Crowds gather in various stadiums on Saturday or Sunday afternoons and the teams roll off the ball from the center of the stadium after the referee’s whistle. Most people believe that that is the kick-off time. However, the kick-off takes place several months or even years before. Hundreds or even thousands of people take part in the preparation of the kickoff. Those people might be individuals or even multibillion-dollar companies from all part of the world.
Most football enthusiasts will see football as a game of commitment, passion, and discipline. Others will see it as a game involving two teams of eleven men each on a field and hundreds or even thousands of spectators shouting on the benches. However, others believe that football is a profitable business.
The evolution of football business
Did you know that you could take a university honors degree combined with a course in business management and football in the UK? That is true. Also, business schools and psychology departments are studying the lessons learned from sporting management experience. The corporate sector is playing an important role in this game too. Lawyers, management consultants, and accountants are starting to specialize in sporting divisions. That is a good indication that there is a professional part of football.
Within the last few decades, football has rapidly evolved from a sport and it is now a multi-million dollar business. Some years ago, football clubs belonged to local merchants who engaged in football-related businesses. They sold their products to the football supporters within their area, but later entrepreneurs from all parts of the world started investing in clubs – not for passion but to make profits and to reach global customers. Here are some of the things you might have witnessed.
– The increasing TV deals
Within the last 15 years, television viewership has reduced due to technological advancements like DVRs and streaming services. However, live sports are immune to the trend. To televise the games, networks have to pay huge amounts. For example, in February 2016, ESPN signed a nine-year $24-billion media rights deal with Turner Sports.
After the deal came into effect in the 2016-17 season, both Turner Sports and ESPN combined to pay $2.6 billion to NBA each year. Considering a deal they had signed in 2007, the two networks had to pay $930 million each year. The media rights deal represented a 180 percent increase. However, the deal increased ESPN’s digital, television, audio, highlights, and international NBA rights
– Increasing licensing and merchandising deals
In the last 20 years, the biggest football competitions, clubs, and leagues in Europe have changed themselves into brands. The brands are appealing to their fan bases and are attracting more people from all parts of the world something that makes them powerful marketing tools. Merchandising allows them to exploit their brands and images of their key players. There are many merchandising opportunities. The official shops of clubs offer replica shirts, beach towels, keyrings, masks of the key player’s faces and neck, socks and scarfs. You are likely to see logos of clubs on many other products. That is because the clubs rely on them to make money. For example, the Adidas and Real Madrid 10 years Shirt Deal was worth £1.06 billion.
– Ticket sales and concession
The popularity of football is increasing and ticket sales have remained the main method of football clubs to make money. For example, the Cowboys Stadium, opened in the year 2009, generates revenue of $369 million. It offers 200 luxury suites, 15,000 club seats and has a seating capacity of 80,000 people. On average, a ticket goes for $90. Before the fans start paying $340 per game, they must pay between $16,000 and $150,000 for their personal seat license.
– Increasing corporate sponsors
As we have stated above, major companies from all parts of the world use football clubs to expose their brands to football fans. Therefore, these companies are ready to spend a lot of money so that the fans can associate their brand with the winning teams. Apart from the clubs, corporate organizations sponsor football competitions too. For example, Barclays sponsors the English Premier League and SKY Bet sponsors the other Football Leagues. Budweiser has been sponsoring the FA Cup.
Football sponsorship is a key source of revenue. Bayern Munich, German’s club, gets around 55 percent of its revenue from commercial activities. The Paris St Germain (PSG) holds the record for getting the largest amount of money ever through sponsorship. The sponsorship involves selling the rights of stadium naming, kit sponsorship, and shirt sponsorship.
So, how is the future of football business?
Football betting is another growing trend. Traditionally, gamblers would have their personal bookmakers who placed their bets on popular sports like football and horse racing. Much has changed. With the growth of technology, people can now place their bets through their phones or desktop computers. Online betting might be one of the future revenue streams in the football world.