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A Business Analysis of Leo Messi's transfer to PSG

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17/08/2021
Written by: Rana Ghosal

Leo Messi's move to PSG came out of the blue, shocking the entire football world.

When everyone assumed he was ready to renew his contract with FC Barcelona there was a sudden twist in the negotiations, mainly due to a financial roadblock.

Evidently, when a player of his magnitude makes such a dramatic move the entire world watches.

 

Below we have analyzed his move from Barca to PSG from a branding, marketing and financial perspective. 


General Overview

For the first time in his professional career Messi will now play for a privately-owned clubowned by Sheikh Tamim bin Hamad Al Thani, the Emir of Qatar through closed shareholding of Qatar Sports Investments. A sharp contrast to a club like FC Barcelona owned by its registered members and led by an elected president and its board of directors.

Although this may seem irrelevant now it could potentially have an impact once Messi's contract is up at PSG. The highly politicized nature of the fan-ownership structure at FC Barcelona was one of the main reasons the relationship with Messi got strained over the past couple of years with former president Josep Maria Bartomeu and the current one, Joan Laporta. 

From a sporting perspective, Messi will join PSG led by fellow Argentinian manager Mauricio Pochettino who knows him well from his tenure at Espanyol in LaLiga. 

 


Social Media Impact

The long-term impact of Messi's arrival at PSG from a social media standpoint remains to be seen. 

Below we have analyzed some general figures, as well as the immediate impact that Messi's arrival at PSG had from a digital standpoint over the past seven days. 

 

   


After only one seven days, Leo Messi's impact on PSG social media platforms had been immense. The club immediately added a cumulative 20 million followers across five main platforms including TikTok, Facebook, Instagram, Twitter and YouTube.

 

PSG social media growth

 

 

Financial Breakdown

On the financial side, both clubs have had a decline (along with other clubs as well) during the Covid-19 pandemic. Barcelona’s losses mounted while expenses and debts ballooned. A strict enforcement of salary limits from LaLiga has eventually led to the unfortunate situation involving Messi and FC Barcelona. 

Below we have analyzed a general overview of the latest revenue figures from both clubs. 

 


 

On the debt side, Barcelona has a net debt of €488 million according to their financial results of 2019/20 while PSG has reported a negative net debt of €63 million, a surplus of cash, in their June 2020 results declared.

The other main challenge with Barcelona has been the huge staff costs of €955 million leading to a wages to revenue ratio of 115% whereas PSG has a more modest staff cost of €423 million and a better wages to revenue ratio of 78%.

 

 

Even without Messi, Barcelona's weges to revenue ratio will hover around 95%, much higher than the 70% salary cap rule laid by LaLiga. It would be interesting to see the impact Messi will have on PSG's finances with a reported salary of €35 million net per season, including add-ons.


Squad Market Value & Increase in Global Branding


Comparing the squad market value (without Messi) of both the clubs, PSG has a higher value mainly due to the presence of Neymar & Mbappé. Adding an icon such as Messi will only benefit the club's overall squad market value. 

PSG has now formed a star-studded lineup that has incremented the club's worldwide exposure and will surely benefit both the club and its individual players from an overall branding standpoint. 

Source: Transfermarkt

 

Below is a comparison of the top three most-valuable players from both FC Barcelona and PSG, according to Transfermarkt. 


 

Messi has a tremendous amount of status and popularity to benefit PSG in a number of ways and give a big boost to the French Ligue 1 in stature. His arrival will have a direct impact on ticket and merchandising sales, increased sponsorship opportunities and a higher demand for the broadcasting rights of the French league as a whole, to name a few. 

That said, while the Barcelona fans mourn and weep in disbelief, there’s an equal amount of excitement amongst the PSG fans in Paris and around the globe.

Time will only tell what will become of Messi's time in Paris. One thing is for certain, Messi is more than a player, he’s an ICON.

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