagues on French player development More access to better talent Use Arab connections to encourage foreign investment Shake up other teams the same way as PSG
Financial Projections strong growth across all revenue categories
Gross Profit Projections strengthening the Ligue helps the bottom line too
Income (cash) Payback of just 4 years!
Income Statement (Projected) 2011 2012 2013 2014 2015 2016 2017 2018 Commercial Fly Emirates 3.5 3.5 3.5 15.0 15.0 15.0 15.0 15.0 Nike 6.0 6.0 6.0 20.0 20.0 20.0 20.0 20.0 Other Mechandizing 2.0 5.1 5.3 5.4 5.6 5.7 5.9 6.1 Hospitality 4.2 5.5 5.6 5.8 6.0 6.1 6.3 6.5 Other 1.2 1.2 1.3 1.3 1.4 1.4 1.4 1.5 Sponsorship 11.1 15.1 15.5 16.0 16.5 17.0 17.5 18.0 28.0 36.4 37.2 63.5 64.4 65.3 66.2 67.1 Ticketing Income (tickets, ground media, merchasdise stalls, parking) Attendance 30000 40000 44800 50176 56197 62941 70494 78953 46 61 68 77 86 96 108 121 Broadcasting French TV 230 254 292 336 386 444 511 588 Broadcstng Revenues (~17%) 39.2 43.2 49.7 57.1 65.7 75.5 86.9 99.9 Total Revenue 113 141 155 197 216 237 261 288 Expenses 70% 70% 70% 70% 70% 70% 70% 70% Wages 79.10 98.47 108.70 138.09 151.13 165.85 182.49 201.31 Gross Profit 33.90 42.20 46.59 59.18 64.77 71.08 78.21 86.27 Player Spend - 2.00-96.00-20.00-20.00-20.00-20.00-20.00-20.00 Community Investment - 4.00-4.00-4.00-4.00-4.00-4.00-4.00-4.00 Other Spend - 11.3-14.1-15.5-19.7-21.6-23.7-26.1-28.8 Cash Flow 16.60 (71.87) 7.06 15.46 19.18 23.39 28.14 33.52
Risks & Mitigations Will
Risks & Mitigations Risks Impact Likelihood Mitigation Price of Oil declining Loss of Football advantage High High Broadcasting Reduce over priced player acquisitions Run as business not fantasy football Low High You are selling competition Build up Ligue 1 Strategic player acquisition Retention of coaches Bidding War Medium High Stop of high priced player acquisition Stop devaluating current talent Work with Foreign investment connections
What not to do! 19 High priced player acquisition u This is a business u Increased costs u Competitive response u Starts bidding war
What not to do! 20 Make tickets difficult to access u Currently not filling the stadium u Creating demand will come on the field
What not to do! Invest in stadium u Let the city do the investing u Lease is up u Mayor wants 2016
Outside the box 22 u In-house gambling u Huge revenue potential u Generates fans u Look into public procedures and policies- lobby if necessary u Leverage relationship with city
You asked us: 23 How do you increase season ticket sales? How to increase revenue? Short term wins with long term strategy
Recommendation 24 Build up Ligue 1 Make the game more broadcastable Performance (Team) More Games are worth watching