Professional football puts financial theory to the test

How is the value of a professional football club determined? While there is no magic formula, the methodologies commonly used by corporate finance experts provide an accurate picture of the value of a professional sports organization. Provided that some adjustments are made to take into account the specifics of the sector. lighting

“To convince investors, we always start talking about the project of the club. Then we try to highlight the assets that others do not have. You have to sell a dynamic and show that you can take steps step by step step by step. It is very important to present your project well to potential future shareholders while trying to understand their motivations before entering into financial considerations. It is in these terms that Pierre Ferracci, president of Paris FC, began his intervention during our conversation about the best financial approach to value a professional football club.

The head of the current 4e of Ligue 2 knows particularly well how to go about capital opening operations. In less than 24 months, and in an unfavorable context, Pierre Ferracci was able to bring three major investors in the action of Paris FC. A movement that began with the purchase in June 2020 of 20% of the capital of the Parisian club by the sovereign wealth fund of Bahrain. And that continued with the entry of BRI Sports Holding – owned by the Anglo-Srilankan businessman Allirajah Subaskaran – up to 10% in October 2021, after recently of the Armenian structure Noah Football Group last February, also up to the 10% A sequence that has not yet been closed since the Parisian club is currently in advanced discussions with an American investor… This ability of Paris FC to seduce investors leaves many French football managers in awe, even looking for buyers or yet again. .

Among the strong assets of the Paris FC project proposed by Pierre Ferracci to convince investors to enter the capital, the quality of the training model associated with the potential of the Ile-de-France region, the power of the brand “Paris” or. the “diversity” dear to the club with a very successful female section are among the arguments that go home. Arguments that are illustrated by concrete achievements and results. The Parisian club has in particular invested more than 9 million euros in the construction of its training center and training complex in Orly. Today, Paris FC is one of the professional clubs best represented in the national youth teams of France.

“The value of a company is always a cross between the growth of the activity and its future profitability”

Pierre Ferracci – President – ​​Paris FC

“We managed to give credibility to the fact that Paris FC is on the way to Ligue 1! Sooner or later, the club will evolve into the elite of professional football. And, when the club evolves into L1, all our points of strength exposed to investors – quality of training, appeal of the Paris brand … – will be much better valued. Why don’t you one day become Torino FC or even Atletico Madrid in our capital, “asks Pierre Ferracci loudly. A promotion to Ligue 1 would, in the short term, have a positive effect on the value of the Paris FC titles due to the mechanical increase in turnover generated by the promotion to the top division. It is enough to think of a good prospect of added value for the shareholders in the square if the club succeeds and then perpetuates its place in the elite of French professional football…

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