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How Football Clubs Source Their Revenue

Thu 22nd Jun 2017 | Money & Finance

It will come as a surprise to no one that football is big business these days. Although players’ wages – especially at the top teams – have increased remarkably, the clubs can pay those amounts thanks to an on-going increase in revenue that seems to not be stopping soon.

The English Premier League is home to several clubs with turnovers of £300m and upwards, and are regularly joined by Real Madrid, Barcelona, Bayern Munich and Paris Saint-Germain in Deloitte’s Football Money League that looks annually at the business side of football.

But where do these vast amounts of income come from? Years ago the main chunk of money would have come from match day earnings. Although this still plays an important part in the wealth generation of the top football clubs, it has now been usurped by broadcasting money and commercial activities.

It is interesting to note that it is only in the last few years that the commercial slice of the pie has been the largest. Even with the broadcasting money from the last BT Sports and Sky Sports deal making Premier League clubs around £5bn over three years, the top clubs are getting their biggest injection of money from their commercial activities.

For example, in the 2014/15 season Manchester United (who currently top the Deloitte money league) made £197m from their commercial arm, as opposed to £108m from television and broadcasting, and ‘just’ £91m from the gate and match-day income. For smaller clubs – even in the Premier League – TV money is still the largest percentage, but this change shows how global the English game has become.

The media like to explain commercial income in the way of shirt sales but, although this does play an important part, it is areas like sponsorship that bring in a lot of money. Many of the top sides in England have attracted investment from overseas, and there are several international owners. Some of those are connected to the Middle East but another industry that has seen its visibility increase recently is the betting world.

With no regulations outlawing the use of betting logos on shirts in England, there has been an increase in clubs advertising firms from all over the world and these have not been confined just to the Premier League. The Championship also has a number of clubs sponsored in this way, such as Nottingham Forest with 888. We have not seen teams with online casino slots logos emblazoned on their shirts yet, but the gambling industry has seen the importance of being involved in such a money-making business.

 

With the likelihood of football clubs in the top leagues in the world receiving, even more money, from future broadcasting rights deals, this revenue stream will not be disappearing for a while yet. In addition, while there is money to be made from an ever-growing commercial side to football, wealthy potential owners will be very willing to continue investing in the clubs.

 

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