Lyon - All The Young Punks

At the beginning of the 2014/15 season very few analysts expected Lyon to be among the front-runners in Ligue 1, given that they had just changed their manager, replacing Rémi Garde with Hubert Fournier, and spent virtually no money. However, their exciting young side led the table for a lengthy period before finishing in a highly creditable second place behind the expensively assembled Paris Saint-Germain, thus qualifying for the Champions League.

Expectations were on the low side, as Les Gones had endured much disappointment in the previous two seasons, failing to reach their previous heights by only finishing 3rd and 5th in the league. This might not sound too bad, but remember that Lyon had won the league seven times in a row between 2002 and 2008.

They had also enjoyed 12 consecutive participations in the Champions League, but their recent European adventures have been restricted to the Europa League. It is true that they reached the quarter-finals of this competition in 2013/14 before being eliminated by Juventus, but last season they did not even manage to get past the qualifying stages.

After Lyon’s many years of success, based on a “buy low, sell high” model skillfully executed by their respected chairman Jean-Michel Aulas, the club decided to change their strategy in an attempt to move to the next level: “Our ambition is to move closer to the major European clubs, by putting priority on investment rather than an immediate net profit.”

"Come on, Alex, you can do it"

Initially, the plan seemed to be working as Lyon reached the Champions League semi-final for the first time in 2010, but ultimately the inflated spending on the likes of Yoann Gourcuff, Lisandro Lopez, Aly Cissokho, Michel Bastos and Bafetimbi Gomis spectacularly backfired. Far from elevating the club to elite level, this approach plunged Lyon into disarray.

The financial challenges posed by the over-expenditure have been exacerbated by the money invested in building a new stadium. While this will make a significant, positive difference to Lyon once it is finished in early 2016, it has been a substantial drain on resources and will end up costing more than €400 million.

Nor have Lyon been helped by the arrival of wealthy new owners at Paris Saint-Germain in 2011. The influx of Qatari money has produced an uneven playing field, so it is no great surprise that PSG have dominated the French league, winning the title for the last three seasons. To a lesser extent, it is a similar story at Monaco.

These difficulties have forced Lyon to change track again and they are now focusing on youth in a quest to cut costs. The club’s recent financial performance emphasises why they need to follow a more sustainable strategy, as they have reported a series of hefty losses. In 2013/14, the last season for which we have annual published accounts, the club made a pre-tax loss of €28 million (€26 million after a tax credit).

As Aulas somewhat drily commented, “We were not able to achieve our objective and return to break-even.” In fact, the result was £8 million worse than the previous season’s loss of €20 million, despite making steep cuts in personnel costs and player amortisation/impairment of €17 million.

This was largely due to two specific factors: (a) profit on player sales was €19 million lower at just €5 million, which Aulas explained thus, “we did not complete the plan to sell player registrations worth €20 million, because certain players changed their minds or were injured”; (b) other expenses were €9 million higher, including a €6 million charge for the exceptional “75% tax” on high salaries, which was voted in with retroactive effect.

The damage was limited by a €3 million increase in revenue to €104 million, largely as a result of more prize money from the Europa League, partially offset by a reduction in commercial income and domestic TV money.

This poor financial result was the worst in Ligue 1 in 2013/14. Although no fewer than 14 of the 20 clubs in France’s top flight reported losses, Lyon’s €28 million was far ahead of the closest challengers: Sochaux €18 million, Lille €16 million, Rennes €15 million and Marseille €13 million.

In fact, Lyon have the unenviable record of producing the largest loss in Ligue 1 for each of the last five years (from 2010 onwards). The chances are that Lyon will also make a reasonably large loss for the 2014/15 season, given that they reported a €9 million deficit for the first half. Although they have continued to reduce wages and player amortisation, revenue from the Europa League will be negligible, while there have been no player sales of any note to compensate.

Lyon’s P&L statement over the last decade is like the proverbial game of two halves: five years of solid profits between 2005 and 2009, as Lyon’s business model was the envy of most other clubs; then five years of large losses between 2010 and 2014, as their expansionary approach failed to deliver. That’s €110 million of profits, followed by €176 million of losses, which is a big deterioration in anyone’s books. As Elvis Costello nearly said, “Five years in reverse.”

Lyon’s profits were historically driven by profits on player sales, as noted by the annual report: “The player trading policy forms an integral part of the club’s ordinary business activities.” This usually involved selling players to clubs “with significant purchasing power” such as Real Madrid, Barcelona and Chelsea.

However, this all changed in 2010: in the preceding five years Lyon generated €245 million of sales proceeds with a profit of €181 million, but this dipped to €103 million sales proceeds in the last five years with a much reduced profit of €55 million.

The slowdown in trading activity can be attributed to a number of factors with the club itself noting the impact of “the worldwide recession and the implementation of UEFA’s Financial Fair Play (FFP) rules”, but much of this is also down to Lyon taking their eye off the ball. They are a long way from the boast made in 2007 that “revenue from player trading has confirmed its recurrent nature over the long-term.”

Two transfers to London clubs illustrate the fact that Lyon had rather lost its touch: in 2006 Aulas managed to negotiate an impressive €36 million from Chelsea for Michael Essien, but he secured less than €10 million for Hugo Lloris from Tottenham seven years later.

The last mega money transfer was Karim Benzema to Real Madrid for €35 million back in 2009, while Lyon have actually lost money on some transfers, e.g. Abdul Kader Keita was purchased from Lille for €16.8 million, only to be sold to Galatasaray for half that amount, €8.4 million; similarly Jean II Makoun was bought from Lille for €14.6 million, but sold to Aston Villa for just €6.1 million.

Once the poster boy for successful player trading, Lyon are clearly no longer one of the best in this activity. In fact, their profit from player sales of €4.8 million was only the 10th highest in Ligue 1 in 2013/14, even behind the likes of Evian and Lorient. While it might be fair to say that economic conditions have reduced the chances of French clubs making big money on player sales, that did not prevent four of them generating double-digit profits: Lille €32 million, Paris Saint-German €23 million, Saint-Etienne €20 million and Toulouse €19 million.

Things look little better for Lyon in this area in 2014/15, as noted by the report for the first nine months of the financial year: “Proceeds from the sale of player registrations totaled €3.9 million, an historic low, as the Board of Directors had decided to postpone the plan to sell registrations last summer in favour of the season’s sporting performance.” And that’s the point: it’s a tricky balance for Lyon to get their finances right, while at the same time striving to do well on the pitch.

The other side of the coin is that Lyon have significantly reduced player purchases, as shown by the sharp reduction in player amortisation from €41 million in 2011 to just €15 million in 2014.

As a reminder, player amortisation represents the annual cost of expensing player purchases. To clarify this point, transfer fees are not fully expensed in the year a player is purchased, but the cost is written-off evenly over the length of the player’s contract – even if the entire fee is paid upfront. As an example, Yoann Gourcuff was bought from Bordeaux for €22.4 million on a five-year deal, so the annual amortisation in the accounts for him was €4.5 million.

Lyon’s €15 million player amortisation was still the 4th highest in Ligue 1 in 2013/14, but miles below PSG’s €113 million, which highlights the fact that the Parisian club is at the other end of the spectrum when it comes to buying players. In the same vein, Monaco’s player amortisation was €51 million, while Marseille (perhaps a more reasonable comparison) were also ahead of Lyon with €18 million.

However, not all of Lyon’s problems are due to player trading, as the profitability of their core operations has also been declining. This can be seen by looking at the club’s EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation), which can be considered a proxy for the club’s profits excluding player trading, which has plummeted from €20 million in 2006 to minus €12 million in 2014. The trend is most certainly not their friend in this case.

In fairness, very few French clubs achieve a positive EBITDA, but Lyon’s is still one of the lowest. To put this into context, Manchester United’s EBITDA of €182 million was nearly €200 million higher, which is a huge difference - every season.

Lyon’s revenue rose €3 million (3%) from €101 million to €104 million in 2013/14, largely due to a €4.7 million (9%) increase in broadcasting to €56 million with Europa League receipts up €6.2 million to €13.3 million, while domestic TV money was down €4.7 million to €43 million. Ticketing revenue was up €0.7 million (6%) to €13 million, but commercial income was down €2.4 million (6%) to €35 million.

Despite the increase in 2014, revenue has fallen by a third (€51 million) from the €156 million peak in 2008 with all revenue streams decreasing: commercial by €24 million (40%), broadcasting €19 million (25%) and match day €9 million (40%). Most of the decline in commercial income has come from brand-related revenue, partly influenced by a series of once-off payments, e.g. Sportfive paid €7 million a year from 2008 to 2011 after Lyon outsourced its marketing rights to them. The decrease in broadcasting is very largely because of lower prize money from European competitions.

Lyon’s revenue of €104 million is still the 4th highest in France, behind PSG €474 million, Monaco €176 million and Marseille €132 million. PSG are miles ahead of all other French clubs, heavily boosted by their commercial deal with the Qatar Tourism Authority. Lyon themselves are a long way ahead of the clubs behind them, such as Lille €69 million, Bordeaux €67 million, Saint-Etienne €53 million and Rennes €43 million.

The Deloitte Money League is a useful barometer for Lyon’s revenue decline, as they were as high as 11th in 2006 and 12th in 2008, but are not even in the top 30 clubs in the latest edition, which features only two French clubs: PSG and Marseille (note: for some reason Monaco are not included even though their revenue per the DNCG Comptes Individuels des Clubs would place them in the top 15).

While Lyon’s revenue has decreased by €51 million since 2008, the leading European clubs have all seen their revenue grow by nearly €200 million in the same period: Bayern Munich €193 million, Manchester United €193 million, Real Madrid €184 million and Barcelona €176 million. French clubs will continue to struggle, especially compared to English clubs, as their TV deal continues to lag their colleagues across the Channel.

Nevertheless broadcasting accounted for 54% of Lyon’s revenue in 2013/14, up from 51% the previous season, with commercial income’s share falling from 37% to 34%. Match day remained unchanged at 12%.

Lyon’s domestic TV revenue was €1.5 million (3%) lower in 2013/14 at €43 million, including €41 million from Ligue 1. The distribution model for French TV money is relatively equitable with 50% allocated as an equal share, while the remainder is distributed based on league performance 30% (25% for the current season, 5% for the last five seasons) and the number of times a team is broadcast 20% (over the last five seasons). Lyon were only surpassed by PSG €45 million (due to them winning the league) and Marseille €42 million (more games shown live).

The Ligue 1 TV deal is actually 5% lower at €637 million from the 2014/15 season (the second half of the four-year agreement), comprising €604 million for domestic rights and just €33 million for international rights. A new four-year deal with Canal+ and BeIN Sports will increase domestic rights from the 2016/17 season by 24% to €748.5 million, while the international rights will rise 142% to €80 million in a new six-year deal with BeIN Sports from the 2018/19 season. That will take the total TV deal to €829 million, but this pales into insignificance compared to the new Premier League deal, which is estimated to be worth €3.8 billion a season from 2016/17.

The other element of broadcasting revenue is prize money from UEFA competitions, which rose €6 million from €7 million to €13 million in 2013/14, thanks to Lyon reaching the quarter-finals compared to the last 32 the previous season. In fact, thanks to a large TV pool payment, Lyon’s €10.2 million in prize money was the second highest received in the Europa League, only behind Sevilla’s €14.6 million. The €13.3 million booked in Lyon’s accounts also included €2.1 million for the Champions League play-off match and £0.9 million additional payment from the 2012/13 competition.

That’s not too bad, but it is a lot lower than the money clubs received in the Champions League, e.g. Marseille earned €32 million even though they lost all six of their group games. Lyon’s best performance in the Champions League came in 2010 when they reached the semi-final, which was worth €29 million in prize money. However, they have missed out on recent improvements in the TV and marketing rights, as can be seen by PSG receiving an impressive €54 million for reaching the quarter-final in 2013/14.

Unfortunately the 2014/15 accounts will include minimal revenue from Europe (€2 million in the first nine months’ accounts), as Lyon lost in the Europa League play-off.

"Take it to the Max"

After Lyon’s profits from player sales dried up, the loss of revenue from the lucrative Champions League was the final nail in the coffin. In 2012/13 the club estimated that the absence from Europe’s premier competition had cost them around €20 million, including gate receipts and the impact on commercial deals. Little wonder that the annual report stated, “Our on-the-pitch objective is to return as quickly as possible to the Champions League.”

The fact is that Lyon desperately need to play in the Champions League to generate more revenue, so the qualification for the 2015/16 tournament is massively important, especially as the new TV deal will increase revenue by more than 30% from next season.

Lyon’s gate receipts rose 6% (€0.7 million) to €13 million in 2013/14, due to the greater number of home games. This was the 3rd highest in Ligue 1, only behind PSG €39 million and Marseille €14 million and just ahead of Lille €11 million. All the other clubs earn less than €10 million a season. The last time that Lyon were in the Deloitte Money League in 2011/12 they had the second lowest match day revenue of the top 20 European clubs.

Their average attendance of 34,414 was 7% higher than the previous season’s 32,084 with the club announcing that the number of spectators at the Gerland stadium reached an all-time high in 2013/14 with more than 1 million attending.

The lack of match day revenue has inspired the club to build a new stadium at the Olympique Lyonnais Park. Aulas has emphasised the importance of this project: “The new stadium, once built, will enable the club to cross an important threshold. Like all the other major European clubs, we have decided to be owners of our new stadium, so that (we) can earn all of the revenue generated by the Park and enjoy advantages comparable to those of our major European competitors.”

The club recently quantified these advantages, stating that the new stadium “should generate additional revenues of around €70 million per annum within the next five years”, including naming rights where “discussions are underway with several large French and international companies.”

Work began in July 2013 and the stadium should be operational from early 2016, i.e. from the second half of the 2015/16 season. It will have 58,000 seats, including 6,000 VIP seats, of which 1,500 will be in 106 private boxes. There will be a training centre with 5 pitches and a dedicated sports medicine facility. Revenue generation will be helped by two hotels, restaurants, offices and an entertainment complex, while the stadium can hold up to 10 events (concerts, shows, etc) a year. It will stage six matches in Euro 2016, including a quarter-final and semi-final.

The total cost is €405 million and will be financed by a mixture of: equity €135 million, bond issues €112 million, bank borrowing €144.5 million; and €13.5 million guaranteed revenue/naming rights.

Commercial income fell 6% (€2.4 million) to €35 million in 2013/14. This comprises sponsoring and advertising, down 9% (€2 million) to €19 million, and brand-related revenue, down 3% (€0.5 million) to €16 million.

Sponsorship revenue was actually stable, excluding a €2 million once-off fee in 2012/13 related to the new stadium project. Lyon’s €19 million was the 4th highest in Ligue 1, only surpassed by Monaco €140 million, PSG €79 million and Marseille €24 million. Lyon’s main shirt sponsor is Hyundai, whose deal was extended two seasons until the end of 2015/16 for all Ligue 1 matches, while Veolia have an agreement for European and domestic cup matches until June 2016.

Lyon have a 10-year kit supplier deal with Adidas, running until June 2020. According to the club, the contract is “worth between €80-100 million”, depending on sports results in French and European competitions. Lyon lists numerous sponsors in its accounts, but it is worth noting the deal with Sportfive, who were granted certain exclusive marketing rights for a minimum of 10 years from 2012 relating to events organised at the new stadium in return for a €28 million signing fee (paid in four annual instalments of €7 million).

Lyon’s commercial income has frequently been influenced by once-off signing fees, such as €3.5 million paid by Sodexo in 2007/08, while the 2014/15 results will be boosted by a €3 million fee related to catering for the new stadium.

Lyon’s brand-related revenue of €16 million was almost identical to Marseille, but was dwarfed by PSG’s €270 million, which included the enormous deal with the Qatari Tourist Authority.

The wage bill was cut by 9% (€7.6 million) from €82.4 million to €74.8 million, reducing the wages to turnover ratio from 81% to 72%. This continued Lyon’s trend of lowering the wage bill, which has fallen by around a third (€37 million) from the peak of €112 million in 2010 (though the figures up to that year included around €20 million for image rights payments). The wages decrease is in line with the revenue reduction over the same period.

Aulas had criticised the “pharaohs and dinosaurs” who had been awarded bumper contracts when the going was good, but then failed to deliver on the pitch. After Lyon missed out on Champions League qualification, the chairman warned that the club would have to make “economic adjustments” and he wasn’t kidding.

Despite the improvement in the wages to turnover ratio, Lyon’s 72% is still above UEFA’s guideline of an upper limit of 70%, but it is by no means the worst in Ligue 1. Six clubs have ratios above 80%, the highest being Rennes 97% and Lille 90%.

Just like revenue, Lyon have the 4th highest wage bill in Ligue 1 with €75 million. Obviously, PSG are out of sight with €240 million, but Lyon are also a fair way behind Monaco €95 million and Marseille €85 million.

Lyon’s principal method of reducing the wage bill and indeed the amortisation of player registrations is to “capitalize on the potential of young players coming out of the OL Academy” rather than buy stars whose acquisition cost and salary would be significantly greater. They have well and truly learnt their lesson here.

Not only is the Academy “central to the club’s strategy”, but it is a source of much pride, as it is largely based on Lyon’s “local identity”. As Aulas says, this creates players who have “strong bonds with the club and are proud to wear the shirt”, adding, “it also generates enthusiasm among fans, who share these values.”

The excellence of Lyon’s academy, recognised as the best in France and one of the finest internationally, has not come about by chance, as the club has devoted more than €7 million a year to this area, described as “part of the club’s DNA”. Lyon have the advantage of being able to promise young players that they will be given an early chance to break into the first team. Indeed, in the 2013/14 season an incredible 22 of the 33 professional players were graduates of the Academy and eight or nine of the starting players in every match were trained at OL. The average age of the squad was a youthful 24.

Lyon’s focus on homegrown players can be seen by the dramatic reduction in player purchases after the 2010/11 season. In the six seasons up to that point Lyon’s average spend per season was €53 million, but this fell to just €8 million in the three seasons since, including a tiny €2.6 million in 2013/14.

This meant that Lyon moved from average net spend of €10 million to net sales of €15 million in these periods, even though sales proceeds themselves fell from €43 million to €22 million.

The lack of big money buys from other clubs has impacted the balance sheet with the value of player (intangible) assets decreasing from €122 million in 2010 to just €13 million today. However, the value in the books is much lower than the value that could be realised in the market if players were sold, especially as homegrown players have zero value on the balance sheet. In the 2014/15 half-year accounts (with the help of Transfermarkt), Lyon estimated that this unrealised profit was as much as €111 million, up from €79 million in 2013/14.

Around 90% of this potential capital gain relates to players who come from the Academy, which “proves that our strategy makes sense”. So, Lyon’s focus on youth has not only been a financial necessity, but will likely mark a return to the business model on which it built its success, namely profitable player sales.

The jewels in the crown are exciting forward Alexandre Lacazette, who Aulas said was worth more than €50 million, and tricky winger Nabil Fekir, who the chairman has compared to Messi. That might be considered to be promotional sales talk, but both players have now broken into the French national team. Other good prospects include the elegant midfielder Clément Grenier, the dynamic captain Maxime Gonalons and the progressive full-back Samuel Umtiti.

Lyon’s debt has obviously been greatly influenced by the borrowing for the new stadium, which is now up to €112 million after the final €10 million tranche was issued in June 2015, split between the VINCI Group €80 million and Caisse des Dépôts et Consignations €32 million. The stadium debt was €48 million in the 2013/14 accounts, but had increased to €102 million in the 2014/15 half-year accounts.

In 2013/14 other financial liabilities were €33 million, largely OCEANE bonds of €23 million and bank credit facilities of €4 million, but had risen to €56 million in the half-year accounts. In June 2014 the OL Group signed a €34 million line of credit to secure its medium-term financing needs.

Before the financing for the new stadium was required, Lyon were in the happy position of having net funds instead of debt. In fact, the club said that its “financial structure was one of the most sound in Ligue 1.” However, that has obviously changed in the last couple of years.

Much like Arsenal, who had to finance the construction of the Emirates Stadium, the impact has been felt on the playing side, with net player debt moving to net player receivables.

Lyon’s cash flow from operating activities has been consistently negative for many years. As we have seen, there has been minimal investment in the playing squad, but substantial investment in infrastructure, including €100 million on the new stadium including €74 million in 2013/14 alone.

The club’s investment has been largely financed by new bonds or increases in share capital, which contributed €138 million and €91 million respectively in the last eight years, while other loans have been repaid. The bonds issued in 2010/11 were “mainly for financing the acquisition of player registrations”, while the bonds issued recently have been to fund the new stadium.

Since the 2013/14 accounts closed, further funding has been raised: €51 million of bonds in September 2014, €10 million of bonds in June 2015 and a €53 million increase in share capital in June 2015.

The accounts state that the average annual financing rate on the new stadium bank and bond financing (which is estimated at €248.5 million) will be around 7% from the time the stadium begins operating, so that will represent a sizeable interest burden each year.

"Kick Up Ya Foot"

An important driver of Lyon’s new, cost conscious model has been the advent of Financial Fair Play, as explained in the 2013 annual report: “The strategy in place for more than two years now aims to return OL Group to structural operating break-even by the end of the 2013/14 season. These objectives comply with UEFA’s FFP.”

Even though Lyon obviously did not meet their 2013/14 break-even objective, the club confirmed in April that “no further action would be taken” following a UEFA investigation of additional information requested following the large reported losses. Presumably Lyon must have been saved by the various allowable deductions in UEFA’s break-even calculation, including “healthy” costs such as those incurred for the academy and stadium development plus the cost of players under contract before June 2010.

Given Lyon’s losses, it is perhaps no surprise that Aulas has been a vocal supporter of PSG’s push to get UEFA to amend the FFP regulations, though he makes a good point about the differences between countries: “It's not the problem of Paris Saint-Germain. It's the problem of the difference between financial fair play and the constraints of each of the clubs. There is a European rule, and other rules in each of the countries, so there has to be a move towards harmonisation.” As an example, local tax rules mean that it is far more expensive to employ a player in France than any other major European league.

"Jordan: The Comeback"

It is too early to say that Lyon are back, especially given the huge financial advantages enjoyed by PSG in France, but it is easy to get behind their new business model, based on players developed at the OL Academy. The club has already taken its first steps towards recovery by shining in Ligue 1 last season and so returning to the Champions League, which is crucial for Lyon to fully exploit the opportunities that its wonderful new stadium will provide.

Of course, the emergence of young talent can be a double-edged sword, as their success makes it more likely that wealthier clubs will tempt them away, but at least that would be true to Lyon’s previous successful business model. It is not difficult to imagine a wily old fox like Jean-Michel Aulas having the last laugh, but in the meantime let’s just enjoy the young guns going for it.

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Paris Saint-Germain - Dream Into Action

So, barring any problems with a medical, Zlatan Ibrahimovic will today sign for Paris-Saint Germain. Many in the football world have been shocked by PSG’s audacious €65 million swoop for the Milan duo of Ibrahimovic and Thiago Silva, but it really should come as no surprise given the club’s massive transfer outlay ever since it was purchased by Qatar Sports Investments (QSI) last summer.

In much the same way as Manchester City did when they signed Robinho after their Abu Dhabi takeover, PSG immediately made a resounding statement of intent when they shattered the French transfer record with the €42 million purchase of Argentine playmaker Javier Pastore from Palermo. They also scooped up the cream of French football, buying Ligue 1 leading scorer Kevin Gameiro and powerful midfielder Blaise Matuidi, while raiding Serie Afor Jérémy Menez (from Roma), Mohamed Sissoko (Juventus) and Salvatore Sirigu (Palermo), and securing the services of the Uruguayan captain Diego Lugano (Fenerbahce).

The spending did not stop there, as new manager Carlo Ancelotti brought in experience in the January transfer window in the shape of Thiago Motta (from Inter), Maxwell (Barcelona) and Alex (Chelsea). This summer, as well as Ibra and Silva, PSG have to date also splashed out €26 million for Napoli’s forward Ezequiel Lavezzi and €12 million for Pescara’s technically gifted young star Marco Verratti. There’s also talk that Kaká might join the French revolution.

QSI, an investment arm of Qatar’s sovereign wealth fund owned by the ruling Al Thani family, bought 70% of PSG from American investment company Colony Capital in May last year, before acquiring the remaining 30% in March in a transaction that placed a €100 million value on the entire club. Right away, they installed Nasser Al-Khelaifi as club president, banking on his sports experience from his role as director of the TV channel Al Jazeera Sports and president of the Qatar Tennis Federation.

"We'll meet again"

Al-Khelaifi spoke of his hopes for this sleeping giant, “It’s a big club with a history and super fans.” Indeed, PSG is only behind Marseille in terms of popularity in France. The year before, their potential had been underlined by no less a person than Arsène Wenger, “PSG is the only club in the world which is based in an area of 10 million inhabitants and doesn’t have any competition (from a rival club).” With spooky prescience, he added, “What needs to be done is to get a group of investors around the table to provide the club with some financial muscle.”

However, there is little doubt that they have been under-achievers since they were founded in 1970 after the merger of Paris FC and Stade Saint-Germain. In fact, they have not won the Ligue 1 title for 18 years, though in fairness they do hold the record for the longest current spell in the competitive French top flight without being relegated.

To an extent, QSI’s investment is nothing new under the sun for PSG. With obvious parallels to the current situation, they were bought in 1991 by TV channel Canal+, who proceeded to invest substantial sums in attracting players of the calibre of David Ginola, George Weah and Rai to Paris, leading to a glorious few years, when they reached a Champions League semi-final, two UEFA Cup semi-finals and two Cup Winners’ Cup finals, winning one of them in 1996 against Rapid Vienna and losing the other in 1997 to Barcelona.

"Ménez - Jérémy spoke in class today"

However, the club ran up huge losses and built up substantial debts, leading to the 2006 sale to Colony Capital (plus minority shareholders Butler Capital Partners, a French investment company, and Morgan Stanley, an American investment bank). On the plus side, this consortium wiped out the club’s debts, but against that they appeared more interested in the property development opportunities at the Parc des Princes stadium and the training centre at Camp des Loges. The supporters’ dissatisfaction with their approach was summed up by a banner unfurled at the ground a couple of years ago: “Colony: a great PSG or get lost.”

Those fans are unlikely to be disgruntled with the ambition shown by QSI, who have promised to spend €100 million a year for the next five or six years in order to build a strong team, before slowing down the investment. Although Al-Khelaifi claimed that this level of expenditure was “normal for a top-ranking club”, only Manchester City have really done anything similar for such an extended period.

The idea is “to invest a lot and immediately” with the objective of joining Europe’s elite. Al-Khelaifi emphasised the European aspirations, “Obviously everyone dreams of winning the league, but our priority right from next season is the Champions League.” As part of their five-year strategy, they hope to compete in the Champions League on a regular basis and be in a position to win the trophy in three years.

"Ancelotti - Hands off, he's mine"

Although PSG’s official statement on the QSI takeover included the usual, bland remarks about looking “to take the club to the next level”, Carlo Ancelotti was in no doubt about the new owners’ targets, “The aim of the club is very clear. They want to build a team to win in the Champions League, not just in France.”

Last season, PSG finished second in Ligue 1, which was enough to qualify them for the Champions League, though it must have been something of a disappointment for QSI, given last summer’s spending spree. Indeed, when PSG were leading the title race before Christmas, Al-Khelaifi said, “Given the league table at present, if PSG are not champions of France at the end of the season, it will be a failure.”

It must have been particularly galling that they lost out to Montpellier, a club whose entire annual budget of €33 million is less than the amount PSG paid for one player (Pastore). It would be small comfort to know that the French league is one of the most unpredictable around, having five different champions in the last five seasons.

Moreover, the club had sacked the unfortunate Antoine Kombouaré to make way for Ancelotti, despite the club stalwart guiding PSG to the top of the table, though his expensive team had just crashed out of the Europa League. The feeling was that Ancelotti was the right man to take the club forward, having won two Champions Leagues and Serie A with Milan plus the Premier League with Chelsea. In addition, his reputation would help PSG attract the calibre of player required to make that big jump in quality, though the high salaries on offer might also help and Paris is not exactly a hardship posting.

Off the pitch, there will be plenty of changes too, as PSG will rack up enormous losses. In fairness, the club has consistently lost money in the past few years, though these will pale into insignificance compared to what is about to hit their books.

In the last published accounts for the 2010/11 season, before the impact of the QSI takeover is considered, they made a tiny loss of €201,000, though this was heavily influenced by exceptional financial items of €27.9 million. These are not explained, though are probably due to movements in provisions, which was the case in 2009/10.

Excluding this adjustment, PSG’s loss would have been €28.1 million, even higher than the €21.9 million the previous season, which was the second highest in Ligue 1. The 2010/11 operating loss was essentially due to €130 million of expenses, including €70 million of wages, being far higher than the €101 million of revenue. Profit on player sales and interest payable were negligible.

In the previous five years, PSG’s loss averaged over €14 million a season, while the cumulative losses since 1998 add up to a colossal €300 million. In those 13 years, PSG have not once reported a profit.

In terms of Ligue 1 profitability, PSG were mid-table in 2010/11, but if the exceptional items were ignored, their underlying loss was about the same as Lyon’s €28 million, which was the worst in the league. This was a repeat of the previous season when Lyon (€35 million) and PSG (€22 million) also reported the largest losses.

The only other club that reported a double-digit loss in 2010/11 was Marseille with €15 million, while half of the 20 clubs were profitable. In fact, the total Ligue 1 losses of €46 million were much improved from the previous season’s €114 million, despite a 3% fall in revenue, as expenses were cut and profits from player trading increased – partly due to PSG’s purchases.

That’s all very well, but it will be a whole new ball game under QSI. The club had originally estimated a loss of €40 million for 2011/12, but this has been revised upwards to €100 million following the signing of new players, the hiring of new staff including Ancelotti and Kombouaré’s pay-off.

The plan for next season assumes a deficit of €70 million, based on €130 million revenue and €200 million expenses, comprising €120 million wages (60%), €40 million player amortisation (20%) and €40 million other expenses (€20 million). This is the first time that any French club’s budget has gone above €150 million and would mean combined losses over the next two years of €170 million, though even that may be under-estimated.

This is not a problem for the Direction Nationale du Contrôle de Gestion (DNCG), the organisation responsible for monitoring and overseeing the accounts of professional football clubs in France. In contrast to UEFA’s Financial Fair Play (FFP) regulations, they allow owners to dig into their pockets to cover shortfalls with their own funds and they are satisfied with the bank guarantees provided by PSG’s directors.

The DNCG president, Richard Olivier, explained their view, “The more famous players there are in L1, the more spectators there will be. The Qatari are great. They’re putting in €200 million and with them we can hope to gain the fourth place in UEFA’s coefficients. They’re filling the stadiums and bring money directly and indirectly.”

"Lavezzi - heading to Paris"

Of course, it’s a very different story with UEFA’s FFP, which will ultimately exclude from European competitions (Champions League and Europa League) those clubs that fail to live within their means, i.e. break even. In particular, clubs will not be allowed to make up for losses via handouts from the owners. The first season that UEFA will start monitoring clubs’ financials is 2013/14, but this will take into account losses made in the two preceding years, namely 2011/12 and 2012/13.

They don’t need to be absolutely perfect, as wealthy owners will be allowed to absorb aggregate losses (“acceptable deviations”) of €45 million, initially over two years and then over a three-year monitoring period, as long as they are willing to cover the deficit by making equity contributions. The maximum permitted loss then falls to €30 million from 2015/16 and will be further reduced from 2018/19 (to an unspecified amount).

In addition, UEFA’s break-even analysis allows clubs to exclude “good” costs, such as depreciation on fixed assets and expenditure on youth development and community, while the first year can deduct wages of players signed before June 2010.

That’s a help, but PSG’s projected losses of €170 million are clearly far higher than the €45 million allowance, so it looks like they will have to rely on one of UEFA’s get-out clauses, namely that an improving trend in the annual break-even results “will be viewed… favourably” (Annex XI). In this way, they might manage to avoid the ultimate sanction of being thrown out of the Champions League.

Indeed, while UEFA’s president Michel Platini has said that he is not a fan of clubs that “buy players left, right and centre”, Andrea Traverso, his head of licensing, has been more circumspect, “Before we apply any penalties, we will look at a club’s financial situation in its entirety.”

Nevertheless, Al-Khelaifi is well aware of this issue and has said that it is QSI’s long-term plan to make PSG into a profitable club, “In five years we want to make money.” The idea is to invest massively in new players in the first few years in order to boost the sporting and commercial potential of the club, so that it is self-sufficient by the time that FFP really begins to bite.

The impact of QSI’s arrival on the club’s activity in the transfer market has been dramatic. In the decade before the takeover, PSG’s net spend was just €27 million, but has been a remarkable €199 million since then. The director of football (and former PSG player), Leonardo, has said, “We want to do something long term and not buy ten Messis straight away. That’s not how you build a team”, but he added that the club was “obliged” to spend big sums if it wanted to compete at the highest level.

Evidently, they are following the playbook used by Chelsea and Manchester City, who spent massively in the first two seasons following the arrival of wealthy benefactors. Ancelotti has argued, “We don’t just want to spend for the sake of it”, though others might beg to differ, as the initial policy of buying proven domestic performers seems to have gone by the wayside in favour of international superstars.

This should lead to a significant competitive imbalance in France, as PSG have spent significantly more than the rest of Ligue 1 put together. The “closest” contenders to PSG’s €199 million net transfer spend since the QSI takeover are Rennes and Marseille, with just €16 million and €11 million respectively.

Not only that, but in that period PSG are the biggest spenders in Europe, ahead of Abramovich’s Chelsea (€127 million) and a rejuvenated Juventus (€117 million). No other club has spent more than €100 million in this period. Traditional powerhouses like Bayern Munich and Manchester United have been left in the shade, while the nouveaux riches clubs like Manchester City, Anzi Makhachkala and Malaga are also in PSG’s slipstream.

Up until the last accounts, PSG did a reasonably good job controlling their wage bill with their 2010/11 wages to turnover ratio of 69% being just within UEFA’s recommended upper limit of 70%. In the last five years, wages have grown in line with revenue, as both have risen around €20 million since 2006.

In fact, PSG only had the third highest wage bill in France of €70 million in 2010/11, a long way behind Marseille (€101 million) and Lyon (€100 million), though more than twice as much as Montpellier (€29 million), who went on to become champions the next season.

The gap to the leading European clubs was even more striking before the QSI takeover. The Spanish giants, Barcelona (€241 million) and Real Madrid (€216 million), had wage bills more than three times as much as PSG, while even the notoriously parsimonious Arsenal (€149 million) paid out twice as much. As an example of the impact of major squad investment, Manchester City’s wage bill has doubled in two years to €209 million.

These huge discrepancies help explain why PSG need to spend if they have any chance of breaking into this select group, though this will be even more of a challenge, given the high tax rates in France, which means they have to pay a higher gross salary than their competitors in other countries to ensure that the net salary is at the same level.

This is reflected in the salaries paid to the new recruits, which are as high as €4 million a year, according to a summary published by the Sportunewebsite (based on figures collected from Le Parisien and France Football) for the 2011/12 season. On top of that, Ancelotti is reportedly receiving €6 million a year, an unprecedented figure for a coach in France. The list adds up to €65 million, but that excludes other players, coaching staff, administration staff, social security and bonus payments, so the total wage bill was actually much higher.

Although reported figures for transfer fees and player salaries are notoriously inaccurate, we can still make a reasonable estimate of the increase in costs arising from the new signings since the 2010/11 accounts.

First of all, we need to understand how football clubs account for transfer fees. Instead of expensing these completely in the year of purchase, players are treated as assets, whereby their value is written-off evenly over the length of their contract via player amortisation. As an example, Kevin Gameiro was bought for €11 million on a four-year contract, so the annual amortisation is €2.75 million (€11 million divided by four years).

In this way, the cost of buying players (in accounting terms) is spread over a number of years, but the table above suggests that the incremental amortisation is about €53 million. Additional wages amount to €78 million, including €25 million for Ibrahimovic (gross cost for €14 million net salary), plus social contributions of a further €20 million, so the total increase in costs should be around €151 million. That enormous figure excludes bonus payments, so the actual rise will be even higher.

It also does not take into consideration the super tax proposed by incoming Socialist president, François Hollande, whereby all income above €1 million would be taxed at 75%, a huge jump from the current 41%. There is some doubt over whether that would apply to footballers, but if it did come into force, it would significantly increase the gross costs to a football club when a player’s contract has been agreed on a net basis. In this case, a French tax expert calculated that the total cost of Ibrahimovic’s mega contract to the club, including social security, would be an unbelievable €70 million.

"Come on, Alex, you can do it"

Obviously, some players have left PSG since 2010/11, including Ludovic Giuly, Gregory Coupet and Claude Makélélé (though he has remained at the club as assistant manager), but the impact on wages would be relatively small.

Clearly, there are other costs besides salaries and player amortisation, but these are by far the most important for a football club, so even with the caveats outlined above, the calculated €151 million increase should give us a good idea of the financial challenge facing PSG. If we add that to the underlying 2010/11 loss of €28 million, we get to a projected loss of €179 million for PSG in 2012/13, which is a lot higher than the club’s budgeted loss of €70 million for that season. The only way that could be reduced is by growing revenue; so let’s explore the possibilities there.

QSI’s plans involve growing revenue from the current €101 million to €130 million in 2012/13 and then to €250 million in 2014/15 – a substantial increase by anybody’s standards. They have a four-pronged strategy to turn PSG into a leading global brand: (a) sporting success – reflected in higher TV revenues from Ligue 1 and the Champions League; (b) gate receipts – higher crowds paying higher ticket prices; (c) sponsors – a significant increase in the amounts paid by each sponsor; (d) merchandising – shirt sales off the back of superstars like Pastore and Ibrahimovic.

PSG’s current revenue of €101 million is the third highest in France, though it is a fair way behind Marseille (€151 million) and Lyon (€133 million). On the other hand, it is significantly higher than Lille, the fourth placed club, whose revenue is €34 million lower. It is again striking that the 2011/12 champions Montpellier had revenue of just €37 million.

Interestingly, PSG has the lowest reliance on TV with that category accounting for 44% of the club’s total revenue, though that is partly due to the lack of Champions League. Against that, they had the highest proportion from match day (18%) and second highest from commercial (38%), only behind Monaco.

Although PSG are not mentioned in Deloitte’s annual money league, their revenue would place them 22 nd in the list, just behind Benfica, and about the same level as Aston Villa. Their stated target of €250 million would give them the same revenue level as Arsenal and Chelsea, taking them into the top five, which demonstrates the extent of their ambition – or, alternatively, how difficult it will be to achieve this goal.

The last season that PSG’s revenue grew substantially was 2008/09, when it rose €28 million from €73 million to €101 million, which was because of two main reasons: (a) success on the pitch – higher league place and progress in the UEFA Cup, which resulted in higher TV revenue (aided by a slightly higher new French TV deal) and gate receipts; (b) different accounting for Nike merchandising – previously the club had only reported net royalties, but from 2009 they included gross revenue (around €8 million) with a similar increase in expenses.

Excluding those factors, annual revenue between 2006 and 2010 averaged around €80 million, though 2011 climbed to €101 million, largely due to television revenue, arising from Europa League participation and a higher position in Ligue 1.

The distribution model for French TV money is relatively equitable with 50% allocated as an equal share, while the remainder is distributed based on league performance 30% (25% for the current season, 5% for the last five seasons) and the number of times a team is broadcast 20% (over the last five seasons). This resulted in €43 million for PSG in 2011/12, €4 million higher than 2010/11, essentially due to finishing higher in the league.

There had been concern that the new four-year TV deal starting in 2012/13 would be considerably lower than the current deal, as one of the existing broadcasters, Orange, decided to withdraw from the bidding process, leaving Canal+ as the only game in town. However, Al Jazeera, whose director is the very same Al-Khelaifi that is president of PSG, helpfully stepped into the breach to take some of the packages, while strengthening their position in French football.

Although this has prevented a financial calamity for many French clubs, who are very reliant on TV money, it should be noted that the annual €610 million from the new deal is still lower than the current €668 million, though their president considered this to be “more than satisfactory in the current economic climate.” That said, Al Jazeera also picked up international rights for six years for €192 million, which works out to €32 million a year, nearly 70% higher than the current €19 million – though that is surely still a bargain, given the stars that are being attracted to PSG.

This is in stark contrast to the Premier League, where the new three-year domestic deal has increased by an amazing 70% to €1.3 billion a year, while the overseas rights are currently worth €0.8 billion a year (and likely to increase). The new French deal means that PSG’s revenue growth possibilities here are extremely limited for the next four years, leaving their TV revenue much lower than their competitors abroad.

If we compare PSG’s TV revenue for Ligue 1 of €43 million with the top two clubs in other major leagues, we can see the problem. Real Madrid and Barcelona earn nearly €100 million more a season from their lucrative individual deals, while the Italian clubs generate around twice as much even after their return to a collective deal. The two Manchester clubs receive €30 million more a year, while even the club finishing bottom in last season’s Premier League, Wolverhampton Wanderers, got €6 million more than PSG with €49 million.

Where PSG could grow their revenue is regular participation in the Champions League. Last season the three French clubs earned an average of €22 million (Marseille €27 million, Lille €20 million and Lyon €19 million), compared to PSG’s paltry €2.4 million from the Europa League. The amount earned is partly due to performance and partly an allocation from the TV pool, where half is based on progress in the current season’s Champions League and half on the previous season’s Ligue 1 finishing place (first club 50%, second 35%, third 15%).

Handily for PSG (and other French clubs), the amount paid to screen the Champions League in France has doubled for the three years from 2012/13, largely thanks to the intervention of (yes, you guessed it) Al Jazeera, who paid €180 million for that majority of the rights with Canal+ picking up the rest. This should mean that TV pool money will double from next season, so PSG can expect to collect around €28 million (and more if they progress beyond the group stage).

There is also plenty of room for growth in match day income. Although PSG’s €18 million is not too bad for France, it is miles behind Europe’s finest, e.g. Real Madrid, Manchester United, Barcelona and Arsenal all generate more than €100 million. PSG will be looking at many ways to (partially) close the gap: boost attendances, raise ticket prices and a better revenue mix (i.e. more premium customers, executive boxes, etc).

The new administration has already made much progress in attracting more crowds, with the average attendance rising an impressive 50% last season from 29,300 to 43,000 and many games being sold out. Admittedly, the previous season had seen a large decline from 35,100 due to former president Robin Leproux’s anti-hooliganism crackdown, following a number of incidents culminating in a death of a PSG supporter. This move towards a “broad family-based audience” initially saw a reduction in the number of attendees, but has now paid off, though the crowd is more gentrified these days. QSI’s ambitious target is to increase the number of season tickets to 40,000 from the current level of around 20,000.

At the same time, PSG will look to increase ticket prices (20% for the 2012/13 season), even though an analysis of the 2010/11 figures suggests that they are already the highest in France. There is a limit to how much the average fan is willing to pay, even when the football on offer is improving, so it will be imperative for PSG to find clever ways to maximise revenue from their premium customers. This can contribute a disproportionate amount of revenue, e.g. Arsenal make 35% of their match day revenue from just 9,000 premium seats at the Emirates stadium.

PSG currently play in the 48,000 capacity Parc des Princes, owned by the council, though they will have to play two seasons (2013/14 and 2014/15) at the nearby 81,000 Stade de France, as their current stadium needs to be renovated for Euro 2016. Although the local authorities have stated that PSG will return to the Parc des Princes for the long-term, there is a belief that PSG would prefer to build a new stadium, maybe on the same site, in a bid to emulate the revenue success of clubs like Bayern Munich and Arsenal, though that would be a longer-term project.

If PSG are going to have any chance of reaching their €250 million revenue target by 2014/15, they are going to have to get most of it from commercial activities. Although their current revenue of €38 million is again pretty good for a French club, it is a lot lower than Europe’s leading clubs with Bayern Munich (€178 million) and Real Madrid (€172 million) earning nearly five times as much as PSG.

They have hired Jean-Claude Blanc, former club president at Juventus, as chief operating officer in order to boost commercial revenue. As a first step, they have terminated the ten-year contract with sports marketing agency Sportfive, so that they can handle negotiations in-house. The strategy will essentially be to have fewer partners, who will pay more.

Long-term shirt sponsor Emirates pays €3.5 million a year in a deal extended to 2014, while Nike reportedly pays €6 million a season. PSG will look to increase each of these to €15-20 million per annum when they are up for renewal, which would be in line with the money earned by the big hitters, e.g. Manchester United receive €25 million from Aon’s shirt sponsorship and €32 million from Nike’s kit supplier deal.

In a sign of things to come, PSG dropped Winamax, as they do not pay enough, while they have signed up Qatar National Bank, who are reportedly paying €2-3 million a season just for a branding presence in the stadium. Some have speculated that his may be paving the way to them becoming main shirt sponsors, as their two-year deal ends at the same time as the Emirates’ contract finishes

Merchandising revenue should also significantly grow, particularly from shirt sales following the influx of top talent. Indeed, Al-Khelaifi said that shirt sales increased by 180% last year. That said, the amount of money earned per shirt is relatively small, so they will have to sell an awful lot to make a meaningful difference on their revenue. According to Nike and Adidas, the top selling clubs are Real Madrid and Manchester United – and even they “only” sell 1.2-1.5 million shirts a year.

Amusingly, the club’s commercial income actually includes a public subsidy. Although this has been cut from €2.3 million in 2008 to €1.25 million in 2012, many are unhappy that mega-rich PSG should continue to benefit from this funding.

"Gameiro - we need to talk about Kevin"

One possibility for PSG would be a mega sponsorship deal, similar to the one Manchester City signed with Etihad for a reported €50 million a year, which included stadium naming rights (even though City do not actually own their stadium). Here, PSG would have to be careful not to fall foul of UEFA’s FFP regulations, which specifically outlaw outrageous deals from “related parties”, so if QSI paid €100 million a season for a super-VIP executive box, this would be adjusted down to “fair value”.

PSG are also likely to make more money from player sales (only €2 million in 2010/11), as they will have to move on players that have lost their place following the new arrivals with candidates including the likes of Mamadou Sakho, Nenê and Clément Chantôme.

Now that we have reviewed PSG’s revenues and costs in detail, we can try to project PSG’s loss for 2012/13. Bearing in mind all the usual health warnings about forecasts never being 100% accurate, this should give us an indication of whether they are close to their target.

Taking the negligible 2010/11 loss as a starting point, we make an adjustment to remove the exceptional financial items, giving a “real” loss of €28 million. As calculated above, the new signings increase costs by €151 million for wages (including social security) and player amortisation.  This would be offset by some departures, though given the relatively low salaries paid before the takeover, this would be a small amount, say a €10 million reduction. We should include a nominal €10 million for additional bonus payments, though this might be on the low side.

For revenue, let’s make a few extravagant assumptions. First, PSG will win Ligue 1, so their revenue will rise to €46 million, which is €7 million more than they received in 2010/11. They will also reach the quarter-finals of the Champions League, as Marseille did last year, so will receive €38 million (after the increase in TV rights), which is €34 million more than the €4 million they received from the Europa League in 2010/11.

Following the growth in attendances and higher ticket prices plus more attractive Champions League matches, we’ll go for a gutsy 100% increase in match day revenue, producing an additional €18 million. Similarly, we’ll assume a 50% increase in commercial income, worth an extra €19 million. In the long-term, PSG should earn considerably more here, but they are constrained in the short-term by existing contracts. For good measure, we’ll assume that they can make €10 million more profit on player sales.

"A whole Motta love"

All of that gives us a projected loss of €92 million, which is not too far away from PSG’s budgeted €70 million, but this estimate does include some fairly aggressive assumptions regarding revenue growth. In any case, it is clear that PSG will have to be very persuasive in their FFP discussions with UEFA about how their “project” will ultimately deliver more revenue and help them towards the elusive break-even point.

They would do well to emphasise their investment in PSG’s academy with so much of France’s football talent coming from the Paris area. Historically, this has been under-exploited by PSG, but there have been encouraging signs at both under-19 and under-17 level in recent seasons.

Of course, QSI’s acquisition of PSG is part of a broader strategy for Qatar to use the riches accrued from their vast reserves of natural gas to gain more influence on the global stage. Sport is the ultimate instrument for gaining “soft” power, especially football clubs. Thus, another Qatari investor has bought the Spanish club Malaga, while the Qatar Foundation paid a hefty €170 million to be Barcelona’s first ever shirt sponsor.

"Sirigu - back of the net"

There are also strong trading links between France and Qatar, so it was not exactly out of the ordinary for former president Nicolas Sarkozy to host a dinner with a member of the ruling Al Thani family, nor to invite Michel Platini, given the Qatari’s interest in sport, but the aftermath was positive for all involved, as Platini surprisingly voted for Qatar to host the 2022 World Cup, while PSG secured their much needed investment. Sarkozy, a well-known PSG fan, was described by French newspaper Libération as “the Qatari team’s 12th man”. Incidentally, Platini’s son now works for QSI.

PSG’s plans are very bold, as confirmed by Ancelotti, “I know PSG are not yet at the top level, but our objective is to reach the level of Chelsea, Manchester United, Barcelona and Real Madrid.” There is no doubt that PSG have become what Milan president Silvio Berlusconi described as “ a strong economic force”, but that is not a guarantee of immediate success. As an example, QSI need look no further than Manchester City, who took four years to win the Premier League following their Abu Dhabi takeover.

On a cautionary note, we should remember the old comment from opposing fans that PSG stands for Pas Sûr de Gagner. The club can indeed not be sure of winning, not least financially where it has little room for error in the FFP era, but, if nothing else, this will certainly be an exciting ride with the new signings bringing some much needed glamour to French football.

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