Football Clubs Are Not Big Business

Part 1: BIG Business

When you hear the likes of Paul Pogba going for 100 million or Neymar breaking transfer records at 200 million.
When You see all the betting sites, sponsorships and lavish lifestyles football players live. One can be forgiven to think that a football club is a viable business capable of bringing in millions of monies. However, I can forgive you for thinking that.
William McGregor, a Scottish dapper who founded English football in 1888, was probably the first person to describe Football as ‘big business. This phrase has gone on to become one of the games great clichés. In fact, McGregor was Wrong. Football is neither big business nor good business. It is arguably not even a business at all.

Looking at Footlocker which is an American sportswear and footwear retailer and one of the smallest of the 500 publicly traded companies that make up the S&P 500. In 2017 Footlocker made revenue of 7.7 billion dollars. Footlocker is not considered to be big business in comparison with the biggest company Apple Inc. whose revenue was 229.2 billion USD in 2017
But Compared to any Football Club Footlocker is a Titan outshining the worlds richest club Manchester United according to Deloitte’s Money league which reports Manchester United be having revenue of 830 million dollars (€689m).

It’s worth noting that the Money League ranks clubs based on how much they sell. When business analysts judge normal companies they usually focus on profits, or the company’s value if it were sold on the market.

However, neither of those methods works with soccer clubs. Because almost no clubs are quoted on the stock market anymore, for extremely good reasons, it is hard to work out their value. We can certainly say that not even Real or United would get anywhere near the S&P 500.

And if Deloitte ranked clubs by their profits, the results would be embarrassing. Not only do most clubs make losses and fail to pay any dividends to their shareholders, but many of the “bigger” clubs would rank near the bottom of the list.

Whichever way you measure it, no soccer club is a big business.

In the 1990s the average Premier League club had about the same turnover as a British supermarket—not a chain A good way to visualize the size of the soccer industry is to visit UEFA’s headquarters in the Swiss town of Nyon. The building has a lovely view of Lake Geneva, but it looks like the offices of a small insurance company.

Soccer is small business. This feels like a contradiction. We all know that soccer is huge. Some of the most famous people on earth are soccer players, and the most watched television program in history is generally the most recent World Cup final.

It may be that season tickets are expensive and replica shirts overpriced, but buying these things once a year represents the extravagant extreme of soccer fanaticism.

Most soccer is watched not from the seats in the stadium but on TV—sometimes at the price of a subscription, often at the price of watching a few commercials, or for the price of a couple of beers in the pub.

Compare the cost of watching a game in a pub with the cost of eating out, or watching a movie, let alone going on vacation.

Worse still, soccer generates little income from reruns of matches or transfers to DVD. And watching soccer (even on TV) is only a tiny part of the fan’s engagement with the game. There are newspaper reports to be read, Internet sites trawled, and FIFA to keep up with.

Then there is the soccer banter that passes time at the dinner table, work, or the office. All this entertainment is made possible by soccer clubs, but they cannot appropriate a penny of the value
we attach to it. Chelsea cannot charge us for talking or reading or thinking about Chelsea.

There are complaints that the players earn too much, but the whole world earns money from your success as a player: newspapers, television, companies.” In fact, the world earns more from soccer than the soccer industry itself does. Part 2:

Check the following links on Deloitte’s ranking of Football clubs finances and a few links on financial fair play.

Deloitte football money league:

Uefa financial fair play:

Highest earning football clubs:

Premier league financial fair play:

Manchester United and Real Madrid have the most finances in the world check their financial results below

Manchester United Financial Results:

Real Madrid Financial Results:

Channel sponsor Ubergeekout :

This is Football religion TV.

“Creating content that should spark the fire within all the football fans around the world to engage with each other.”

If you like this type of content check out this book, Soccernomics:

Football is Religion

The information was adapted from soccernomics.

Categories: Football Finance, Football Religion Blog

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