Does PSG´s Move For Neymar Make Sense?

This past summer, most football fans have read and talked about PSG´s astonishing 222 million euro move to acquire Neymar from Barcelona. Most conversations included the terms “crazy move”, but is it so crazy? Let´s take a look.

At first, 222 million euros look crazy, and PSG´s move has increased the price of all players. However, to analyze the issue we must ask ourselves two questions:

• How significant a move it is for PSG? Buying 50 Teslas to start a taxi service in Madrid is a very significant move for a 10 car fleet but meaningless to a company like Uber.
• How profitable is the expected outcome? Uber may want to oust Cabify, a strong competitor in spanish speaking parts of the world, from Madrid, its main market. If that is the expected outcome, 50 Teslas is a very cheap price.

To answer the first question we should compare the 222 million euros with PSG´s revenue. According to a recent analysis by “The Economist” the acquisition accounts for 40% of the club´s revenue. Is that too much? Lets´s compare it with past moves from other top clubs.

According to the chart PSG´s move is the most expensive in history in terms of euros but not the most significant move for a football team. Real Madrid´s move for Zidane in 2001 and Figo in 2000 were bolder or crazier. Then we talked about “galactic moves”.

That leads us to the second question. Is the expected outcome high enough to justify such a steep price?

Expert analysis seems to confirm that Madrid´s galactic moves where profitable. Revenue has multiplied while the club has won four of their record twelve champion league titles since then.

PSG is a unique case in european football. Albeit being a young club (founded in 1970), it is the preeminent club in one of the top four european markets where it has won 4 out of the last five “Ligue 1” titles. Interestingly, it encounters no competition in Paris. While Madrid or London have at least four teams in their respective first divisions and Rome has Roma and Lazio. Paris has only the one club which places it in a unique position to cash in.

The problem is that, while dominating their domestic league, PSG has never gone through to semifinals in the Champions League, the preeminent competition. According to Deloitte´s football money league, it is the sixth club in terms of revenue with 521 million euros, 25% below the leaders.

In terms of value, according to KPMG, it is worth 850 million euros, a sad tenth place in a chart where Real Madrid and Manchester United are worth over 3 billion.

What the billionaire owner of PSG wants is to lead the pack. Since he bought the club in 2011, PSG dominates France and has become a regular in Europe´s top 8. However, the last push is always the hardest. Does Neymar provide that last push needed to rub elbows with Real Madrid, Manchester United or Barcelona?

Only time will tell. That last push comes from garnering sport success and wider popularity around the world. Through their acquisition of Neymar, PSG has already gained wider global popularity. As for sports success, according to betting odds, they are on the move. As you can see it was the second favourite to top the Champions league, below Mancheter City but above other almighty clubs like Real Madrid, Bayern Munich or Barcelona.