The LFP will recover 1.5 billion euros by selling 13% of its commercial subsidiary to CVC. 1,130 billion will be distributed among clubs as follows: 200 million for PSG, 90 million each for OM and Lyon80 million each for Lille, Nice, Rennes and Monaco, and finally 33 million for the rest of the Ligue 1 clubs. Insights with Vincent Chaudel of the Sport Business Observatory, contacted by the Phocaean†
To a novice, it may seem surprising that the LFP is selling shares of its capital…
Vincent Chaudel: “The LFP, like any company, can open its capital and attract new investors. It is an injection of money, just one time, while the value of the fund can vary. This also means that a percentage of the profit of the LFP will be allocated to this fund depending on company performance.”
Is this a fairly recent process in the football world?
CV: “It’s new for France, but also for other countries. The Serie A did it last year, selling 10% of its business to the same fund, for 1.7 billion. La Liga, still with the same fund, got 2.7 billion dollars. his share sells 13%: in CVC’s calculation this is what the Ligue 1 is worth.
Has the LFP negotiated this amount well?
CV: “We are coming to a period of vulnerability for football. There was the Covid, closed stadiums … In France we also had the Mediapro crash. So in this context the LFP was not in a strong position and we can estimate that it It is not so bad.”
How to explain the pay gap between, for example, the Public Prosecution Service and PSG?
CV: “There are several elements. We had to find the right balance between the ‘value’ of each club and the fairness that had to be maintained in Ligue 1. I take as an indicator the community of clubs on social networks. The total for Ligue 1 is 175 million fans worldwide, all networks together PSG represents 70% If we wanted to mirror the weight of each club Paris would have had much more than its 200 million We therefore recognize PSG’s status as an economic locomotive.
So in 2022 fame will be determined by social networks?
CV: “OM has 12 million fans. That is almost 7 to 8%: this corresponds to this 90 million euros. This determines an area of influence for the club brand. If OM discusses a contract with Puma of 14 million euros per year, OM has 12 million fans. When PSG talks to Nike about 80, PSG has 80 million fans. This is not an automatic rule, but it defines the image of a club today.”
Can we therefore say that OM would benefit from expanding its community on social networks?
CV: “OM should have 30 or 40 million fans. By developing their social networks, OM will automatically do the same with their marketing revenue. There are clubs that, even if they work well, will of course be limited. So it’s interesting to see OM still has a lot of potential at this level. It doesn’t happen overnight and it’s not easy, but Marseille really has that potential.”
Finally, we note that the LFP has more than 300 million euros in the coffers.
CV: “This 1.5 billion should have been used for the internationalization of Ligue 1. Except this deal happens when French football gets into trouble. So 300 million goes to the functioning of the League, then you also have to repay their loan. use of this money will therefore not be optimal in the long term. This delay compared to other countries must be made up for by the sporting performance of the French locomotives. It would also be necessary for OM and PSG to often play in the Champions League at the same time, such as the big English, Spanish and Italian clubs. That happens all too rarely.”