Ownership and finances of Paris Saint-Germain F.C.
Paris Saint-Germain F.C. was managed by Daniel Hechter (1974-1978) and Francis Borelli (1978-1991), before being purchased by the French media company Canal+ in 1991. The takeover of the club by Canal+ happened gradually. Canal+ started buying shares in the club in 1991, but it wasn’t until 1997 that the TV channel owned the majority. After June 2001, Canal+ obtained another 34% of the shares, and in August 2005, they obtained the remaining 2% held by Alain Cayzac, making Canal+ PSG's sole shareholder. On 11 April 2006, Canal+ announced the sale of the club to its new owners, a consortium comprising American investment company Colony Capital, French investment company, Butler Capital Partners, and American investment bank, Morgan Stanley. The club was sold for a reported sum of 41 million euros, with Canal+ taking responsibility for the debt run up by the club under its direction. This sale became effective on 20 June 2006, after Alain Cayzac replaced Blayau. On 30 June 2009, Colony Capital acquired all the shares of Morgan Stanley, becoming owners of the 95% of the club.
Birth and split (1970-1972)
Paris Saint-Germain F.C. was officially founded on August 12, 1970, by the merger of Paris FC (a pool of financial investors) and Stade Saint-Germain. After 20,000 subscriptions from individuals desperate to see an elite football club in Paris, a group of local businessmen, led by Guy Crescent, CEO of Calberson and Pierre-Étienne Guyot, Vice-president of RCF Paris, asked the directors of Stade Sangermanois to become part of their project. The creation of Paris Saint-Germain F.C. marked the reappearance of a major club in Paris after the decline of Racing Paris, Red Star, Stade Français and CA Paris. The publication of the financial results for the 1970-1971 season revealed 205.200 francs in losses and 1.776.950 francs of revenue. Like many other French clubs, PSG has to often deal with financial deficits. But thanks to the club's promotion to the first division the club was able to maintain stability. Success was immediate with PSG winning the Division 2 and celebrating its first birthday in the first division. The 1971-1972 season was PSG's 1st season in Division 1. Promotion to France's top tier was welcomed by the City of Paris who offered to subsidize the club for four seasons under three conditions: PSG had to remain D1 status, the club had to play eventually at the Parc des Princes and two members of the Paris City Council had to be part of the Club's Board of Directors. PSG accepted this conditions. On December 17, 1971, Henri Patrelle regained the Presidency of the club. The season was marked by the split the Parisians and the Sangermanois in May 1972. On December 21, 1971, the Paris City Council approved a motion to change the club's name to Paris Football Club. "If this new requirement is not accepted by the club, there will not be no subsidy and no Parc des Princes." Approved during holiday season, the motion was mediated after its publication in the Gazette of the City of Paris on January 24, 1972. The Paris City Council demanded to the Sangermanois authorities to give a more "Parisien" name to the club and remove the reference to Saint-Germain, in exchange for 800,000 francs. The latter refused to change the name and President Patrelle offered his resignation if the name remained unchanged, but the Paris City Council confirmed its position through a letter to the club on April 12, 1972: "If by any chance the members of your association refuse the appellation to change the name to Paris Football Club, or if the parent organizations opposes to this amendment, or even if your club does not maintain D1 status after this season, the repayment of the installments financed by our subsidy will be made with your club." This was a ultimatum to PSG, the Ligue and the FFF with July 1, 1972, being the expiration date. On May 16, 1972, after a heated debate on the general assembly, it was proposed a vote on this issue. The tension was such that the votes had to be counted several times. In the end the majority voted against changing the name. However, the Paris authorities just didn't gave up.
Three days after the vote the Paris authorities decided to go their separate ways. Paris FC merged with CA Montreuil and remained in the first division, while Paris Saint-Germain assumed amateur status and continued life in the third division. On 23 May, France Football published a two-page dossier on the issue "Paris, where are you? Patrelle declares himself sickened" : "I leave disgusted. In this case we are very far from football. Too many political problems came in the way." On the other hand, Guyot and Crescent promised that Paris FC would be "a great team for the capital".
On May 24, 1972, the divorce between Paris FC and Paris SG was endorsed by the Board of PFC and initialed by Guyot, Crescent and Patrelle. The latter signed the agreement as "President of Paris Saint-Germain F.C.", while the two other signatories as "President and Vice-President of Paris FC". The Article 1 of the agreement stated: "The activity of the Professional Division will continue under a different legal form and under the name of Paris Football Club". Article 3: "Paris Saint-Germain F.C. will retain his rights for the 1972-1973 season and all the amateur players dismissed during the 1971-72 season". Article 10: "These rules will be applied only if the FFF and the GPF acknowledge this and grant the conditions requested." The conditions were granted. This text was ratified on June 20, 1972, following the federal green light given on June 12. All these texts, were discussed at the Extraordinary General Assembly on May 16 and then published in the issue 8 of the monthly magazine Paris Saint-Germain Football Club renamed Paris Football Club after May 1972.
Hechter & Borelli era (1974-1991)
In the 1973-74 season, Daniel Hechter and his friends, including Jean-Paul Belmondo, Francis Borelli, Charles Talar and Bernard Brochand, in particular, were entering the scene. In May 1973, PSG received support from the designer Daniel Hechter and the latter ultimately became the President of the Management Committee, though Henri Patrelle retained the presidency. Before the start of the season, Hechter collaborated with the club to design an iconic shirt which would become a strong symbol of the club. It was composed of a blue shirt with a red central vertical bar framed by white edgings. The partnership between Patrelle and Hechter was fierce and did not last even a year. It began on June 15, 1973, with the sign of a protocol between PSG and Hechter. To avoid another case similar to that of Paris FC, the name (Paris Saint-Germain Football Club) and the club colours (blue, white and red) became protected by contract. The headquarters of the club were transferred to Saint-Germain-en-Laye, 29 avenue of Montardat Danes.
Paris SG then shocked everyone in France, when Hechter signed French footballing legend Just Fontaine to form a coaching duo with Vicot, and then paid Sedan a record 1.3m francs for Argelian star, Mustapha Dahleb. Although Patrelle was the President, Daniel Hechter, President of the Management Committee, played a major role at the club. And after the club regained top tier status it started looking for new financing, causing a conflict between the two men for the full control of PSG. This caused Patrelle to made way for Daniel Hechter, on June 9, 1974, and the club achieved professional status. On November 4, 1975, it was inaugurated the center of youth formation at the Camp des Loges. Pierre Alonzo took the direction of the center. That same year, the club brought to life again the Tournament of Paris.
The 1975–76 campaign saw Robert Vicot quit the club and Fontaine became the sole coach. Vicot refused the club's offer to be in charge of the reserve team and recruitment, before leaving Paris. Fontaine continued his tenure at the capital club until the end of the season, when his relationship with Hechter deteriorated and had a disastrous end, with law suits and contractual disputes in the background.
On January 6, 1978, following the scandal of double ticketing PSG, Daniel Hechter was dismissed from his post as president by the FFF. On January 8, 1978, although the rivalry does not exist yet, PSG recorded a stunning 5-1 victory over l'OM and crushed Les Phocéens title aspirations. Led by Carlos Bianchi and Mustapha Dahleb, PSG dedicated this match to their chairman Daniel Hechter, who was involved in a case of double ticketing at the Parc des Princes. On January 9, as the case had became a scandal, Francis Borelli was elected president by the club committee.
During his thirteen years as head of the club, PSG won its first major trophies: two Coupe de France and a Ligue 1 title. The image of Borelli embracing the lawn of the Parc des Princes after the Dominique Rocheteau's goal in the last seconds of the Coupe de France final in 1982 still remains in the memory of all fans. During the second half of the 80's, Francis Borelli defeated the Matra Racing of Jean-Luc Lagardère, whose priority was to become the leading club in Paris. PSG was placed under tight control by the financial authorities and though it initially reduced the debts, the competition of Matra Racing forced PSG to increase their budget, thus failing to pay off their debts between 1986 and 1990. Lagardère finally throwed the towel and Racing abandoned their professional status in June 1990 and left PSG with a deficit of 50 million francs. PSG retained their leadership in the capital, but in order to compete in the league against the likes of Marseille and Bordeaux, the club was in a urgent need of funds to cover their debts and investments. The poor performance, both sporting and financially, under the presidency of Francis Borelli, saw PSG being bought by Canal + on 31 May 1991.
On October 2, 2007, Francis Borelli died following a long illness. Two minutes of silence were observed at the Parc des Princes during the match PSG-Rennes on October 6, 2007. To pay tribute, the Presidential Tribune of Le Parc was renamed Presidential Tribune Francis Borelli at the start of the 2008-2009 season.
Canal+ era (1991-2006)
As the economic and social lull of France took a stranglehold on French football, a shining light was to give reprieve for the ailing sport. Satellite firm, Canal +, invested huge amounts of money into the game with a pay per view TV deal. PSG receiving a whopping 40% of their income from televised games. Thanks to this money, PSG embarked on a spending spree, buying the best talent in France and the world. Players like David Ginola, Bernard Lama, Youri Djorkaeff, Raí, George Weah and Marco Simone all joined the club.
The takeover of the club by Canal+ happened gradually. Canal+ started buying shares in the club in 1991, but it wasn't until 1997 that the TV channel owned the majority. After June 2001, Canal+ obtained another 34% of the shares, and in August 2005, they obtained the remaining 2% held by Alain Cayzac, making Canal+ PSG's sole shareholder.
From 1991 to 1998, PSG remains sound finances and expenditures of the club settled at around 50 million euros per season, taking advantage of the rise of power from football TV rights, doubling the number of spectators at the Parc des Princes as well as an excellent performance in national and European cups. Since the departure of Michel Denisot, the club has accumulated 96 million euros of debt in June 2002. The net debt fell to 8 million euros in June 2004 by recapitalizing the club. However, the day finances stayed red. Thus, for the season 2004-2005, the club told the DNCG the expenditure of 87.037 million euros for a deficit of 17.801 million euros and a turnover of 69 million real euros. Numbers published by the DNCG, reported 20.823 million euros from ticketing, 13.793 million euros from sponsors, 31.270 million from TV rights, 2.371 million euros in grants and 1.117 million euros from merchandising. Excluding transfers, other income sources are less than one million euros. On the expenditure side, salaries for players and staff amounted to 40.655 million euros, with 9.012 in expenses. Other taxes totaled 5.806 million euros.
For the 2005-2006 season, PSG was the only French club with a large deficit, totalling losses of 13.456 million euros. Despite the absence of PSG in European cups, the actual turnover of the club was of 80.364 million euros (16% higher than the previous season). Numbers published by the DNCG, reported 19.179 million euros from ticketing (-8%), 17.440 million from sponsors (+21%), 34.331 million euros from TV rights (+9%), 2.357 million euros in grants (-1%) and 0.833 million euros from merchandising (-34%). On the expenditure side, salaries for players and staff amounted to 50.064 million euros (+19%) with 9.927 in expenses (+10%). Other taxes totaled 5.391 million euros (-8%).
Colony Capital era (2006-)
On 11 April 2006, Canal+ announced the sale of the club to its new owners, a consortium comprising American investment company Colony Capital, French investment company, Butler Capital Partners, and American investment bank, Morgan Stanley. The club was sold for a reported sum of 41 million euros, with Canal+ taking responsibility for the debt run up by the club under its direction. This sale became effective on 20 June 2006, after Alain Cayzac replaced Blayau. On 30 June 2009, Colony Capital acquired all the shares of Morgan Stanley, becoming owners of the 95% of the club.
According to AFP the amount of the club's sale in 2006 to Colony Capital, Butler Capital Partners and Morgan Stanley would be of 41 million euros for an initial amount requested by Canal + of 80 million euros, with the accumulated debt of the club lying with the pay channel, calling the club's financial counters to zero. So the budget for the current season is estimated to be around 65 million euros.