While football is a sport made for other peoples entertainment and for players enjoyment, it is ultimately a business where there is a lot of money involved.
No matter where a club is on a ladder, the owners must balance the books to keep everything running smoothly and stop the club from going under.
In recent years, in particular, with no fans being allowed into the stadium and many competitions being abandoned, it has taken its toll on a number of clubs. Some of which have unfortunately gone under.
In today’s post, I am going to go over how exactly football clubs make their money.
I will be going through the list of income sources and explaining how they work and why they’re in place.
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Where Exactly Does The Money Come From?
As I mentioned in the previous section, there is just so much money in the game. However, where exactly is it coming from?
Clubs at the top are making millions of pounds in revenue per year. Some of these are even making close to a billion.
They don’t rely on one way of making money, as it’s not sustainable. Instead, they implement and put in place different sources of income to ensure longevity for the football club.
Now let’s have a look at some of the ways football clubs make their money.
Long Term Sources Of Income For Football Clubs
For a football club, it’s not always about making a quick buck, but it is by using long term strategy’s that will help the club grow for years to come.
Here are how some football clubs go about making money over longer periods of time:
Investing In Footballers
Next up we have to buy footballers from other clubs.
Now, this is an important aspect of football, as it can allow clubs to benefit in a way where they can receive money in either the short term or long term.
Whenever a club signs a player to a contract, it is done with a reason behind it.
People will look at the deals made, especially nowadays, and think about why they give them so much money, especially with the younger players.
However, the reason for it is because its an investment for the club
Whether that be from that player helping the team to win trophies or games or has an asset to sell on later on for a profit.
To give you an example, if a club signed a footballer for £100 million. Not only are they are doing it because they believe he is worth the money, but also for two reasons:
- They believe the player has the potential to rise in price to a point where they can sell him for millions more.
- They believe that the player can help bring more success to the club, resulting in more revenue.
For decade’s clubs, especially in the top divisions, focus money on their academies.
Both of which work in tune to unearth young talents and then turning them into players, who will then sell for a hefty price tag.
Now while the dream for the kids in a football academy is to work your way through the ranks and hopefully get opportunities in the first team, not everyone makes it.
Some footballers are just not good enough, while others have great talent, but there is just no space in their first team for them.
It isn’t with every academy graduate that players are sold typically to lower divisions for a price tag.
Now, if a team values a player but feels they aren’t ready for first-time football, they will send them on loan so that they can get experience.
As long as they perform well, they will gain value, so the football club has the option to sell them too.
The money clubs make from players is a lot more than they used to be. Before teams would pay a couple of quid now, now it is uncommon for a transfer at the top level to not include 6 figures.
Because of this, scouting is still very important to football clubs and can help them make money.
Through the scouting system, clubs have the opportunity to find players who have slipped through the cracks and haven’t been picked up.
If scouts find a hidden gem, they can be signed by the club as an investment, as I spoke about in the first section.
Here you can check out my full guide on football scouts where I cover how to become one and how much you can get for having this role.
Short Term Sources Of Income For Football Clubs
Finding footballers and building them into assets that are worth a lot of money are long term ways football clubs make money.
There are, though, ways clubs go about making money in the short term, which is easier for the established clubs that are higher up the pyramid.
So in this section, I will talk about a few of these sources:
TV Deals are a vital part of clubs income, as with these deals, they can get millions for having their games shown on the screens for viewers to watch.
Now with what happened to the 2020/21 season, football on the TV has been vitally important for a few reasons.
With people no longer able to visit stadiums, clubs aren’t able to make as much money from matchdays. This includes ticketing, sponsorships, catering services. There is more focus on TV money.
The premier league, for example as some big offers, when it comes to rights to show the games, with countries over in China and the USA putting pen to paper to sign deals within the hundreds of millions.
There are more than 1 billion pounds spent on rights in the UK, which is shared between companies like Sky, BT, and now entering the fray recently Amazon Prime.
If you have watched any football match, whether that be on TV or at the stadium, you will notice all the sponsorships clubs are with.
You will see on the ground the brand’s clubs work with, and on the shirts of the player, you will see a company that has paid millions to be featured on.
Of course, the higher up you are and the more fans and people watching you have, the more companies are willing to pay.
For example, Man City have been associated with the airline Etihad Airways for a number of years. It is featured on the shirt, and the stadium itself is named the Etihad Stadium.
That is because they agreed with a deal of £67.5 million a year. So as you can see, sponsorships are another way football clubs bring in income.
A really popular way to make money nowadays is through selling merchandise. It has become almost normal to build a following on social media/YouTube and then introduce to them some merchandise to rep the brand.
The same goes for football, and it has been proven to be an efficient way to earn money, not just to fans of the same country but all over the world.
Clubs will sell all types of products to their fans, from shirts to scarves to backpacks, essentially anything that can be worn with the club’s logo on it.