Can Ligue 1 become Top European League after so many investments?

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The past few years, many powerful foreign investors have arrived in main clubs in France and as a result Ligue 1 seems to have a momentum. It was considered that they can be the new power in European scene. However, did they manage to catch up the competitiveness against the other powerful leagues such as Premier League, La Liga or Bundesliga?

According the official announcement, Ligue 1 has registered positive revenues the past 3 years and it is expected to announce a new turnover for 2017-2018. But again the question that is raised: is it enough to compete the 3 top European leagues?

Meanwhile in the papers it was mentioned that those revenues were mainly the income of the 20 clubs that are involved each year. So the attention is driven to the disparities among the clubs. Paris Saint-Germain is a “modest club” for Ligue 1 as the revenues were 1.5 times more than those of Lyon, Marseille and Monaco together. It simply interprets that the growth levels are not the same. We should realize that we are going to a modernised era in professional football. Meaning that stadium provides a form of autonomy from an economic point of view : Quality of the show, fan experience, technology intergration…..all of them generating commercial revenue.

However, credits should be given to the LFP for the last 4 years for the actions they have undertaken: brand redesign, digital integration and many more in order to reduce the gap between the top 3 leagues. On the contrary, they have to tackle issues regarding governance, tax system and the lack of professional structures and TV rights.

According to KPMG, the French League try to implement the business model of Bayern Munich. What does this model do? Based on important commercial revenues, they try to be less dependent from TV revenues. It is underlined that, it is still in early stages as last year the income for Monaco from TV rights from UEFA Champions League was approximately 65 million Euros.

Impact of Neymar’s Transfer

The positive impact of Neymar’s Brand cannot be underestimated. Considering the social media networks Neymar has 3.5 times more followers from Paris Saint-Germain brand alone on Facebook and 5 to 8 times more on Twitter and Instagram respectively. Not to mention that is approximately more than 2 times bigger from all the clubs together. The brand credibility is massive, which in my opinion PSG is still trying to figure out how to handle and capitalize it. For the Ligue 1 it is a valuable asset! WHY? Simply, they need to monitor and find ways to penetrate in new markets and see how TV broadcasters will take advantage of this situation.

What about the future?

With all the above mentioned, we should not forget the element of having a competitive league. For example last year Monaco was champion which helped them build a commercial long-term vision. In my opinion, they should implement some examples from La Liga by doing bold actions on international markets. By that, I mean that La Liga has developed network offices around the world. As a result, they have the physical presence of the brand and slowly starting competing Premier League. In case of Bundesliga, it was developed when Guardiola joined Bayern and when the won the World Cup. For Ligue 1 the first boost came with EURO 2016.

In the economic terms, it is another story. At the moment, none of Monaco, Lyon and Marseille can compete PSG. However with the boost of EURO 2016 they can benefit economically, make attractive LFP and reduce the gap. Both 3 mentioned teams have different strategies.

Monaco, buys young players and the goal is to sell them in significant added value. It is a way to promote young player with great potential. It paid of by taking the championship and with an exceptional road in Champions League. However it rises questions on how strategic is this approach as it is very dependent on the recruiting results. The other 2 team try to create viable long-term economic models. In case of OM, the core project is the stadium and how their investment will be profitable and sustainable. Strategies around attracting new audiences and businesses helped them to collect valuable data so as to maximise their actions for ticketing, online store, fan and customer experience.

Concluding, I do no know whether they will manage to achieve to become a competitive league but they are in the right pathway. Personally, I believe that we need to give some time to the leadership of leagues and clubs before we criticise. Bare in mind that if clubs manage to obtain the stadium management, it will impact the business model and it will create the need of assistance from experts for creating sport and cultural events through the year. If this is successful, then it is a game changer and an asset for Ligue’s 1 development run.

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