Investment values PSG at over 4 billion

US private equity group Arctos Partners (https://www.arctospartners.com/) acquired a 12.5% stake in PSG, valuing PSG at over 4 billion.  The same group also invested in F1 recent by investing in Aston Martin.  Ran by former CAA exec.

QSI bought PSG for 70 million and has invest 1.5 billion to date.  So they’ve almost achieved a 3x return on investment based on this valuation.  

This is for those who say Qatar is just throwing money away with no regard for profitability.  Puts every and all FFP nonsense immediately to be bed.  In fact, they can spend whatever they want now within a margin of the valuation (typically 70-80% of valuation).

The Emirati part of the world has more money than they know what to do with.

Many bitter about that but I see them simply spinning gold into...gold thread, or however it goes.

Not a fan of the place as a whole but that part of the world is miles ahead of the stagnant west by now.

Regardless of Qatar having more money than they know what to do with.

You've invested 1.57 billion... you just got 500 million back in cash and retained 87.5% of an entity valued at over 4 billion (so 3.5 billion is your stake).

3x over 12 years is more than respectable from an investment standpoint considering the risk of this. It's not like they invested in a 3rd world country or a startup, where you expect these types of returns for your risk.

Very good point. As much has been lost they've made a very shrewd investment with high yield returns.

I value it at, pair of socks.

you spend money to make money. a lot of old school owners don't realize this. they think its just buying the club, spending on one or two summers and then raking in the cash. involves spending transfer money and marketing dollars outside of the football. not surprising at all.

It is a bit more work for PSG because they can't rely on the media rights for Ligue 1 for income, unlike EPL and La Liga.  They had to build a brand from scratch, sell it to players, managers and outside interests, and monetize.  Yes, they got some help early from Middle East sponsors.  But for the past 5-7 years, very little revenue is coming from there.

In 2010, PSG had revenue of €83m
In 2022, PSG had revenue of €800m

They're not even selling at a crazy revenue multiple... 5x ish is not outlandish.

even when psg was crap in the 90s and 00s, i always thought they were a marketable club for some strange reason. them being in a commercial capital might have had something to do with that. also (and i know this has little or nothing to do with it), i always thought they had very fashionable kits. i really loved all their old opel kits. since they were a constant mid table/under achieving side, i always felt they didnt deserve those jerseys.

i wonder what went wrong with monaco? didn't they have some rich folks take over as well? plus they got some influx of cash from the mbappe deal. i was thinking it would be psg monaco and city calling all the shots.

Monaco is doing really well frankly.  They have no fan base.  What happened to Monaco is FFP...  they have no way around it given the size of their stadium and fanbase.  They can only compete by developing players and they are.  They buy the best youth players in France and develop them.

Before FFP, they are extremely wealthy.  They had Radamel Falcao, Bernardo Silva, Berbatov, Fabinho, Kondogbia, etc.  They were competing with PSG in terms of payroll.  Not possible anymore.  The sales bankroll their youth purchases.  Not that they won't sign good players (Golovin, Ben Yedder, etc.).  But they can't afford elite ones and stay on the right side of FFP.

All FFP does is keep the elite clubs on top. That's it. It stops smaller clubs from growing or competing.

Sorry but still not sure how FFP means Monaco is restricted compared to PSG? Meaning Monaco dont have enough income n just got lucky in that period right? I only know back when Monaco won the title ppl were saying the reason financially were they get advantage in tax in the region or something?

BarcaLearning wrote:Sorry but still not sure how FFP means Monaco is restricted compared to PSG? Meaning Monaco dont have enough income n just got lucky in that period right? I only know back when Monaco won the title ppl were saying the reason financially were they get advantage in tax in the region or something?

You need to match revenues with expenses under FFP.  You can't "invest" to make up the difference outside of a certain percentage.  That makes it impossible for Monaco.  Their stadium capacity is 18k as an example. Can't even get big sponsors because of their lack of fan reach.

Thats a shame really... Monaco back then meant a surprise n proper comp for PSG n just more intrigue n variation in the league title race