What PSG v Red Star Says About European Football

(Bloomberg) -- It won’t be difficult to spot the gulf between soccer’s rich and poor when Paris Saint-Germain visit Red Star in Belgrade for their Champions League match on Tuesday evening.

With Brazilian star Neymar and French wunderkind Kylian Mbappe in the ranks, seven PSG players on their own are worth more in the transfer market than the entire Red Star squad. Backed by Qatar’s enormous wealth, PSG says it has 65 million fans across the world. That’s almost 10 times the population of Serbia.

What will be less obvious is their divergence of fortunes. It’s one that shows how spectacularly the disparities have widened in European soccer in recent decades.

Red Star has something the French club wants badly: a European Cup win. In 1991, the Soviet Union and Balkans were breaking up and the team from what was then the Yugoslav capital lifted the elite trophy, the precursor to the Champions League.

Yet its appearance the following year would be the last beyond the preliminary rounds until qualifying for the group stage of the current competition. And even if Red Star beats PSG, it has no chance of progressing to the knockout tournament. Indeed, in the reverse fixture in Paris in October, Red Star was trounced 6-1.

“The risk to clubs such as Red Star is existential -- one or two bad seasons can jeopardize our existence,” said Stefan Pantovic, chief operating officer at the Belgrade team. “But weaker clubs should always have a chance to play against stronger ones. The public wants that and, although bigger clubs believe they can achieve greater TV rights, there’s also the David versus Goliath moment that attracts an audience.”

By contrast, PSG may have the money now, but it was little more than an average team struggling with debt before broadcaster Canal Plus bought a stake around the time Red Star was European champion. It went on to win the French title and the now-defunct competition for winners of domestic cups.

The club then hit the big time with the Qatari takeover in 2011, winning five of the last six French league titles and paying a world record 222 million euros ($253 million) for Neymar. It hasn’t managed to conquer Europe – and still needs at least a draw in Belgrade to progress – but PSG has generated record revenue from television rights and sponsorship.

In addition to the financial constraints faced by east European clubs in their own domestic leagues, it’s now more difficult for them to qualify for the Champions League because it’s skewed toward the big five leagues –- England, Spain, Italy, Germany and France.

“It's very hard for a club from Serbia to close that gap,” said Sam Boor, a sports business consultant at Deloitte. “Broadcasters will pay over the odds for the best games and there will be not much of a budget for everything else. For those clubs it’s very difficult to catch up.”

Set up after World War II to help the poor in Yugoslavia, Red Star has won the most national titles. The club survived the tumultuous Balkan wars and punitive international sanctions on the country.

The 1991 pinnacle was also a swansong as Red Star’s golden generation of players dispersed over the next few years. Its record sale is still almost 20 years old, the purchase of striker Dejan Stankovic by Italian team Lazio for what would be now about 20 million euros.

The squad is currently worth 43 million euros, according to online player trading tracker Transfermarkt. PSG’s is worth 20 times more. The Paris club’s revenue was 486 million euros for the 2016-17 season, with Deloitte’s Football Money League putting broadcast income at 122 million euros. 

Red Star made about 16 million euros in total in the same season, when they lost against Bulgarian side Ludogorets in the Champions League qualifiers, according to Pantovic. It makes the chances of mimicking PSG and attracting a buyer with deep pockets slim, he said

“We'd need a sound business model,” he said in an interview at his Belgrade office. “And for that, there must be a domestic league that can generate television rights of at least 3 million euros for the top five of six clubs in Serbia per season. I don't see that happening in the foreseeable future.”

To contact the editor responsible for this story: Rodney Jefferson at r.jefferson@bloomberg.net

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