Football is so different from any other kind of business because fundamentally, it is not a business you don’t look at your income and expenditure in quite the same way. Football is a great emotional driver. It does drive other businesses at different football clubs. In the football business, you are dealing with people’s emotions and passions in a way that is not really a product that you can take or leave.
Income in football can be divided into three categories namely;
- Matchday
- Commercial
- Broadcasting
1. Matchday Revenues
Loyal fans are the most important people in football. Without the fans, there will be no football. Loyal fans provide a constant revenue stream through ticket sales. The ticket sales, drinks, and foods are clubs’ merchandise.
However, matchday revenues bring financial advantage to those clubs that attract bigger crowds due to their popularity, stadium capacity, and ticket prices.
2. Commercial Activities
This source of income is the most diverse that is often split into sponsorship and marketing. Football clubs usually have lucrative sponsorship and advertising contract, but in addition to that, they also sell football merchandise online or through their own store. However, do not underestimate the power of the soul t-shirt.
Sometimes, owing to the popular surnames on the back, a club can beat off the cost of the most expensive players’ transfer in a few weeks. This option mostly works for the top club by their rich opportunities, advertising, and having the widest audience.
3. Broadcasting Rights
Although sponsorship in football can bring huge sums, the level of sponsor revenues of a club directly depends on the popularity, size, and squads. The smaller the club, the smaller the role the two sources will play in the preparation of a clubs’ budget for this reason, and the first place would put the incomes from the broadcasting right sales.
In simple words, in order for a TV channel to show you a match, it must first buy this right from the football league. The rights are sold domestically and abroad. The most profitable competition is the English Premier League (EPL). The nice thing about the premier league is that the revenues from the broadcasting rights in the UK domestic market or distributed more or less evenly. In the next season, for example, the conditional newcomer to the premier league can expect about one hundred, two hundred, and ten million in revenue, about seventy five million the club will receive from the sales and the domestic market, and another thirty to twenty from foreign packages sales.
Conclusion
For a club like Watford, these revenues can cover up to eighty percent of the total budget. For the larger clubs, this percentage will be more modest, nearly twenty to thirty percent. However, do not forget the top teams participate in the European competitions in which the broadcasting revenues are extremely decent.
Real Madrid, for example, earned eighty million pounds only by winning the champions league. Clubs are also looking to create income from other commercial activities such as stadiums, sponsorship, retail outlets, and hotels.
