PSG Should Buy Players at Home or Risk Boring Fans, Aulas Says

Paris Saint-Germain, the biggest- spending club in European soccer this offseason, should buy players from French rivals to boost their revenue and ensure a competitive domestic league, Lyon President Jean-Michel Aulas said.

PSG, backed by an investment arm of the Qatari government, spent 140 million euros ($181 million) on players including AC Milan duo Zlatan Ibrahimovic and Thiago Silva as well as Argentine attacker Ezequiel Lavezzi from Napoli. Brazilian forward Lucas Moura, a player wanted by Manchester United, will join from Sao Paulo in January. The only new arrivals from France were two youngsters from an amateur league while four joined from Italian teams.

Buying players from French clubs would stimulate the local soccer economy, allowing teams to reinvest cash from PSG into improving their rosters, said Aulas. He’s taken Lyon from the second division to the top league, where it secured a record seven straight championships between 2002 and 2008.

“Paris Saint-Germain needs competition,” Aulas said in an interview in Geneva. “If not, the product isn’t very interesting. That’s why Spain and England have interest from abroad. Spain has two or three very big teams and in England there’s at least four or even five with Tottenham.”

Before the Qataris arrived in Paris, Lyon was regularly among the league’s biggest spenders, using revenue from playing in the Champions League to outbid rivals for talent.

“It reminds of what we did during a certain period,” said Aulas. “We bought a lot but we bought French.”

Foreign Teams

Still, it was by buying players from foreign teams, including Brazilians Juninho Pernambucano, Cris and Giovane Elber, to play alongside French stars such as Karim Benzema and Florent Malouda that helped Lyon dominate its rivals.

PSG couldn’t immediately comment on Aulas’s views. Its spending comes at a time where the majority of top European teams are paring costs to meet new financial control regulations established by European soccer’s governing body. Breaches of the rules that are designed to stem losses could lead to sanctions including a ban from the Champions League and Europa League from the 2014-15 season.

“Some clubs are continuing to buy a lot of expensive players,” said Aulas, who this summer cut 30 percent of player costs by selling some established stars, including French national team goalkeeper Hugo Lloris to Tottenham. “I think everybody knows what they need to do. What we’re seeing is perhaps the moment when those who continue to invest are saying to themselves, ‘It’s the last year that we can.”’

Financial Evaluation

Clubs will be evaluated ahead of the 2014-15 season by a UEFA panel. Losses of as much as 45 million euros across three previous seasons or a maximum single-season loss of 15 million euros can be covered by an equity investment. The maximum loss will be reduced to 30 million euros for the following seasons.

Lyon last year finished fourth in the French championship, 18 points behind winner Montpellier. The club had a loss of 25 million euros on revenue of 120 million euros, according to Aulas. He said the new regulations have prompted a new approach at his team, where lower salaries and focus on youth have replaced buying big names.

Losing Lloris’s 4.4 million-euro annual salary and getting 15 million euros from Tottenham was “very good,” he said.

Explaining the transition to fans that only care about success isn’t easy.

“It’s very important to explain the reality and the truth,” said Aulas, who’s personally invested 50 million euros into Lyon. “The truth is we can’t carry on having expenses that are greater than revenues. It’s very important that we drop our wage bill.”

Youth Academy

Lyon spent 10 million euros on a youth academy that opened two years ago and plans to move to a new stadium by 2015, according to Aulas. South Korean car manufacturer Hyundai Motor Co. signed as the team’s partner and may even put its name to Lyon’s planned 61,556-seat Stade des Lumieres, according to Aulas.

The plans have attracted investment offers, Aulas said, and he may cash in once the team moves to its new home.

“Today I am the main shareholder and we have some offers from some very good investors because we have the stadium, because we have the academy and the team,” he said.

To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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