Tuesday, March 19, 2024
logo economy journal
< view full issue: The football business
José Luis del Olmo Arriaga

​Football big business

Director of the Marketing and Commercial Management degree at the Abat Oliba University

Although some sports have had a great boost in recent years in some of the European markets, and although new business models have appeared, such as eSports, as a business, football is king.


Futbol


This type of sport has audiences counted in millions, totally dedicated fans who see their soccer teams as authentic love affairs, which makes them feel faithful to their colours and connect emotionally with them. Likewise, companies are increasingly willing to pay to position themselves by taking advantage of this sport upsurge.


According to the consultancy Deloitte, the football industry drives a market valued at 28.4 thousand million Euros.


The English league and the main European football teams have considerably to do with this assessment. In fact, the English Premier League is the most valuable of all European leagues. Its value is 72% higher than that of the next most valuable league, the German one (and that considering that the Bundesliga is the league with the best results in public attendance at football matches). The five major European leagues, considered the 'great five', ended the last season analyzed (2017/18) with revenues of 15.6 thousand million Euros, 6% more than in the previous year.


Still, according to Deloitte this sport currently turns over around 500,000 million dollars annually. This shows that teams have managed to find new paths to success and revenue generation, also helped by UEFA's sustained efforts to increase profitability and sustainability through Financial Fair Play and club licensing, as Dan Jones, member and head of Sports Business at Deloitte, points out.


There are many studies that have detailed the impact of football campaigns, the most famous agents and the most successful teams. For example, one study revealed that Real Madrid was the most valuable team in the world when it comes to football. Their brand was worth $1,646 million. It was followed by Manchester United, at 1,472 million and Barcelona, at 1,399 million, as the most sought-after teams.


In all the economic valuations of the football teams and the different national and international championships, not only are the revenues from the sale of tickets significant, but also by the value of their brand in marketing, from the sale of agents and by the impact that their derivative products such as merchandising have.


In fact, the German Bundesliga surpasses the Spanish Football League in valuation (it is the second most valuable league, ahead of the Spanish one) due to better sales of match broadcasting rights. Even in the most valuable league in Europe, as is the English one, match note sales are an insignificant part of income and brand value. They constitute only 14% of the season's income: in the German league, tickets sales accounts for 17% and the Spanish league, 12%.


The most significant percentage of income is in sponsorships/publicity and in the match television broadcasting rights, which demonstrates the power of attraction of the sports brand.


In the Spanish League, the football match broadcasting rights account for 52%, and sponsorships, publicity and other income 31% of total revenues.


This business has transcended the boundaries of Europe and South America to extend, apart from Africa, Asia and the rest of the Americas, to the United States, China, Japan, South Korea and Australia, five emerging powers in this sport. Three of them (Australia, South Korea and Japan) will participate in the World Cup to be held in Russia. However, the United States, after its elimination, put Fox Sports at risk due to the 400 million dollars it had paid for television rights, given the predictable low audience interest in this country after its elimination. China -which now buys players at exorbitant prices-, is counting on a State policy: host the 2026 World Cup.


Although football club brands are attractive, even more so are the players. The leading figures in this sport -such as Messi, Ronaldo or Neymar Jr., among others-, receive a substantial part of the income through image rights and other channels, such as publicity for large commercial brands. The income of these three athletes was almost 180 million Euros in 2016. Currently, they probably exceed 200 million Euros.


Apart from that, football has also become the “El Dorado” of bookmakers, who have found the perfect vehicle in this sport to reach their target, while reinforcing their brand in terms of credibility by linking their image to the football clubs and the main international competitions, particularly the European ones.


As the financial magazine 'Expansion' points out, the betting industry has become the fifth-largest sponsor of the English competition, behind sportswear brands, financial services companies, airlines and car manufacturers. Sponsorship revenue generated in a single year exceeded 500 million Euros, according to Business Insider magazine. In the UK alone, the investment was more than 100 million Euros, and almost half went to the Premier. However, beyond the match kits, the sponsorship of these online bookmakers and casinos has also been extended to football teams without the need to wear their logo on their shirts, only in some areas of the stadium, website, official app and other places for promotional purposes.


In Spain, where football is followed with enormous passion, there was a significant increase in football betting agencies in recent years.


In the 18/19 season, the sponsorship by this type of organisation is present in nineteen of the twenty clubs of the Santander League. The only team that went against this norm was the Real Sociedad which, although it has never had sponsorship of this type on its kit, did have it present at the club level: that of Kirolbet, a Basque betting agency that currently sponsors other sports clubs.


Likewise, in betting shops where you can make all kinds of bets (as long as you are of age), football bets stand out, since the passionate support in Spain as regards this sport is different from other countries, and so many fans have no qualms about betting on their team. For example, Bwin and 888sport are Internet gambling and gambling operators that are well known in this sector.


The upsurge of these businesses linked to football makes no sense without substantial investments in marketing, which almost tripled between 2013 and 2018, where they went from 112 to 329 million Euros, an increase 

Previous
Next

THE ECONOMY JOURNAL

Ronda Universitat 12, 7ª Planta -08007 Barcelona
Tlf (34) 93 301 05 12
Inscrita en el Registro Mercantil de Barcelona al tomo 39.480,
folio 12, hoja B347324, Inscripcion 1

THE ECONOMY JOURNAL ALL RIGHTS RESERVED

THE ECONOMY JOURNAL

THE ECONOMY JOURNAL ALL RIGHTS RESERVED

Aviso legal - Política de Cookies - Política de Privacidad - Configuración de cookies

CLABE