Dncg Report 2018/2019 Season French Professional Football French Professional Football Financial Report a Word from the President 02 2018/2019 Key Figures 14

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DNCG REPORT 2018/2019 SEASON FRENCH PROFESSIONAL FOOTBALL FRENCH PROFESSIONAL FOOTBALL FINANCIAL REPORT A WORD FROM THE PRESIDENT 02 2018/2019 KEY FIGURES 14

01 LIGUE 1 18

1.1. Key figures 2O 1.1.1. Summary 20 1.1.2. Earnings 22 1.1.3. Operating expenses 34 1.1.4. Operations involving players 40 1.1.5. Results 42 1.1.6. Financing of the clubs 44 1.1.7. Analysis of club achievements 46

1.2. Link between sports results and financial characteristics 47 1.2.1. Sports results 47 1.2.2. Sports risks/opportunities and payroll 50 1.2.3. Strong impact of sports results on revenues 53 1.2.4. Correlation between gross payroll and sports success 54 1.2.5. Analysis by groups of clubs for the 2018/2019 season 56

02 LIGUE 2 58

2.1. Key figures 60 2.1.1. Summary 60 2.1.2. Earnings 62 2.1.3. Operating expenses 71 2.1.4. Operations involving players 78 2.1.5. Results 80 2.1.6. Financing of the clubs 84 2.1.7. Analysis of club achievements 86

2.2. Link between sports results and financial characteristics 87 2.2.1. Sports results 87 2.2.2. Sports risks/opportunities and payroll 90 2.2.3. Strong impact of sports results on revenues 93 2.2.4. Correlation between payroll and sports success 94 2.2.5. Analysis by groups of clubs for the 2018/2019 season 96

03 EUROPEAN BENCHMARK 98

3.1. European benchmark for earnings excluding transfer operations 100 3.2. Correlation between sports results and turnover 101 3.3. Comparison of the amounts of transfers over turnover 104

2018/2019 SEASON - DNCG REPORT 31 CONTENTS 2018/2019 SEASON

The 2018/2019 season saw French professional football consolidate its revenues, with a total turnover of 2.854 billion euros compared with 2.836 billion euros during the previous season.

This revenue growth was accompanied by a significant increase of operating expenses, which were equal to 2.949 billion euros, up 10% due to some major investments on players made by the clubs in the run-up to the new cycle of domestic broadcasting rights.

As a result, the operating income dropped sharply over the season, with a loss of 96 million euros compared to a profit of 161 million euros during the previous season.

After consideration of the cost of debt and taxes, Ligue 1 and Ligue 2 clubs are showing A WORD FROM a net loss of €160 million at the end of the 2018/2019 season.

These results for the 2018/2019 season include:

• Growing commercial activity, with operating revenues up 11% to 2,114 million euros; • A continuing high level of capital gains from player transfers (€740 million, after the previous season’s record figure of €929 million); • A significant reduction of financial expenses to 53 million euros compared to 122 million euros THE PRESIDENT at the end of the previous season. The equity of the clubs increased over the season and still remains concentrated on a limited number of clubs. This justifies the attention that needs to be paid to strengthening it in the future.

More generally, the financial results for the 2018/2019 season confirm:

• The sensitivity of the earnings and economic model of professional football to the ability of clubs to generate recurring capital gains on the sale of players; • The very considerable differences between clubs, both in terms of commercial performance and financial structure; • The difficulties of the Ligue 2 economic model. JEAN-MARC MICKELER DNCG President In this context, the adoption of regulatory ratios by the General Meeting of the French Football Federation and by the General Meeting of the Professional Football League in December 2019 is, according to the DNCG, a good decision in view of the risks facing the industry: uncertainty about the impact of Brexit on the transfer market in the coming years, evolution of the broadcasting rights’ amount over time, ability to significantly increase other earnings…

By agreeing to strengthen the self-regulatory mechanisms of professional football, the shareholders and club managers have shouldered their responsibilities. The DNCG will continue its support and control mission in the same constructive spirit, in the interest of French football.

4 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 5 The commercial momentum of French professional football is accelerating with an 11% earnings increase (excluding transfers) in 2018/2019

The earnings excluding transfers of Ligue 1 and Ligue 2 clubs in the 2018/2019 season exceeded €2 billion for the first time, reaching €2,114 million on 30 June 2019 compared with €1,907 million on 30 June 2018.

This 11% growth (+€207 million) originated with Ligue 1 clubs (Ligue 2 posted slightly lower earnings excluding transfers) and was mainly due to:

• A €105 million increase of the broadcasting rights of Ligue 1 clubs, linked firstly to the higher broadcasting rights of UEFA competitions for the 2018/2021 cycle (+€80 million this season) and secondly to the contract for international rights (+€22 million compared with the previous season).

• An increase of €102 million of commercial earnings excluding broadcasting rights, making clubs less dependent on broadcasting rights by diversifying their revenue sources. This increase includes:

• Higher sponsorship and merchandising revenues by €71 million, mainly driven by the performance of PSG and those of OL, OM, Stade Rennais and RC Strasbourg ;

• A €12 million increase of ticket receiptsdriven by a positive price effect in the domestic leagues (+4% on the average ticket in Ligue 1 and +7% in Ligue 2) and in European competitions (+35%) ;

• An increase of €19 million of Other earnings, generated primarily by OL, the Stade de Reims and the Stade Rennais at the time of the Women’s World Cup.

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Expenses increased by 10%, half of which was due to the payroll Operating results from transfer operations, an integral part increase, leading to a deterioration of operating income, which of the club model, amounted to €740 million in 2018/2019 showed a loss of €835 million in 2018/2019

After a record season in 2017/2018, with €929 million of operating results, Equal to €2,949 million, expenses increased by 10% in 2018/2019 (compared particularly due to the transfer of Kylian Mbappé from AS Monaco to PSG, to €2,675 million during the previous season). This increase is mainly due the transfer market continues to perform on a very good level, reaching €740 million to continuing players’ investments and the payroll increase that started in 2018/2019. during the previous season in order to strengthen the personnel numbers. It also proportionately originates more with clubs that do not play • Ligue 1 contributed €635 million to this result, equivalent to 33% in European competitions (+12% increase posted by the latter, of its earnings excluding transfers. compared to +9% by clubs playing in European competitions between 2017/2018 and 2018/2019). These expenses linked with players’ investments include: Half of the Ligue 1 clubs generated transfer earnings of more than €20 million and more than a third (7 clubs) generated transfer earnings of more • A 10% payroll increase (+€141 million) to €1,588 million. than €34 million. These two figures, never previously seen, illustrate the high proportion of player transfers in the activities of the clubs. • An 8% (or €32 million) increase of the depreciation charge for transfer compensation, amounting to €410 million. • Ligue 2 is confirming this trend and contributed €105 million to this result (compared with €88 million in 2017/2018), equivalent to 50% of its earnings • An increase to €112 million of the fees paid to sports agents1 (vs. €91 million excluding transfers, including €31 million of capital gains on player transfers the previous season), meaning a further increase of 23% (or €21 million). from Ligue 1.

As a result, even if the increase of expenses was less significant than • For 11 clubs in Ligue 1 and 12 clubs in Ligue 2, the operating results in the 2017/2018 season (when the increase was +22%,and +16% without from transfers represent more than 25% of their earnings excluding transfers. the effect of the players Neymar and Mbappé acquired by PSG during the 2017 summer trading period), the operating income deteriorated, • 243 transfers against payment were recorded in 2019, for a gross amount with an operating loss of €835 million for the 2018/2019 season of €1,251 million (compared to €1,522 million in 2018). (compared with a loss of €768 million at the end of the 2017/2018 season). The player transfer business has become not only a decisive component • The Ligue 1 operating income was -€703 million in 2018/2019 (compared of the financial equilibrium of the clubs. It is also an integral part to -€666 million in 2017/2018). of their economic model, notably thanks to the efficiency of the French training system and the ability of clubs to attract young talent and take advantage of the dynamic • The Ligue 2 operating income was -€132 million in 2018/2019 (compared buying power of foreign leagues such as England and Spain, which this season to -€102 million in 2017/2018). Ligue 2 posted a proportionally became the leading importing country of our players. sharper deterioration than Ligue 1, due both to higher expenses (half of the deterioration of the deficit stems from the payroll, which rose by €15 million) and to lower commercial revenues.

1 Due to commissions being based both on transfer compensation and the payroll.

8 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 9 2018/2019 SEASON

Accordingly, Equity is increasing: its reinforcement as well as infrastructure investments must be continued and extended to all clubs At the end of the 2018/2019 season,

• The clubs posted an operating loss of €96 million, plus financial expenses The equity (shareholders’ equity and shareholders’ current accounts) of €53 million that were sharply lower than during the previous season of the professional clubs is €1,597 million on 30 June 2019. (€122 million), mainly due to the use of more reasonable borrowing rates. • The equity of Ligue 1 clubs amounted to €1,457 million on 30 June 2019, • The net loss of Ligue 1 and Ligue 2 clubs amounted to €160 million. It should be with €889 million of shareholders’ equity (compared with €732 million noted that this net loss of €160 million includes a €28 million write-off of shareholders’ equity in 2017/2018, an increase of 21%). of a shareholder’s current account, thereby improving the net income in 2018/2019. On the other hand, the net loss recorded in 2017/2018, • The equity of Ligue 2 clubs amounted to €140 million on 30 June 2019, i.e. €176 million, included a €178 million write-back of a shareholder’s current with €67 million of shareholders’ equity (compared with €89 million account that was weighing on the net income in this same amount. of shareholders’ equity in 2017/2018)

• However, the losses in Ligue 1 are very highly concentrated: 95% Without the capital increases and current account contributions made of the cumulative net loss is concentrated on 3 clubs with some by shareholders, the equity of the clubs would have deteriorated sharply of the biggest budgets (OM, LOSC and Girondins de Bordeaux). as a result of the season’s results.

As in the previous season, 15 Ligue 1 clubs have profitable net income. The strengthening of equity and the decrease of debt recorded this season . served to improve the rate at which the liabilities of the clubs are covered • 11 Ligue 2 clubs have profitable net income, with a further 2 just breaking by their equity. even. The Ligue 2 net loss of €33 million in 2018/2019 was almost double compared to 2017/2018 (-€17.5 million). The operating debt, defined as the total financial liabilities less the portion dedicated to investments in infrastructures, concentrated on a few clubs (mainly LOSC, Girondins de Bordeaux and AS St Etienne), dropped by around €70 million due to the €121 million reduction of the LOSC debt; it nevertheless remains at €269 million.

The gross financial debt stood at €558 million on 30 June 2019, slightly lower than last season, with 52% (€289 million) corresponding to debt for infrastructure financing.

In reality, two clubs have a policy to strengthen their equity and infrastructure, namely PSG and OL, followed this season by AS Monaco.

The value of the “Tangible” assets (infrastructures, etc.) of French professional football is equal to €771 million in 2018/2019 (compared to €756 million last season).

Lastly, the cash position remained positive on 30 June 2019.

10 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 11 IN CONCLUSION Payroll and Equity Ratio System

The implementation of preventive financial ratios is intended to ensure The 2018/2019 season is confirming the importance for the clubs incomes that a club cannot, in the future, spend more than it earns through credit financing of the revenues provided by the broadcasting rights sales on one hand of a structural deficit. and the ability to transfer players on a regular basis on the second hand. The idea is twofold: an expense ratio towards which to strive and ensuring that To offset the decline of transfer earnings seen this season compared clubs only exceed this ratio if their equity level relative to debt allows it. with last season, the clubs also continued and improved the increase of non-transfer earnings, notably under the impetus of PSG, which benefited This mechanism, intended to be implemented as part of the DNCG’s financial fully from the sporting and image effect of its personnel. supervision of professional clubs, will thus preserve the attractiveness and competitiveness of French football by introducing a virtuous system The fact remains, however, that commercial revenues excluding broadcasting for controlling its expenses and debt. rights grew less rapidly than the payroll. It includes adding two ratios to the current control procedures: As of next season, clubs will benefit from the higher domestic broadcasting rights of the Ligue 1 championship for the 2020/2024 cycle (a gross increase • As a risk indicator in terms of the payroll, the remuneration of the personnel of €400 million per year ). and the player transfer compensation must not exceed 70% of eligible earnings (including operating revenues and the average capital gains In the context recalled above, it is important to monitor how the clubs on player transfers over three seasons). will reinvest these additional resources: The DNCG encourages the clubs to use these additional resources to reduce the operating deficit as a priority. • A sufficient equity level, which must not be less than the eligible liabilities (including financial debt and other non-current debt, excluding debts attributable The DNCG will strive to support these efforts, notably through the new system to infrastructure financing and debts on player transfer compensation). of financial ratios adopted last December. As from the 2022/2023 Budget, simultaneous non-compliance with these two indicators during an analysis of the club’s provisional budget may require the DNCG to take some of the usual measures (oversight of the payroll within the budget, etc…).

As such, the clubs will have a transitional period of two seasons (2020/2021 and 2021/2022) to prepare for their implementation as of the 2022/2023 season.

Starting with the 2020/2021 Budget, the clubs will provide the DNCG with a 3-year operating forecast that converges on the levels expected for 2022/2023. Over the next two seasons, the DNCG will monitor this 3-year plan and analyse, with the club, any deviations from its forecast.

In all cases the DNCG retains the ability to apply its measures (oversight of the payroll within the budget, etc…) subsequent to a general examination of the club’s situation (1 Ligue 1 club and 7 Ligue 2 clubs were subject to supervision measures for the 2018/2019 season).

12 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 13 Report on the financial oversight of the activity of Sports Agents

The law of 1 March 2017 gave the management control bodies a new mission of financial control relative to the activity of sports agents and the flows generated by this activity. This appears to be all the more justified since the fees paid to agents by football clubs have increased very sharply in the current upward trend of the transfer market.

Of the 3,558 international2 transfers (all countries taken together) that involved at least one football3 club intermediary, €590 million of commission were paid in 20194, a 19% increase compared to 2018.

In France:

- Commissions paid to sports agents by professional football clubs amounted to €112 million in 2018/2019 (compared with €91 million in 2017/2018, a 23% increase).

The oversight of agents by the DNCG is carried out by sampling carried out on the basis of “appropriate samples”. The selection criteria are the following:

- The biggest transfer operations carried out during a season (i.e. 3 oversight procedures THE LAW OF 1 MARCH 2017 launched in 2018 and 2 in 2019). - The largest business volumes, in terms of the number of transactions and/or amount of commissions (i.e. 2 oversight procedures launched in 2018 and 3 in 2019). - Sports agents selected at random or in case of revelations (i.e. 1 oversight procedure GAVE THE MANAGEMENT launched in 2018 and 2 in 2019).

The first wave of checks completed during the 2018/2019 season covered 6 FFF licensed agents CONTROL BODIES A NEW MISSION and represented: - €6.5 million of commissions paid by the clubs to the agents in question over the verified periode; OF FINANCIAL CONTROL - 101 operations carried out over the period. RELATIVE TO THE ACTIVITY The results of this first wave of checks are the following: - 3 procedures closed without any particular observation by the Professional Clubs Oversight Commission; OF SPORTS AGENTS AND - 3 files forwarded to the Federal Sports Agents Commission, including: - 2 files that resulted in penalties (fine, deferred suspension of the agent’s licence).

THE FLOWS GENERATED The 2nd wave of checks, which started in the spring of 2019, involves 9 agents and represents:

- €12.7 million of commissions paid by the clubs to the agents in question over the verified period; BY THIS ACTIVITY. - 152 operations carried out over the period.

2 Source: FIFA report “Intermediaries in international transfers 2019». 3 FIFA does not collect data on commissions paid to player intermediaries. 4 Figures as of 1 December 2019.

14 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 15 LIGUE 1 AND LIGUE 2 COMBINED KEY FIGURES 2018/2019

LIGUE 1/LIGUE 2 CUMULATIVE ACCOUNTS 2017/2018 2018/2019 VARIATION In € millions

Total operating income 1 907 2 114 + 11% Operating income -768 -835 -9% Result of transfer operations 929 740 -20% Current operating profit 161 -96 -160% Net profit (loss) -176 -160 + 9% Shareholders equity 821 956 + 16% Shareholder current accounts 658 642 -2% FIGU Cash net of indebtedness -180 -239 -32% RES

16 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 17 LIGUE 1/LIGUE 2 COMBINED INCOME STATEMENT 2017/2018 2018/2019 VARIATION In euro thousands

Broadcasting rights 910 949 1 016 161 +12% Sponsors - Advertising 386 886 456 126 +18% Gate receipts 209 298 221 985 +6% Other income (including merchandising) 400 194 419 367 +5% TOTAL OPERATING INCOME 1 907 327 2 113 640 +11%

Total payroll 1 114 835 1 225 871 +10% TOTAL BALANCE SHEET 2017/2018 2018/2019 VARIATION Social charges 331 533 361 948 +9% In euro thousands Transfer fees 377 916 409 682 +8% Agents’ fees 91 323 112 386 +23% Intangible assets: transfer fees 1 052 998 1 071 883 +2% Other expenses 759 352 839 209 +11% Other fixed assets 804 509 881 998 +10% Receivables relative to player transfers 802 186 771 840 -4% TOTAL OPERATING EXPENSES 2 674 959 2 949 095 +10% Other current assets 554 973 562 376 +1% Cash and short-term investments 400 499 319 328 -20% OPERATING RESULT (LOSS) -767 632 -835 455 -9% TOTAL ASSETS 3 615 165 3 607 425 0% RESULT OF TRANSFER OPERATIONS 928 667 739 567 -20% Shareholders equity 820 721 955 968 +16% Shareholder current accounts 657 979 641 602 -2% CURRENT OPERATING PROFIT 161 035 -95 888 -160% Provisions for liabilities and charges 61 074 65 491 +7% Financial liabilities 580 756 557 922 -4% Financial profit (loss) -122 126 - 53 462 +56% Liabilities relative to player transfers 492 996 484 835 -2% Exceptional profit (loss): Other -4 576 - 16 829 -268% Other liabilities 1 001 639 901 606 -10% Income tax -32 174 - 19 268 +40% Except. profit (loss): Current account write-offs/write-backs -178 476 25 553 +114% TOTAL LIABILITIES 3 615 165 3 607 425 0% NET PROFIT (LOSS) -176 317 -159 894 +9% PROFIT / LOSS FOR THE YEAR -176 317 -159 894 +9%

18 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 19 01 LIGUE 1

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1.1. KEY FIGURES 1.1.1. SUMMARY

COMBINED INCOME STATEMENT 2017/2018 2018/2019 VARIATION TOTAL BALANCE SHEET 2017/2018 2018/2019 VARIATION In euro thousands In euro thousands

Broadcasting rights 791 271 900 786 +14% Intangible assets: transfer fees 1 034 949 1 048 769 +1% Sponsors - Advertising 342 114 414 882 +21% Other fixed assets 666 867 745 461 +12% Gate receipts 190 621 201 123 +6% Receivables relative to player transfers 763 083 729 663 -4% Other income (including merchandising) 368 232 385 639 +5% Other current assets 493 839 498 702 +1% Cash and short-term investments 352 465 282 504 -20% TOTAL OPERATING INCOME 1 692 238 1 902 430 +12% TOTAL ASSETS 3 311 203 3 305 099 0% Total payroll 984 849 1 085 370 +10% Social charges 277 471 303 726 +9% Shareholders equity 732 110 889 211 +21% Transfer fees 367 834 397 035 +8% Shareholder current accounts 600 156 568 066 -5% Agents’ fees 83 229 104 223 +25% Provisions for liabilities and charges 50 036 58 005 +16% Other expenses 644 457 715 222 +11% Financial liabilities 543 572 522 280 -4% Liabilities relative to player transfers 482 652 469 647 -3% TOTAL OPERATING EXPENSES 2 357 840 2 605 576 +11% Other liabilities 902 677 797 889 -12%

OPERATING RESULT (LOSS) -665 602 -703 146 -6% TOTAL LIABILITIES 3 311 203 3 305 099 0%

RESULT OF TRANSFER OPERATIONS 840 356 634 998 -24% PROFIT / LOSS FOR THE YEAR -158 736 -126 403 +20%

CURRENT OPERATING PROFIT 174 754 -68 111 -139%

Financial profit (loss) -121 239 -51 464 +58% Exceptional profit (loss): Other -4 608 - 15 384 -234% Income tax -29 166 -17 740 +39% Except. profit (loss): Current account write-offs/write-backs - 178 477 26 295 +115%

NET PROFIT (LOSS) -158 736 -126 403 +20%

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1.1.2. EARNINGS

Development of total earnings (including result of transfers) Change of operating revenues

• Total earnings including the result of transfer operations amounted • Non-transfer earnings amounted to €1.902 billion in Ligue 1 for 2018/2019 to 2.537 billion euros in Ligue 1 in 2018/2019. (+€210 million compared to 2017/2018).

• Overall, the earnings are virtually unchanged from last season (+€4 million • The various types of earnings are up compared to 2017/2018, in particular compared to 2017/2018). broadcasting rights (+€110 million) and advertising sponsorship earnings (+€73 million). • This stagnation conceals a new breakdown, since non-transfer earnings increased (+€210 million) at the expense of results from transfer operations (-€205 million).

3000 2000 1902

2533 2537 1692 386 20% 1644 + 12% 2500 840 635 25% 368 22% 33% 1486 298 18% ROADCASTING 1500 201 11% BROADCASTING 1895 RIGHTS 341 23% RIGHTS 2000 1867 182 11% 191 11% 415 22% 251 13% 386 15% SPONSORS SPONSORS 381 20% ADVERTISING ADVERTISING 164 11% 345 21% 342 20% 298 16% 368 15% 1500 201 8% GATE 1000 GATE 341 18% RECEIPTS 325 22% RECEIPTS 182 10% 191 8% 415 16% 901 47% 819 50% 47% 164 9% 345 18% 13% OTHER 791 OTHER 1000 342 EARNINGS EARNINGS 325 18% 656 44% 901 36% 819 35% 791 31% TRANSFER 500 656 35% RESULT IN MILLIONS OF EUROS AND PERCENTAGE OF TOTAL IN MILLIONS OF EUROS AND PERCENTAGE 500 OF TOTAL IN MILLIONS OF EUROS AND PERCENTAGE

2015/2016 2016/2017 2017/2018 2018/2019 2015/2016 2016/2017 2017/2018 2018/2019

24 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 25 Non-transfer earnings allocation

100 98.3 100% 96.6 TOTAL PERCENTAGES 94.8 93.0 91.1 89.2 90% 87.1 84.9 82.4 79.7 80% 77.0 74.1 70.8 70% 67.0 63.1 60% 58.9 53.0

50% 46.2 40% 34.6 30% 20% 10% 11.6 6.8 5.9 4.2 3.9 3.7 3.4 2.9 2.7 2.7 2.6 0% 2.2 2.1 1.9 1.9 1.8 1.8 1.7 1.7 PERCENTAGES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

NICE LYON CAEN LILLE DIJON PARIS REIMS NÎMES CLUBS AMIENS RENNES ANGERS NANTES MONACO TOULOUSE BORDEAUX MARSEILLE ST-ÉTIENNE GUINGUAMP STRASBOURG MONTPELLIER

On the x-axis are the teams ranked from those with the highest non-transfer earnings to those with the lowest non-transfer earnings. On the y-axis is the cumulative percentage of Ligue 1 non-transfer earnings.

As in 2017/2018, the curve indicates a strong concentration of earnings on a small number of clubs:

• The three clubs with the highest non-transfer earnings (Paris, Lyon and Marseille) account for half of the Ligue 1 non-transfer earnings. This proportion would be 15% if all Ligue 1 teams had the same non-transfer earnings.

• On its own, PSG generates more than one third of the Ligue 1’s revenues, equal to all of the revenues of the lowest-earning 15 clubs.

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1.1.2.1. BROADCASTING RIGHTS

BROADCASTING RIGHTS FOR THE LIGUE 1 CHAMPIONSHIP BROADCASTING RIGHTS FOR CLUBS THAT TOOK PART IN EUROPEAN CUPS

The concentration of the non-transfer earnings of Ligue 1 clubs is limited by the distribution of the championship’s broadcasting rights, which is based EUROPEAN EUROPEAN LIGUE 1 OTHER TOTAL EUROPEAN CUP on a relatively egalitarian distribution system insofar as all Ligue 1 teams CLUB ITINERARY BROADCASTING BROADCASTING BROADCASTING BROADCASTING SHARE are guaranteed to receive a solidarity bonus of the championship rights RIGHTS RIGHTS RIGHTS RIGHTS of approximately €8.1 million, and club licensing rights of approximately Champions €5.4 million. However, three factors cause the broadcasting revenues LYON League last 16 €71.2 M €48.2 M €2.5 M €122 M 58% of the championship clubs to vary: firstly the bonuses linked to sports results that can be up to €23 million (PSG) and secondly the notoriety bonus PARIS Champions €91.6 M €59.9 M €5.1 M €156.6 M 59% that can be equal to €23 million (PSG), €20 million (Marseille) or €17 million (Lyon). League last 16 Champions MONACO League group €41 M €32.4 M €2.3 M €75.7 M 54% phases Distribution of broadcasting rights between Ligue 1 clubs RENNES Europa League last 16 €19.6 M €28 M €3.5 M €51.2 M 38%

100 100% 97.6 TOTAL PERCENTAGES 95.2 Europa League 92.6 BORDEAUX €13.1 M €28.6 M €2 M €43.7 M 30% 90.0 group phases 90% 87.4 84.7 81.8 78.9 80% 75.9 72.9 MARSEILLE Europa League €12.1 M €46.6 M €1.1 M €59.8 M 20% 69.4 group phases 70% 65.6 61.1 60% 56.4 51.6 TOTAL €248.6 M €243.7 M €16.5 M €509 M 49% 50% 45.9 40% 39.3

30.9 30% • Overall, half of the broadcasting rights collected by clubs qualified 20% 17.4 13.5 for European Cups come from European competitions. 10% 8.4 6.6 5.7 4.8 4.7 4.4 3.8 3.5 3.1 2.9 2.9 2.9 2.7 2.6 2.6 2.6 2.4 2.4 PERCENTAGES • European broadcasting rights are up sharply compared to the previous season 0% (+€81 million, due to the start of a new UEFA broadcasting rights cycle), which largely explains the €110 million increase of overall broadcasting rights. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 • The European share of broadcasting rights is higher for clubs

NICE in the Champions League than for clubs in the Europa League: more than 50% LYON CAEN LILLE DIJON PARIS REIMS NÎMES CLUBS AMIENS RENNES ANGERS NANTES for PSG, Monaco and Lyon versus 20% for Marseille. MONACO TOULOUSE GUINGAMP BORDEAUX MARSEILLE ST-ÉTIENNE STRASBOURG MONTPELLIER

The blue line indicates a relatively uneven distribution of the championship broadcasting rights:

• The top 3 clubs account for 39.3% of the broadcasting rights of the Ligue 1 championship.

• The top 5 clubs account for just over half of the rights.

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1.1.2.2. TICKETING RECEIPTS

Distribution of broadcasting rights by competition LIGUE 1 CHAMPIONSHIP GATE RECEIPTS Distribution of Ligue 1 championship gate receipts

100 100% 97.5 98.7 94.7 96,1 TOTAL PERCENTAGES 93.1 91.3 89.4 90% 87.2 85.0 82.8 80.3 80% 77.2 73.3 4% 70% 69.4 LFP RIGHTS - 65.4 60% 60.6 CHAMPIONSHIP 55.6 50% NATIONAL CUPS 45.8 RIGHTS % 40% 28 INTERNATIONAL CUPS RIGHTS 30% % 25.1 20.8 OTHER 20% 66 RIGHTS 3% 10% 9.8 5.0 4.8 4.0 3.9 3.9 3.1 2.5 0% 2.2 2.2 2.1 1.9 1.8 1.7 1.4 1.4 1.2 1.2 PERCENTAGES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NICE LYON CAEN LILLE DIJON PARIS REIMS NÎMES CLUBS AMIENS RENNES ANGERS NANTES MONACO TOULOUSE BORDEAUX MARSEILLE ST-ÉTIENNE GUINGUAMP STRASBOURG MONTPELLIER

• As in previous seasons, Ligue 1 gate receipts are much more concentrated • Overall, broadcasting rights linked to international cups represent 28% than the championship broadcasting rights. On their own, Lyon and Paris account of total broadcasting rights in 2018/2019, compared to 21% in 2017/2018. for 45.8% of the Ligue 1 gate receipts thanks to their very high fill rates As such, this confirms the fact that the increase of Ligue 1 broadcasting rights and ticket prices. is largely linked to the increase of European broadcasting rights.

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GATE RECEIPTS: ANALYSIS BY SPECTATOR CATEGORY GATE RECEIPTS: ANALYSIS OF CLUBS HAVING PARTICIPATED IN A EUROPEAN COMPETITION 2017/2018 2018/2019 VARIATION Spectator category (number) Average per match CLUB EUROPEAN EUROPEAN CUP TOTAL GROSS TICKETING SHARE Subscribers 12 783 13 239 4% ITINERARY GATE RECEIPTS GATE RECEIPTS OF EUROPEAN CUPS Per match payment 7 728 7 253 -6% Champions League Non-paying 2 509 2 532 1% LYON last 16 €10.2 M €41.8 M 24.4 %

TOTAL SPECTATORS 23 019 23 024 0% PARIS Champions League last 16 €10.5 M €50.5 M 20.8 % TOTAL RECEIPTS €190.6 M €201.1 M 5% MONACO Champions League group phases €0.6 M €2.7 M 20.5 % Average subscription price €23.57 €24.04 2% Spectators average price paid per match €25.77 €27.65 7% RENNES Europa League €3.3 M €9.6 M 34.2 % Paying spectators average price €23.57 €25.32 7% last 16

ALL SPECTATORS AVERAGE PRICE €21.74 €22.53 4% BORDEAUX Europa League group phases €0.6 M €7.9 M 7.4 %

Total gate receipts are up 5%. This increase is due to higher ticket prices: MARSEILLE Europa League group phases €0.6 M €19.7 M 3 % • The average number of spectators remained stable compared to 2017/2018. TOTAL €25.8 M €132.2 M 19.5 % • Overall, the average ticket price increased by €0.79 compared to 2017/2018.

• Overall, clubs playing in European Cups generated a fifth of their ticketing revenues from European matches.

• The share of European matches in ticketing revenues is higher for clubs playing in the Champions League than for clubs playing in the Europa League.

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1.1.2.3. SPONSORING / ADVERTISING, MERCHANDISING, COMMUNITY SUBSIDIES AND OTHER EARNINGSS

Distribution of gate receipts by competition Distribution of receipts for sponsoring / advertising, merchandising, community subsidies and other earnings

99.5 100 97.7 98.7 100% 95.6 96.7 TOTAL PERCENTAGES 94.3 91.7 93.0 89.9 88.1 90% 86.1 CHAMPIONSHIP 84.1 82.0 SUBSCRIPTIONS 79.6 80% 77.1 73.9 CHAMPIONSHIP 70% 69.7 (GAME NIGHT) 63.5 60% % EUROPEAN 56.4 38 % CUPS 50% 44 NATIONAL 40% CUPS 30% OTHER MATCHES 20% 10% % 7.1 6.2 % 1 4.2 % 3.2 2.5 2.4 2.1 2.1 2.0 1.8 1.8 13 5 0% 1.3 1.3 1.3 1.1 1.0 1.0 0.8 0.4 PERCENTAGES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NICE LYON CAEN LILLE DIJON PARIS REIMS NÎMES CLUBS AMIENS RENNES ANGERS • Gate receipts from league matches account for the bulk of clubs’ gate receipts NANTES MONACO TOULOUSE BORDEAUX MARSEILLE ST-ÉTIENNE

(82%). GUINGUAMP STRASBOURG MONTPELLIER • As during the 2017/2018 season, the gate receipts generated by subscribers is higher than the gate receipts generated by paying spectators per match.

• European Cup gate receipts account for 13% of the gate receipts of all Ligue 1 clubs. This overall figure masks the significant weight of European Cup gate receipts • The blue line indicates a very high concentration of these revenues. within the gate receipts of clubs qualifying for European Cups (see previous table). This concentration is explained by PSG, which alone accounts for 56.4% of total merchandising, subsidy and other earnings

• Community subsidies only total €14 million income for Ligue 1 clubs, representing 0.7% of their operating income.

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1.1.3. OPERATING EXPENSES

Evolution the operating expenses Distribution of operating expense

• Operating expenses amounted to €2.606 billion in Ligue i.e. €704 million euros more than the non-transfer earnings.

98.9 100 100% 96.0 97.4 TOTAL PERCENTAGES • After a 23% increase between 2016/2017 and 2017/2018, operating expenses 94.2 90.6 92.4 88.7 increased again in 2018/2019 (+11%). This increase is due to the increase 90% 86.7 84.4 81.9 of all expenditure items: 78.9 80% 75.6 - Total payroll: +10 %, 72.2 70% 68.3 - Social charges: +9 %, 63.4 - Agents’ fees: +25 %, 60% 57.4

- Transfer allowances: +8 %, 50% 48.2 - and Other expenses: +11 %. 40% 37.6

30% 27 20%

10.6 10.6 10% 9.2 6.0 4.9 3.9 3.4 3.3 2.9 2.6 0% 2.3 2.0 1.9 1.9 1.8 1.8 1.4 1.4 1.1 PERCENTAGES

3000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2606

2500 2358 715 27% NICE LYON CAEN LILLE DIJON PARIS REIMS NÎMES 644 27%+ 11% TOTAL CLUBS AMIENS RENNES ANGERS NANTES 1919 PAYROLL MONACO TOULOUSE BORDEAUX MARSEILLE ST-ÉTIENNE 2000 GUINGUAMP

1803 STRASBOURG 558 29% 397 15% SOCIAL MONTPELLIER 520 29% CHARGES 368 16% 1500 104 4% AGENTS’ FEES 232 12% 83 4% 304 12% 220 12% 277 12% 48 3% 44 2% TRANSFER 1000 242 13% 1085 42% ALLOWANCES 237 13% 985 42% • Just like the earnings, expenses are highly concentrated in Ligue 1: on their own, 782 43% 838 44% OTHER IN MILLIONS OF EUROS AND PERCENTAGE OF TOTAL IN MILLIONS OF EUROS AND PERCENTAGE EXPENSES 6 clubs account for more than two thirds of the total Ligue 1 operating 500 expenses.

• The share of PSG in the total operating expenses is lower than its share 2015/2016 2016/2017 2017/2018 2018/2019 in the total non-transfer earnings (27% versus approximately 34.6%). • Monaco is the Ligue 1 second club in terms of operating expenses (10.6%), but fourth in terms of earnings (5.9%).

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1.1.3.1. TOTAL PAYROLL 1.1.3.2. PAYROLL ANALYSIS

Distribution of the total payroll WAGE DETAILS BY PERSONNEL CATEGORY

In euro thousands 2017/2018 2018/2019 VARIATION

98.7 100 100% 95.6 97.2 TOTAL PERCENTAGES 93.6 Professional players 715 016 778 963 + 9% 91.7 89.6 87.6 90% 85.5 Base salary 660 402 723 643 + 10% 83.0 Variable bonuses 54 614 55 320 + 1% 80.1 80% 77.1 73.8 Professional coaches and staff 94 526 124 419 + 32% 70% 69.9 65.6 Base salary 84 171 113 006 + 34% 61.0 Variable bonuses 10 355 11 413 + 10% 60% 55.8 Other players 27 363 31 019 + 13% 50% 46.7 Base salary 23 232 25 509 + 10% 40% 37.2 Bonuses 4 131 5 510 + 33%

30% 26.7 Other personnel 138 750 145 409 + 5% 20% Base salary 133 537 142 065 + 5% Bonuses 5 213 3 344 + 4% 10.6 10% 9.4 9.2 5.2 4.6 4.4 3.9 3.3 3.0 2.8 2.6 0% 2.1 2.0 2.0 2.0 2.0 1.6 1.5 1.3 PERCENTAGES • Variable bonuses represent a small proportion of the wages, for all employee categories. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 • The category of coaches and professional staff saw its payroll increase the most (+32%), notably due to the termination payments paid over the course of the season. NICE LYON CAEN LILLE DIJON PARIS REIMS NÎMES CLUBS AMIENS RENNES ANGERS NANTES MONACO TOULOUSE BORDEAUX MARSEILLE ST-ÉTIENNE GUINGUAMP STRASBOURG MONTPELLIER

• The payroll is the main expense item for Ligue 1 clubs (54% of total operating expenses).

• The wages vary greatly from one club to another. As such, PSG accounts for more than a quarter of the Ligue 1 wage bill, i.e. as much as the 13 clubs with the lowest payrolls.

• Lyon is now third amongst Ligue 1 clubs in terms of wages, moving ahead of Marseille this season.

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Fixed and variable remuneration Cumulative percentage of player wages per decile

100% 98 96 90% 93 60% 92 91 89 54% 80% 85 82 70% 50% 60% 2017/2018 SEASON 50% 2018/2019 40% 40% SEASON 30% 30% 20% 18 10% 15 11 4 8 9 2 20% 0% 7 15% FIXED BONUSES FIXED BONUSES FIXED BONUSES FIXED BONUSES 9% PRO PLAYERS TRAINERS & STAFF OTHER PLAYERS OTHER PERSONNEL 10% 7% 5% 4% 3% 1% 1% 0% • The variable part of the wages is stable for professional players, staff 0% and all other players and other personnel. 0-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80% 80-90% 90-100%

Distribution of the total payroll PRO PLAYERS FIXED • As in 2017/2018, very significant disparities are noted between PRO PLAYERS the contractual wages of Ligue 1 players. The 10% best paid players VARIABLE are paid more than the 90% of the lowest paid players. Indeed, the 10% best paid players weigh for 54% of the total payroll of Ligue 1 players. % FIXED 13 1% OTHER PLAYERS OTHER PLAYERS VARIABLE 10% Analysis of the player 30/06 30/06 30/06 30/06 30/06 FIXED portfolio 2019 2020 2021 2022 2023 1% 2% % STAFF % STAFF 5 68 VARIABLE Number of players’ 22% 24% 33% 15% 6% contracts by maturity FIXED OTHER PERSONS VARIABLE OTHER PERSONS Aggregate players’ 17% 20% 29% 25% 9% wages by maturity

• Professional players account for 73% of the wages of Ligue 1 clubs, i.e. €779 million compared with €715 million in 2017/2018.

40 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 41 01

1.1.4. OPERATIONS INVOLVING

PLAYER TRANSFERS FROM FRENCH PROFESSIONAL CLUBS Evolution of the balance of 2016/2017 2017/2018 2018/2019 FOR THE 2018-2019 SEASON transfers in €M France sales 49.2 314.2 108.1 Foreign sales 260.4 581.4 677.7 France purchases -61.7 -354.2 -137.4 Foreign purchases -260 -560.5 -370.2 INTRA-LIGUE TRANSFERS TRADE BALANCE -12.1 -19.1 278.2 €677.7 M €106.6 M €1.5 M 61 TRANSFERS 25 TRANSFERS 3 TRANSFERS • Whereas in 2016/2017 and 2017/2018, the balance of transfers showed a deficit, it became positive in 2018/2019, with a sharp increase (+€297.3 M). SALES SALES

Cross transfers by league in €M Arrival league Departure league Foreign Ligue 1 Ligue 2 Total BALANCE BALANCE LIGUE 1 / FOREIGN LIGUE 1 / LIGUE 2 Foreign €307.5 M -€29.3 M Number of transfers 83 20 103 FOREIGN Amount 370.2 8.9 379.1 Ligue 1 Number of transfers 61 25 3 89 PURCHASES PURCHASES Amount 677.7 106.6 1.5 785.8 Ligue 2 €370.2 M €30.8 M Number of transfers 23 17 11 51 83 TRANSFERS 17 TRANSFERS Amount 48.7 30.8 6.1 85.6 TOTAL NUMBER 84 125 34 243 TOTAL AMOUNT OF TRANSFERS 726.4 507.6 16.5 1 250.5 DIRECTION OF PLAYER MOVEMENT Transfer operations in €M Sale price 785.8 Net book value of players sold 140.8 Transfers capital gains 645 Reversal of provisions for transfer fees 9.0 Provision allowances depreciation of transfer fees 19 Operating result (loss) 635

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1.1.5. RESULTS

Breakdown of net profit Analysis of the composition of the net income 840 800 635 600 381 2500 RECEIPTS 400 MATCHES 251 €201 M 193 176 OPERATING INCOME OTHER 200 EXCLUDING TRANSFERS EARNINGS 64 €412 M -25 2000 0 -56 -68 TRANSFER TEAM 21 RESULT SPONSORS COST -159 €415 M €1 493 M -57 -93 -200 -126 CURRENT OPERATING

IN MILLION OF EUROS REVENUES -250 -276 PROFIT 1500 -400 -317 TRANSFER NET PROFIT OPERATIONS -600 (LOSS) €635 M EXPENSES -666 OVERHEAD -703 1000 €563 M -800 BALANCE

AMORT. TV RIGHTS TRANSFER 500 €901 M FEES 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 €397 M RESULT OTHER NET EXPENSES AND - €126 M 0 EXCEPTIONNAL • The net income of Ligue 1 clubs is negative for the third consecutive season. €237 M

Formation of the net income

SPONSORS AMORT. TRANSFER

€415 M GATE RECEIPTS €397 M €201 M

OTHER EXPENSES €237 M NET NET TV RIGHTS PROFIT NET RECEIPTS €901 M (LOSS) EXPENSES €2 564 M -€126 M €2 690 M

TEAM COST €1 493 M TRANSFER OPERATIONS €635 M

OTHER EARNINGS OVERHEAD COSTS €412 M €563 M

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1.1.6. FINANCING OF THE CLUBS

Changes of equity and current accounts Coverage of fixed assets by shareholders’ equity and current accounts • Shareholder contributions (shareholders’ equity and shareholder current accounts) continued to increase relative to the last season, but to a lesser extent (+9% in 2018/2019 vs. +44% in 2017/2018) and amounted to €1,457 million. 2000 1979 1876 522 544 1794 1702 745 667 1500 1457 1306 1258 1201 387 1332 671 SHAREHOLDERS’ EQUITY 450 1114 AND CURRENT ACCOUNTS 1048 1500 646 995 FINANCIAL 568 1000 591 1035 1049 297 DEBT 919 600 PLAYERS INTANGIBLE IN EURO MILLIONS EURO IN ASSETS 1200 741 698 OTHER FIXED 500 587 ASSETS 457 468

900 573 889

450 732 EQUITY 412 0 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 IN EURO MILLIONS EURO IN 600 CURRENT ACCOUNTS

346 300 286 291 • The coverage of player intangible assets by shareholders’ equity and current accounts continues to be very high in 2018/2019 (139%).

0 • However, the overall coverage of fixed assets dropped back below 100% to 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 91%, which is nevertheless a satisfactory level.

Cash flow table (in €M) 2017/2018 2018/2019 Net cash inflows / outflows from operational activities -2.1 -327 Net cash inflows / outflows from investment -31.9 49 activities Net cash inflows / outflows from financing 167.7 201 activities Other cash inflows / outflows -0.8 -1.1 Net inflows / outflows during the reporting period 139.6 -78

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1.1.7. ANALYSIS OF ACHIEVEMENTS COMPARED 1.2. LINK BETWEEN SPORTS RESULTS AND FINANCIAL TO INITIAL BUDGETS 2018/2019 SEASON CHARACTERISTICS 1.2.1. SPORTS RESULTS Style de paragraphe (texte_courant) INITIAL ACTUAL GAP In euro thousands BUDGET TEAMS CLASSIFICATION POINTS Broadcasting rights 836 174 900 786 64 612 Paris 1 91 Sponsors - Advertising 390 556 414 882 24 326 Lille 2 75 Gate receipts 200 254 201 123 869 Lyon 3 72 Other income (including merchandising) 321 068 385 639 64 571 St-Étienne 4 66 TOTAL OPERATING INCOME 1 748 051 1 902 430 154 379 Marseille 5 61 Montpellier 6 59 Nice 7 56 Total payroll 1 240 133 1 389 096 148 963 Reims 8 55 Transfer costs 466 730 501 258 34 528 Nîmes 9 53 Other expenses 605 698 715 222 109 524 Rennes 10 52 TOTAL OPERATING EXPENSES 2 312 561 2 605 576 293 015 Strasbourg 11 49 Nantes 12 48 Angers 13 46 OPERATING RESULT (LOSS) -564 511 - 703 146 -138 635 Bordeaux 14 41 Amiens 15 38 RESULT OF TRANSFER OPERATIONS 602 031 634 998 32 967 Toulouse 16 38 Monaco 17 36 CURRENT OPERATING PROFIT 37 520 -68 111 -105 631 Dijon 18 34 Caen 19 33 Financial profit (loss) -77 975 - 51 464 26 511 Guingamp 20 27 Exceptional profit (loss): Other -2 390 - 15 384 - 12 994 Income tax -11 301 - 17 740 - 6 439 Except. profit (loss): Current account write-offs/write-backs 27 925 26 295 - 1 630 ELIMINATION NUMBER OF EUROPEAN NET PROFIT (LOSS) -26 221 -126 403 - 100 182 TEAMS MATCHES PLAYED CHAMPIONS LEAGUE Paris Saint-Germain Last 16 8 • Non-transfer earnings and non-transfer expenses are higher than in the original Olympique Lyonnais Last 16 8 budget. AS Monaco Group phase 6

• However, the increase of expenses is greater than the earnings increase, EUROPA LEAGUE which explains the ultimately sharp deterioration of the net income. Stade Rennais FC Last 16 10 Olympique de Marseille Group phase 6 Girondins de Bordeaux Group phase 12 WINNER OF THE LEAGUE CUP RC Strasbourg WINNER OF THE FRENCH CUP Stade Rennais FC

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Budget and sports ranking Number of profitable and loss-making clubs

1 10 2

3 9 8 4

6 6 6 7

8 5 9 4

11 2

SPORTS RANKING SPORTS 12

14 0 LOSSES > 1M PROFITS < 1M PROFITS > 1M 15

17 • 15 Ligue 1 clubs will be profitable in 2018/2019, as in the previous season. 18 All loss-making clubs have losses in excess of €1 million. 19

20 1 7 2 3 5 9 6 8 4 11 17 12 13 15 19 16 18 14 10 20 BUDGET RANKING

• In Ligue 1, the correlation between the budget and sports rankings is very strong, especially for the biggest budgets: three of the four “richest” clubs finish in the top five of the championship.

• Nîmes, lowest Ligue 1 budget, finishes 9th in the championship.

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1.2.2. SPORTS RISKS/OPPORTUNITIES AND PAYROLL

• The relationship between the wage bill and the number of championship points There are two major risks for Ligue 1 clubs: is relatively strong, but it does not explain everything: for the same payroll, the points differential can be nearly 30 points. • Relegation for those that have a budget to bet on maintenance.

• Symmetrically, there is great variability in the wage bill for teams that score • The lack of qualification for European Cups for those that have a budget the same number of points (nearly €40 million). to play in a European Cup.

• Thus, a higher wage bill is not an absolute guarantee of better sports results. The above graph analyses the relationship between the number of sport ranking points and the payroll over the past seven seasons. The findings of previous DNCG reports are still valid for the 2018/2019 season:

• No team with a total payroll in excess of 30 million euros has been relegated.

• With the exception of OGC Nice at the end of the 2012/2013 season, no team

€30 M €70 M with a payroll of less than €30 million has qualified for the Europa League via its classification in the championship. 100 • With the exception of Montpellier at the end of the 2011/2012 season, Lille at the end of the 2013/2014 season and Nice in 2016/2017, no team 80 with a payroll of less than €70 million has qualified for the Champions League. RELEGATION

MAINTAINING WITHOUT 60 EUROPEAN CUPS UEL QUALIFICATION 42 points 40 UCL QUALIFICATION

CHAMPIONSHIP POINTS

0 50 100 150 200 250 300 350 400

PERSONNEL WAGES (IN MILLIONS OF EUROS)

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1.2.3. STRONG IMPACT OF SPORTS RESULTS ON REVENUES

As such, we can identify three groups of teams: At the end of a season, there are four possible scenarios for a Ligue 1 team: relegation to Ligue 2, remaining in Ligue 1 without qualifying for the European Cup, • Group 1: clubs with a payroll in excess of €70 million. 88% of them qualifying for the Europa League or qualifying for the Champions League. have qualified for European Cups in the last eight seasons. The main risk for these clubs is the lack of qualification in the Champions League All four scenarios have very important consequences for club revenues: group phases. • Relegation: on average, non-transfer earnings for the two Ligue 1 teams • Group 2: clubs with a payroll of between €30 and 70 million. None of these clubs relegated at the end of the 2017/2018 season (Metz and Troyes) fell have been relegated in the last eight seasons. Of all these clubs, one club by €10 million between 2017/2018 and 2018/2019. Each club lost 33% in four has qualified for European Cups over the same period (Europa League: 17%, and 43% of its revenues, respectively. Champions League last 16: 6%). • Maintenance without European Cup: • Group 3: clubs with a payroll of under €30 million. More than a quarter of these clubs have been relegated in the last eight seasons (28%). - Between 10th and 6th places, the ranking bonuses range from €5.5 to 9.6 million. The risk of revenue variation for a team in the top half of the table is therefore approximately €4.1 million.

SPORTS RESULTS BASED ON PAYROLL (2011/2012 TO 2018/2019 SEASONS) - Between 17th and 11th places, the ranking bonuses range from €3.4 to 4.8 million. The risk of revenue variation for team in the second half of the table is therefore approximately €1.4 million. SHARE OF SHARE OF SHARE OF TEAMS TEAMS • Qualification for the Europa League: this competition generates revenues SHARE OF MAINTAINED TEAMS QUALIFIED PAYROLL RELEGATED WITHOUT QUALIFIED FOR FOR THE of up to €20 million for clubs, based on UEFA’s broadcasting rights TEAMS EUROPEAN THE EUROPA CHAMPIONS and ticket sales. In addition, teams that qualify for the Europa League CUPS LEAGUE LEAGUE via the championship receive Ligue 1 classification bonuses of €9.1 million for 6th place, €11.1 million for 5th and €12.8 million for 4th. Above €70 M 0% 13% 22% 66% between €30 and • Qualification for the final phase of the Champions League: 70 million 2% 74% 17% 6% this competition generates revenues of around €40-100 million for clubs, based on UEFA’s broadcasting rights and ticket sales. In addition, teams below €30 million 28% 70% 1% 0% that qualify for the Champions League via the championship receive Ligue 1 classification bonuses ranging from €14.7 million for 3rd place, to €19.4 million for the Ligue 1 champion.

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1.2.4. CORRELATION BETWEEN AVERAGE ANNUAL GROSS PAYROLL AND SPORTS SUCCESS

AVERAGE GROSS PAYROLL BASED ON THE SPORTS PERFORMANCE OF CLUBS (2011/2012 TO 2018/2019 SEASON)

150 144,9

120

69.0 60

30 34.4

20.2

0 RELEGATION MAINTENANCE UEL QUALIF UCL QUALIF

IN EURO MILLIONS

The observation made in the DNCG 2017/2018 report is still valid if the 2018/2019 season is included:

Over the past eight seasons:

• The teams that were relegated had an average payroll of just over €20 million.

• Teams that were maintained without qualifying for the European Cup had an average payroll of around €35 million.

• Teams that qualified for the Champions League had an average payroll of around €145 million.

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1.2.5. ANALYSIS BY GROUPS OF CLUBS FOR THE 2018/2019 SEASON

Following the above analyses, 3 groups of clubs can be distinguished according Cumulative net profit by group (2018/2019 season) to their overall payroll:

Group Clubs 30 2.8 Group 1: payroll above €70 million Paris, Marseille, Monaco, Lyon, Lille 0 -5.2 Group 2: payroll between €30 Bordeaux, Saint-Étienne, Rennes, and 70 million Montpellier, Nice, Toulouse, Nantes -30 Caen, Guingamp, Dijon, Strasbourg, Group 3: payroll below €30 million Amiens, Angers, Reims, Nîmes -60

-90

-124 -120 Cumulative operating income by group (2018/2019 season) -150 GROUP 1 GROUP 2 GROUP 3 0 -47.4 IN EURO MILLIONS

-100

-186.6 • The results by club groups differ significantly from last season due to the move -200 of LOSC from Group 2 to Group 1.

• On average, the operating results of the clubs are the following: -€469 million for group 1 clubs, -€187 million for group 2 clubs, -€47 million for group 3 clubs. -300 • In terms of net profit, only Group 3 manages to make a profit. The net profit of Group 1 deteriorated sharply compared with the 2017/2018 season (-€39 million), -400 while the results of Group 2 improved.

-469.2

-500 GROUP 1 GROUP 2 GROUP 3 IN EURO MILLIONS

58 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 59 02 LIGUE 2

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2.1. KEY FIGURES 2.1.1. SUMMARY

COMBINED INCOME STATEMENT 2017/2018 2018/2019 VARIATION TOTAL BALANCE SHEET 2017/2018 2018/2019 VARIATION In euro thousands In euro thousands

Broadcasting rights 119 678 115 375 -4% Intangible assets: transfer fees 18 049 23 114 +28% Sponsors - Advertising 44 772 41 244 -8% Other fixed assets 137 642 136 537 -1% Gate receipts 18 677 20 862 +12% Receivables relative to player transfers 39 103 42 177 +8% Other income (including merchandising) 31 962 33 728 +6% Other current assets 61 134 63 674 +5% Cash and short-term investments 48 034 36 824 -23% TOTAL OPERATING INCOME 215 089 211 210 -2% TOTAL ASSETS 303 962 302 326 0% Total payroll 129 986 140 501 +8% Social charges 54 062 58 222 +8% Shareholders equity 88 611 66 757 -25% Transfer fees 10 083 12 647 +25% Shareholder current accounts 57 823 73 536 +28% Agents’ fees 8 094 8 163 1% Provisions for liabilities and charges 11 038 7 486 -32% Other expenses 114 894 123 987 +8% Financial liabilities 37 184 35 642 -4% Liabilities relative to player transfers 10 344 15 188 +47% TOTAL OPERATING EXPENSES 317 119 343 519 +8% Other liabilities 98 962 103 717 +5%

OPERATING RESULT (LOSS) -102 030 -132 309 -30% TOTAL LIABILITIES 303 962 302 326 0%

RESULT OF TRANSFER OPERATIONS 88 311 104 569 +18% PROFIT / LOSS FOR THE YEAR -17 583 -33 454 -89%

CURRENT OPERATING PROFIT - 13 719 -27 740 -102%

Financial profit (loss) - 887 -1 998 -125% Exceptional profit (loss): Other 31 - 1 445 -4 616% Income tax - 3 008 - 1 528 +49% Except. profit (loss): Current account write-offs/write-backs 0 - 742 NA NET PROFIT (LOSS) - 17 583 -33 454 -90%

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2.1.2. EARNINGS

Development of total earnings (including result of transfers) Change of operating revenues

350 250 316 220 303 215 211 105 33% 204 300 88 29% 35 16% 270 32 15% 34 16% 252 200 33 16% 50 18% BROADCASTING BROADCASTING 250 + 4% RIGHTS 24 11% 19 9% RIGHTS 48 19% - 2% 21 10% 19 9% PONSORS 45 20% 45 21% SPONSORS 35 13% 32 11% 150 41 19% 200 33 13% 34 11% ADVERTISING 47 23% ADVERTISING 24 9% 19 6% 21 7% GATE GATE 19 7% 45 15% RECEIPTS 120 55% RECEIPTS 150 45 17% 116 53% 115 55% 47 19% 41 13% 100 OTHER 105 105% OTHER 120 39% EARNINGS EARNINGS 100 42% 116 43% 115 36% 105 TRANSFER IN MILLIONS OF EUROS AND PERCENTAGE OF TOTAL IN MILLIONS OF EUROS AND PERCENTAGE RESULT OF TOTAL IN MILLIONS OF EUROS AND PERCENTAGE 50 50

2015/2016 2016/2017 2017/2018 2018/2019 2015/2016 2016/2017 2017/2018 2018/2019

• Total earnings amounted to €316 million for Ligue 2 as a whole in 2018/2019, • Ligue 2 non-transfer earnings amounted to €211 million in 2018/2019, up 4% on the previous season. which represents 11.1% of the Ligue 1 non-transfer earnings.

• This growth was driven by a sharp rise of earnings on transfers (€17 million). • Overall, the Ligue 2 non-transfer earnings were stable compared with last season (-2%).

64 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 65 Cumulative percentage of operating revenues

100 100% 97.1 TOTAL PERCENTAGES 94 90.6 90% 86.9 83.3 80% 79.4 75.5 71.5 70% 67.4 63.3 60% 59.0 54.5 50% 49.9 44.1 40% 38.2 32.3 30% 25.7

20% 17.8

9.2 10% 8.5 8.0 6.6 5.9 5.9 5.8 4.6 4.4 4.4 4.1 4.1 4.0 4.0 3.8 3.7 3.7 3.3 3.1 2.9 0% PERCENTAGES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

LENS METZ NIORT CLUBS BREST NANCY TROYES BÉZIERS LORIENT PARIS FC PARIS GAZÉLEC ORLÉANS AUXERRE SOCHAUX LE HAVRE RED STAR GRENOBLE CLERMONT AC AJACCIO AC CHÂTEAUROUX VALENCIENNES

• Non-transfer earnings are much less concentrated in Ligue 2 than in Ligue 1. Together, the top 5 highest Ligue 2 revenues account for 38.2% of total Ligue 2 revenues (compared with 63.1% in Ligue 1).

• The revenues of Ligue 2 clubs are between €6.2 and 19.5 million.

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2.1.2.1. BROADCASTING RIGHTS

Distribution of broadcasting rights of Ligue 2 clubs Breakdown of broadcasting rights of Ligue 2 clubs by competition

100 100% 96.5 TOTAL PERCENTAGES 92.6 90% 88.6 84.5 80% 80.1 75.7 71.3 70% 66.8 62.2 60% 57.5 % LFP RIGHTS - 52.9 16 CHAMPIONSHIP 50% 48.2 43.5 NATIONAL CUPS 40% 38.3 % RIGHTS 32.9 7 30% 27.5 INTERNATIONAL CUPS 22.0 RIGHTS 20% % 16.0 OTHER 10% 8.5 7.5 77 RIGHTS 6.0 5.5 5.4 5.4 5.1 4.7 4.7 4.7 4.7 4.6 4.5 4.4 4.4 4.4 4.2 4.0 3.9 3.5 0% PERCENTAGES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 LENS METZ NIORT CLUBS BREST NANCY TROYES BÉZIERS LORIENT PARIS FC PARIS GAZÉLEC ORLÉANS AUXERRE SOCHAUX LE HAVRE RED STAR GRENOBLE CLERMONT AC AJACCIO AC CHÂTEAUROUX VALENCIENNES

• Most of the broadcasting rights collected by Ligue 2 clubs are championship rights. • The broadcasting rights of Ligue 2 are divided equally between the teams. This very balanced distribution can be explained by the manner in which • As during the last season, the share of National cups in the broadcasting rights the broadcasting rights are redistributed amongst Ligue 2 clubs, was very low (only 7%). The reason for this is that Ligue 2 clubs are lagging where the fixed share is predominant.. behind in these competitions.

• The first in the ranking (Metz) accounts for 8.5% of broadcasting rights, • The category of “Other rights” consists mainly of relegation aid and UEFA subsidies versus 10.6% for Lorient in 2017/2018. for training centres.

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2.1.2.2. GATE RECEIPTS

LIGUE 2 CHAMPIONSHIP GATE RECEIPTS GATE RECEIPTS: ANALYSIS BY SPECTATOR CATEGORY

Distribution of Ligue 2 championship gate receipts 2017/2018 2018/2019 VARIATION Spectator category (number) Average per match

Subscribers 3 494 3 650 +4.5% 100 98.1 99.2 99.6 100% 96.4 TOTAL PERCENTAGES 94.6 Per match payment 2 020 1 914 -5.3% 92.6 90.3 90% 87.7 Non-paying 1 296 1 269 -2.0% 85.0 81.8 80% 78.3 74.7 TOTAL SPECTATORS 6 810 6 833 +0.3% 70% 70.4 65.9 61.1 60% TOTAL RECEIPTS €19.1 M €20.9 M +9.4% 55.7 50% 49.4 Average subscription price €7.65 €7.61 -0.5% 42.7 40% Spectators average price paid per match €11.65 €13.63 +17.0% Paying spectators average price €9.11 €9.68 +6.2% 30% 28.5 20% ALL SPECTATORS AVERAGE PRICE €7.38 €7.88 +6.8% 14.3 10% 6.7 6.3 5.3 4.9 4.4 4.3 3.6 3.5 3.2 2.7 2.6 2.3 2.1 0% 1.7 1.7 1.1 0.4 0.3 PERCENTAGES

• The amount of gate receipts for the championship is more variable from one Ligue 2 club to another than the amount of the broadcasting rights.

• Lens, Metz, Brest and Nancy stand out from the other clubs: these four account for almost 55.7% of revenue, i.e. more than the other 16 clubs in Ligue 2.

• The ten Ligue 2 clubs with the lowest revenues account for only 15% of the total.

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2.1.2.3. SPONSORING / ADVERTISING, MERCHANDISING, 2.1.3. OPERATING EXPENSES COMMUNITY SUBSIDIES AND OTHER EARNINGS

• The sponsoring/advertising, merchandising, community subsidies Evolution the operating expenses and other earnings categories together account for 35% of total Ligue 2 non-transfer earnings. Community subsidies only total €11 million income for Ligue 2 clubs, representing 5% of their operating income.

• Within these categories, sponsorship and advertising have a preponderant 344 and rather stable weight compared to last season (55% compared to 58% 350 in 2017/2018). 317 124 36%

300 278 115 36% • These revenues are moderately concentrated: 10 clubs represent 68.8% 273 of the total. 106 39% 110 40% TOTAL 250 + 8% PAYROLL

13 4% SOCIAL 200 10 3% 8 2% CHARGES 8 3% 58 17% 4 2% 3 1% 54 17% AGENTS’ 4 2% 5 2% FEES 150 47 17% 47 16% Distribution of receipts for sponsoring / advertising, merchandising, 141 41% TRANSFER 130 41% ALLOWANCES community subsidies and other earnings 100 112 41% 113 41% OTHER

IN MILLIONS OF EUROS AND PERCENTAGE OF TOTAL IN MILLIONS OF EUROS AND PERCENTAGE EXPENSES 50

100 100% 98.2 95.5 TOTAL PERCENTAGES 92.6 89.4 2015/2016 2016/2017 2017/2018 2018/2019 90% 86.1 82.8 80% 79.2 75.7 72.0 70% 68.1 64.1 60% 59.6 54.6 50% 48.9 • Ligue 2 operating expenses amounted to €344 million (+8% compared 42.9 to 2017/2018). 40% 36.3 30% 29.3 • The breakdown of the operating expenses of Ligue 2 clubs in 2018/2019 21.6 is very similar to that of the 2017/2018 season. 20% 12.6 10% 8.9 7.7 7.0 6.6 6.0 5.7 5.1 4.5 4.0 3.9 3.7 3.6 3.6 3.3 3.3 3.3 2.9 2.6 0% 1.8 PERCENTAGES

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2.1.3.1. TOTAL PAYROLL

Distribution of operating expenses Distribution of the total payroll

100 100 100% 98,1 100% 98.1 95,7 TOTAL PERCENTAGES 95.6 TOTAL PERCENTAGES 93,2 93.1 90,8 90.4 90% 88,1 90% 87.6 85,3 84.6 82,5 81.4 80% 79,4 80% 78.0 75,9 74.4 71,9 70.3 70% 67,8 70% 65.7 63,2 60.9 60% 57,8 60% 55.1 52,2 50% 50% 49.2 45,6 42.2 40% 38,8 40% 35.1 30,9 30% 30% 27.6 22,8 20% 20% 19.9 12.1 10.8 11.1 10% 8.1 7.9 10% 8.8 7.7 7.5 6.8 6.6 7.2 6.9 6.0 5.8 5.5 5.4 4.6 4.1 4.0 4.8 4.6 4.1 3.6 3.1 2.8 2.8 2.7 2.5 2.4 2.4 3.5 3.4 3.3 3.0 2.8 2.7 2.5 2.5 0% 1.9 PERCENTAGES 0% 1.8 PERCENTAGES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 LENS LENS METZ METZ NIORT NIORT CLUBS BREST CLUBS BREST NANCY NANCY TROYES TROYES BÉZIERS BÉZIERS LORIENT LORIENT PARIS FC PARIS GAZÉLEC PARIS FC PARIS GAZÉLEC ORLÉANS ORLÉANS AUXERRE AUXERRE SOCHAUX SOCHAUX LE HAVRE LE HAVRE RED STAR RED STAR GRENOBLE GRENOBLE CLERMONT CLERMONT AC AJACCIO AC AC AJACCIO AC CHÂTEAUROUX CHÂTEAUROUX VALENCIENNES VALENCIENNES

• Just like last season, operating expenses are slightly more concentrated • There is little payroll concentration in Ligue 2: the top 3 represents only 27.6% than non-transfer earnings in Ligue 2. There are therefore slightly of the total payroll (26% in 2017/2018). more disparities in the expenses than in earnings between Ligue 2 clubs.

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2.1.3.2. PAYROLL ANALYSIS

WAGE DETAILS BY PERSONNEL CATEGORY Fixed and variable remuneration

REMUNERATION BY WAGE CATEGORIES 2017/2018 2018/2019 VARIATION In euro thousands 100% Professional players 76.8 82.1 7% 98 Base salary 66.3 71.1 7% 90% 94 90 91 Variable bonuses 10.5 11 5% 80% 86 87 82 80 Professional coaches and staff 13.4 16.4 22% 70% Base salary 11 13.1 19% 60% 2017/2018 Variable bonuses 2.4 3.2 34% SEASON 50% Other players 5.9 5.8 -1% 2018/2019 Base salary 5.3 5.3 1% 40% SEASON Bonuses 0.6 5.1 -14% 30% Other personnel 33.8 36.2 7% 20% 20 Base salary 31.8 35.6 12% 18 10% 14 13 Bonuses 2 0,6 -72% 10 9 0% 6 2 FIXED BONUSES FIXED BONUSES FIXED BONUSES FIXED BONUSES Variable remuneration is considered to be the share of wages received PRO PLAYERS TRAINERS & STAFF OTHER PLAYERS OTHER PERSONNEL once objectives are reached, both individually and collectively. These bonuses may be based on sports results (European Cup qualification, maintenance, final ranking, Cup itinerary, etc, ...) as well as on the presence of players • Variable bonuses account for a small proportion of wages for all personnel categories in the personnel (actual presence on the match sheet, number of starts, in Ligue 2 clubs. number of matches played, ...). • The variable share of wages is very stable compared to 2017/2018.

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Distribution of the total payroll Cumulative percentage of player wages per decile

30% 28% PRO PLAYERS FIXED 25% PRO PLAYERS VARIABLE % FIIXED 20% 25 OTHER PLAYERS 16% OTHER PLAYERS 15% % VARIABLE 13% 2% FIXED 10% 52 10% 9% % STAFF 7% 9 STAFF 6% VARIABLE % 5% 4% 4 3% % FIXED 2% 8 OTHER PERSONS 0% VARIABLE 0-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80% 80-90% 90-100% OTHER PERSONS

• The salaries of players are much more homogeneous in Ligue 2 than in Ligue 1. The top 10% of the highest paid players in Ligue 2 only represent 28% • Professional players account for 60% of the wages of Ligue 2 clubs. of the Ligue 2 payroll.

• The wages of non-players and staff represents 29% of the salaries paid by Ligue 2 clubs, compared with 14% of the salaries paid by Ligue 1 clubs. Analysis of the player 30/06 30/06 30/06 30/06 30/06 portfolio 2019 2020 2021 2022 2023

Number of players’ contracts 44% 31% 18% 1% 5% by maturity

Aggregate players’ wages 39% 34% 19% 1% 7% by maturity

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2.1.4. OPERATIONS INVOLVING PLAYERS

PLAYER TRANSFERS FROM FRENCH PROFESSIONAL CLUBS Evolution of the balance 2016/2017 2017/2018 2018/2019 FOR THE 2018-2019 SEASON of transfers in €M France sales 13.1 48.9 36.9 Foreign sales 17 11.3 48.7 France purchases -0.6 -8.9 -7.6 Foreign purchases -2.5 -5.8 -8.9 INTRA-LIGUE 2 TRANSFERS TRADE BALANCE 27 45.5 69.1 €48,7 M €6.1 M €30.8 M 23 TRANSFERS 11 TRANSFERS 17 TRANSFERS

SALES SALES Cross transfers by league in €M Arrival league Departure league Foreign Ligue 1 Ligue 2 Total Foreign BALANCE LIGUE 1 / LIGUE 2 Number of transfers 83 20 103 LIGUE 1 / FOREIGN BALANCE Amount 370.2 8.9 379.1 €39.8 M -€29.3 M Ligue 1 FOREIGN Number of transfers 61 25 3 89 Amount 677.7 106.6 1.5 785.8 Ligue 2 PURCHASES PURCHASES Number of transfers 23 17 11 51 Amount 48.7 30.8 6.1 85.6 €8,9 M €1,5 M 20 TRANSFERS 3 TRANSFERS TOTAL NUMBER 84 125 34 243 TOTAL AMOUNT OF TRANSFERS 726.4 507.6 16.5 1 250.5

DIRECTION OF PLAYER MOVEMENT

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2.1.5. RESULTS

• All performance indicators deteriorated compared to the 2017/2018 season, Formation of the net income except for the earnings from transfers, which continue to increase (+18%).

• Net profit fell from -€18 million in 2017/2018 to -€33 million in 2018/2019.

SPONSORS AMORT. TRANSFER

€41 M GATE RECEIPTS €13 M €21 M

OTHER EXPENSES €6 M Breakdown of net profit NET NET TV RIGHTS PROFIT NET RECEIPTS €115 M (LOSS) EXPENSES €316 M -€33 M €349 M 115 104 88 TEAM COSTS 65 50 €207 M 48 TRANSFER OPERATIONS 29 RESULT EXCLUDING €105 M 15 TRANSFERS -11 -8 OTHER EARNINGS OVERHEAD COSTS 0 -18 -14 TRANSFER -8 -27 EARNINGS -16 -18 €34 M €124 M -35 -21

IN MILLION OF EUROS -58 -33 NET PROFIT -45 -69 (LOSS) CURRENT -85 -102 OP. PROFIT -131 -135

2014/2015 2015/2016 2016/2017 2017/2018 2018/2019

82 2018/2019 SEASON - DNCG REPORT 2018/2019 SEASON - DNCG REPORT 83 Analysis of the composition of the net income

350 GATE RECEIPTS €21 M 300 OTHER EARNINGS €34 M

SPONSORS 41 M€

200 TEAM COST REVENUES TRANSFER €207 M OPERATIONS €105 M EXPENSES

100 BALANCE

TV RIGHTS OVERHEAD €115 M €124 M

AMORT. 0 TRANSFER FEES OTHER €13 M NET PROFIT EXPENSES (LOSS) €6 M -€33 M

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2.1.6. FINANCING OF THE CLUBS

Change of shareholders equity and current accounts Coverage of fixed assets by shareholders’ equity and current accounts

150 200 58 183 74 37 177 36 161 160 120 37 155 38 137 150 145 148 137 32 36 144 135 146 141 131 90 123 SHAREHOLDERS EQUITY 86 88 AND CURRENT ACCOUNTS 109 77 SHAREHOLDERS 100 FINANCIAL EQUITY DEBT 67

60 MILLIONS EURO IN IN EURO MILLIONS EURO IN CURRENT PLAYERS INTANGIBLE ACCOUNTS 66 63 ASSETS 23 61 OTHER FIXED 13 50 ASSETS 30 30 43

23 18 2 4 4 0 0 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019

• The trend seen in the last three seasons has been confirmed: • The upward trend in shareholders equity and current accounts since 2015/2016 shareholders equity and current accounts are significantly higher does not continue in 2018/2019. There was a decrease of shareholders than player intangible assets. equity (-€21 million compared to 2017/2018) which was not fully offset by the increase of the current accounts (+€16 million).

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2.1.7. ANALYSIS OF ACHIEVEMENTS COMPARED 2.2. LINK BETWEEN SPORTS RESULTS TO INITIAL BUDGETS 2018/2019 SEASON AND FINANCIAL CHARACTERISTICS 2.2.1. SPORTS RESULTS INITIAL ACTUAL GAP In euro thousands BUDGET

Broadcasting rights 111 436 115 375 3 939 TEAMS CLASSIFICATION POINTS Sponsors - Advertising 49 384 41 244 - 8 140 Metz 1 81 Gate receipts 21 133 20 862 - 271 Brest 2 74 Other income (including merchandising) 29 456 33 728 4 272 Troyes 3 71 TOTAL OPERATING INCOME 211 409 211 210 - 199 Paris FC 4 65 Lorient 5 63 Lens 6 63 Total payroll 172 897 198 723 25 826 Le Havre 7 54 Transfer costs 17 442 20 810 3 368 Orléans 8 52 Other expenses 107 154 123 987 16 833 Grenoble 9 50 TOTAL OPERATING EXPENSES 297 493 343 519 46 026 Châteauroux 10 48 Clermont 11 48 Niort 12 47 OPERATING RESULT (LOSS) - 86 086 -132 309 - 46 223 Valenciennes 13 43 Nancy 14 42 RESULT OF TRANSFER OPERATIONS 54 143 104 569 50 426 Auxerre 15 41 Sochaux 16 41 CURRENT OPERATING PROFIT -31 943 -27 740 4 203 AC Ajaccio 17 40 Gazélec 18 39 Financial profit (loss) - 1 973 -1 998 - 25 Béziers 19 38 Exceptional profit (loss): Other 4 256 -1 445 - 5 701 Red Star 20 30 Income tax 375 - 1 528 - 1 903 Except. profit (loss): Current account write-offs/write-backs 0 -742 - 742 NET PROFIT (LOSS) - 29 285 -33 454 - 4 169

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Budget and sports ranking Number of profitable and loss-making clubs

2 8 8 3 8

4 7

5 6 6

7 5

8 4 9

10 3 3 11 2

SPORTS RANKING SPORTS 12

13 1 14 1

15 0 LOSSES > 1M LOSSES < 1M PROFITS < 1M PROFITS > 1M 16

19 • 11 Ligue 2 clubs are profitable in the 2018/2019 season, versus 14 20 the previous season. The number of heavily loss-making clubs 1 7 2 3 5 9 6 8 4 11 17 12 13 15 19 16 18 14 10 20 (loss > €1 million) increased from 4 to 8. BUDGET RANKING

• The relationship between budget ranking and sports ranking is very pronounced in Ligue 2 this season: the champion, Metz, is the club with the biggest budget while the last three in the championship are the three clubs with the smallest budgets.

90 2018/2019SAISON 2018-2019 SEASON - - RAPPORT DNCG REPORT DNCG 2018/2019 SEASON - DNCG REPORT 91 2.2.2. SPORTS RISKS/OPPORTUNITIES AND PAYROLL

€10 M €7,5 M

100

80 RELEGATION TO NATONAL 1 MAINTENANCE IN LIGUE 2 60 PROMOTION TO LIGUE 1

CHAMPIONSHIP POINTS 42 points 40

20 0 10 20 30 40 50

PERSONNEL WAGES (IN MILLIONS OF EUROS)

The following regular features have been observed in Ligue 2 over the past eight seasons:

• The vast majority of the teams that were relegated had a payroll of under €7.5 million.

• No team with a payroll above €10 million was relegated.

• With the exception of Gazélec at the end of the 2014/2015 season and Amiens in 2016/2017, all teams that were promoted to Ligue 1 had a payroll of more than €7.5 million.

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2.2.3. STRONG IMPACT OF SPORTS RESULTS ON REVENUES

SPORTS RESULTS BASED ON PAYROLL (2011/2012 TO 2018/2019 SEASONS) At the end of a season, three scenarios are possible for Ligue 2 teams: dropping down to National, remaining in Ligue 2 and advancing to Ligue 1.

• The revenues of clubs relegated to National decline very sharply. RISK OF CHANCE OF CHANCE OF PAYROLL RELEGATION STAYING PROMOTION TO NATIONAL 1 IN LIGUE 2 TO LIGUE 1 • The revenues of clubs that remain in Ligue 2 vary relatively little from season to season.

Above €10 million 0% 73% 27% • The non-transfer earnings of the two teams promoted at the end between €7.5 and of the 2017/2018 season increased more than their expenses between 10 million 8% 70% 22% 2017/2018 and 2018/2019: below €7.5 million 26% 70% 4% - The non-transfer earnings of Reims increased from €15.3 million to €41.4 million (multiplied by 2.7), while its expenses increased The table is read line by line. Example: among teams with a payroll from €22.3 to 48.6 million (multiplied by 2.2). of under €7.5 million, 26% were relegated, 70% were maintained and 4% advanced to Ligue 1. - The non-transfer earnings of Nîmes increased from €9.3 million to €32.3 million (multiplied by 3.5), while its expenses increased With regard to the observed regular features, we can thus identify three groups from €12.7 to 28.5 million (multiplied by 2.2). of Ligue 2 teams:

• Group 1: clubs with a payroll in excess of €10 million. These teams have almost no risk of being relegated. Most of the time they remain where they are, with a less than 3 in 10 chance of advancing to Ligue 1.

• Group 2: clubs with a payroll of between €7.5 and 10 million. For these teams, all three scenarios are possible, but remaining in Ligue 2 is most common (70% of cases). The main difference between these teams and Group 1 is the risk of relegation.

• Group 3: clubs with a payroll of under €7.5 million. These teams have a one in four chance of being relegated to National 1 and have virtually no chance of advancing to Ligue 1. The main risk for these teams is relegation. A payroll of €7.5 million in Ligue 2 is therefore almost equivalent to a payroll of €30 million in Ligue 1. In both cases, teams that do not cross these thresholds have almost a one in four chance of being relegated to the lower division.

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2.2.4. CORRELATION BETWEEN AVERAGE ANNUAL GROSS PAYROLL AND SPORTS SUCCESS

AVERAGE GROSS PAYROLL BASED ON THE SPORTS PERFORMANCE OF CLUBS (2011/2012 TO 2018/2019 SEASON)

12 12.4

9 8.7

6 5.5

0 RELEGATION MAINTAINED IN L2 PROMOTION TO L1

IN EURO MILLIONS

Over the past eight seasons:

• Teams relegated to National 1 had an average payroll of €5.5 million.

• Teams that remained in Ligue 2 had an average payroll of €8.7 million.

• Teams that were promoted to Ligue 1 had a payroll of €12.4 million.

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2.2.5. ANALYSIS BY GROUPS OF CLUBS FOR THE 2018/2019 SEASON

Subsequent to the above analyses, 3 groups of clubs can be distinguished Community of net profit by group according to their overall payroll in 2018/2019:

0 Metz, Brest, Troyes, Lens, Lorient, -2.0 Group 1: payroll above €10 million Le Havre, Nancy, Auxerre

Group 2: payroll between €7.5 -5 and 10 million Paris FC, Valenciennes, Sochaux -7.3 Orléans, Grenoble, Clermont, Group 3: payroll below €7.5 million Châteauroux, Niort, AC Ajaccio, -10 Gazélec, Béziers, Red Star

-15

Cumulative operating income by group -20

-24.2 0 -25 -12.3 GROUP 1 GROUP 2 GROUP 3 -17.9 -20 IN EURO MILLIONS

-40

• All three groups generated losses in the 2018/2019 season, especially Group 1. -60

-80

-102.1 -100

-120 GROUP 1 GROUP 2 GROUP 3 IN EURO MILLIONS

• The operating loss in Ligue 2 is mainly due to clubs with payroll costs in excess of €10 million (Group 1).

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3.1. EUROPEAN BENCHMARK FOR EARNINGS 3.2. CORRELATION BETWEEN SPORTS RESULTS AND TURNOVER EXCLUDING TRANSFER OPERATIONS

• Among French clubs that played in the European Cup, PSG stands out The entry ticket for Ligue 1 is lower than that of other major European leagues: with a budget more than twice the average budget of the Premier League clubs. • Over three seasons, Ligue 1 clubs generated revenues in excess of €450 million • Lyon has a budget between the average budgets of German on three occasions compared with ten times in the Premier League. and English clubs. Marseille and Monaco are around the average Italian and Spanish budgets. Rennes and Bordeaux have budgets • The lowest Premier League turnover was €103 million compared lower than the average budget of clubs in the big five leagues. with €25 million in Ligue 1.

The turnover above which a club is unlikely to be relegated is lower in Ligue 1: Comparison of the earnings* of the 6 French clubs that played a European Cup in 2018/2019, with the average earnings • No Ligue 1 club with a turnover of €40 million has been relegated. of the 5 major European leagues • This non-relegation threshold is equal to €150 million in the Premier League.

Over three seasons, the entry ticket for European Cups is lower in Ligue 1. The minimum turnover at which 90% of the clubs participate in a European Cup is: €80 M €130 M • €100 million in Ligue 1, • €160 million for the 58 clubs in question in La Liga, Bundesliga and Serie A, • €280 million for Premier League clubs. €71 M €112 M €221 M €659 M

Ligue 1

0 100 200 300 600 €40 M €120 M

100 €95 M €157 M €272 M

80 RELEGATION

€115 M €175 M MAINTAINING WITHOUT EUROPEAN CUPS 60 UEL QUALIFICATION UCL QUALIFICATION CHAMPIONSHIP POINTS 40 42 points

* Revenue excluding transfer operations; Source: Source: DNCG, UEFA Club Licensing Benchmarking Report 2018. Note: figures for 2018/2019 financial year for Ligue 1 and 2017/2018 financial year for other leagues. 20 0 100 200 300 400 500 600 700 800

PERSONNEL WAGES (IN MILLIONS OF EUROS)

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Premier League Other clubs in La Liga, Bundesliga and Serie A

€150 M €250 M €90 M €200 M

100 100

80 RELEGATION 80 RELEGATION

MAINTAINING WITHOUT MAINTAINING WITHOUT 60 EUROPEAN CUPS EUROPEAN CUPS UEL 60 UEL QUALIFICATION QUALIFICATION 40 UCL UCL QUALIFICATION QUALIFICATION

CHAMPIONSHIP POINTS CHAMPIONSHIP POINTS 40 20

0 20 100 200 300 400 500 600 700 800 0 100 200 300 400 500 600 700 800

PERSONNEL WAGES (IN MILLIONS OF EUROS) PERSONNEL WAGES (IN MILLIONS OF EUROS)

Perimeter: sample of 58 clubs in La Liga, Bundesliga and Serie A in 2017/2018.

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3.3. COMPARISON OF THE AMOUNTS OF TRANSFERS OVER TURNOVER

Ligue 1 Ligue 2

The ratio of the amount of transfers over turnover excluding transfers is 33% The amount of transfers over the turnover excluding transfers within Ligue 2 in Ligue 1. is equal to 47%. However, this figure is inflated by Monaco (139%), which stands out clearly, and to a lesser extent by a group of three clubs (Nice, Lille and Toulouse), in which One club stands out on the upside: Lorient (144%). transfer amounts are well above the averages for other European countries.

Conversely, more than half of the Ligue 1 clubs are below 30%.

5,0 5,0 ANGERS MARSEILLE / REIMS GUINGAMP DIJON / ST-ÉTIENNE STRASBOURG RENNES AMIENS LIGUE 1 LYON / MONTPELLIER CAEN NANTES / BORDEAUX NICE LILLE TOULOUSE MONACO

NÎMES PARIS BÉZIERS AJACCIO AC ORLÉANS GAZÉLEC / GRENOBLE SOCHAUX CHÂTEAUROUX BREST CLERMONT VALENCIENNES NIORT LIGUE 2 NANCY TROYES LENS AUXERRE METZ LE HAVRE FC PARIS LORIENT RED STAR

0,5 0,5 ITALIE ITALIE SUISSE SUISSE RUSSIE RUSSIE TURQUIE UKRAINE UKRAINE ESPAGNE ESPAGNE TURQUIE BELGIQUE PAYS-BAS BELGIQUE AUTRICHE PAYS-BAS AUTRICHE PORTUGAL PORTUGAL DANEMARK DANEMARK ALLEMAGNE 0 20 40 60 80 100 ALLEMAGNE ANGLETERRE 0 20 40 60 80 ANGLETERRE

25% 50% 75% 100% 139% 25% 50% 75% 100% 144% -4,0 -4,0 Note: perimeter difference between Ligue 1 figures and figures from other European leagues. Note: perimeter difference between Ligue 2 figures and figures from other • European Championships: transfer amounts = Transfer price (2018 European leagues. for Eastern European Championships, 2017/2018 otherwise), source UEFA Club Licensing Benchmarking Report 2018. • European Championships: transfer amounts = Transfer price (2018 for Eastern European Championships, 2017/2018 otherwise), source • Ligue 1: transfer amounts = capital gains on disposal 2018/2019. UEFA Club Licensing Benchmarking Report 2018.

• Ligue 2: transfer amounts = capital gains on disposal 2018/2019.

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