Football is one of the most popular sports in the world, and it is quite common to see a news piece when a certain club signs a new player for millions of dollars. But how is that even possible? If you are wondering how football clubs make money, then you’ve come to the right place.
Today, we are collaborating with Mark Dash, founder of DashTickets, to showcase multiple ways clubs around the world have learned to increase their revenue.
While we generally view football clubs as teams, they are actually huge business machines that generate revenue in many different ways. This is also part of the reason some of these clubs are bought by extremely wealthy owners — certain clubs can be seen as a decent investment, although, to be fair, they only pay off in the extremely long run.
Marki Dash of DashTickets shows some of the most common ways clubs can make money to sustain themselves and earn extra on top of it.
Let’s start with the most obvious way to earn money. Every time a fan buys a ticket to a match with a certain club, the club gets a huge percentage of it. Not only that, the team will also earn extra on additional services like parking, food, and merchandise. The more popular a club is, the easier it is to earn money this way. This ties the sport success of a team directly to its financial success, since the more a team wins, the more popular it becomes.
However, while matchday revenue might be one of the most important sources of income, it doesn’t come easy. If a club owns a stadium, the management will have to pay for its maintenance, which can be rather costly. If a club doesn’t own a stadium, they will have to pay rent, which is also not exactly cheap. Another thing to worry about is that not every match will bring many fans to the stadium, and even things like bad weather can significantly affect the revenue.
Clubs generally earn quite well from selling their merchandise, which is a great way to generate extra revenue from fans abroad — after all, clubs like Real Madrid or Juventus have fans all across the world, not just Spain and Italy respectively.
The merchandise sales offer quite a decent income, especially for popular teams. However, this source of revenue can be heavily influenced by economic shifts. Costly merchandise is one of the first things people will cut from their expenses as soon as a crisis approaches.
It is no secret that ads and sponsorships provide a huge share of income for most football teams, which is why today we see several sponsors on players’ shirts — from airlines and sportswear brands to betting websites. Needless to say, the more well-known a club is, the more potential sponsorships it can get, so this option is as lucrative as the club is successful.
The clubs also earn from broadcasting their games on TV and online, which is one of the most crucial sources of income for most professional teams. As a matter of fact, these types of agreements between football teams and broadcasters are some of the most well-established and solid agreements the clubs can have, ensuring a stable income that requires basically no involvement from the team’s management.
Clubs that can sell a highly valuable player can earn a lot from transfer fees, especially with numbers reaching hundreds of millions of dollars. This is one of the reasons clubs are focused on developing their youth — sometime in the future certain players can be worth incredible amounts of money.
However, as one can imagine, this strategy is a bit of a gamble and cannot be considered a stable source of income. Another issue is that selling valuable players doesn’t go unnoticed — the team’s performance may suffer, and the fans can be unhappy with the transfer as well.
Certain tournaments and championships offer prize money for securing high positions, which serves as an extra incentive for teams to perform well. While the prize money can be solid — up to tens of millions of dollars — even the top teams cannot reliably expect to earn it every season. This source of income is only really significant for the best of the best.
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