Commercialisation of Football

Football has exponentially progressed to be the most popular sport in the world, as well as the richest one, but the same question has been asked by many, with this remarkable financial and popularity growth. Has this financial increase become a good thing or a bad thing? Nowadays people within the sport, mention how a club has sold their soul after the announcement of another peculiar sponsorship deal but in the near future, if football continues down the slippery slope it’s currently on, clubs might not even be able to sell out. Running a football club which is essentially a business now, which is the unfortunate truth but somewhat reasonable decision to why more clubs will opt for financial security over chasing a dream. Clubs operate in manageable debt, even the giants such as Inter Milan and AC Milan (Potts, M. (2017) UEFA reveal which teams have the highest debt in Europe: Four English clubs included). They spend what they have at their disposal to attempt to improve while looking for more revenue streams and that’s where the controversial and exciting sponsorships come into play.

Business tycoons are running football clubs as though they are a business. Because they are and there’s nothing wrong with that. Since the appointment of The Glazer family in 2005, Manchester United’s value has increased from under a billion pounds to a colossal £2. 92bn (Saha, R. (2018) Manchester United are the most valuable European club), this is because they’re treating it like a business and looking to maximise their revenues just like Bill Gates would look to do at Microsoft. The FA sold off to rights to the prestigious FA Cup so it was known as the Emirates FA Cup. The Premier League itself used to have a sponsor before it opted to rebrand as the EPL. While these sponsorships may be viewed as clubs and football associations selling out, is it not better for Manchester United to have an official noodle sponsor (Bell, A. (2014) United partner up with Japanese noodle firm), as opposed to being left behind or potentially even worse? One key factor in the commercialisation of football is ticketing and more specifically pricing of these tickets; an example of how much these tickets have rose is the price of a Manchester United ticket has risen 700% since 1990 (Boyce, L. (2011) Inflation-busting football matchday ticket prices soar by up to 1,000% in just two decades) with the club continuously selling out their 75,000 all seater stadium every week it shows football is an inelastic good and football fans loyalties towards their football club is being exploited by greedy owners.

Furthermore, in an effort to further increase match day revenue more and more clubs are beginning to build expansions to their existing grounds or even moving to a completely new bigger ground, recent examples include Liverpool expanding their existing Main Stand by an additional 8,500 seats this consequently earned Liverpool an extra £12m last year, Manchester United have been planning to build on the South Stand to take the capacity to 88,000 (Keegan, M. (2017) Manchester United looking to make Old Trafford second biggest stadium in Europe with 88,000 capacity) which with existing season ticket prices would bring in an extra £11. 4m. This extra revenue gradually builds up and has allowed Liverpool to spend more money on players such as Allison and Keita last summer, whose added quality has turned Liverpool into genuine title contenders once more. The effects on football clubs are nothing more than positive, seen more of an luxury to most people, football tickets are still a necessity for the fans and with many BPL season tickets costing in excess of £1000, clubs are allowed to spend more money in the transfer window, Chelsea’s most expensive season ticket this season is a mammoth £1250 but with 3 Premier League successes, 3 FA Cups and a Champions League title to celebrate this decade alone fans are still willing to spend their money on the club even with continuous increases.

Football clubs are smart, look at the steady decline of Manchester United in the past 5 seasons, the clubs not raised season ticket prices because they’re not performing on the pitch, in a hypothetical world if Manchester United were to win a 21st league title in May the club would be more likely to raise season ticket prices knowing full well they’ll sell out. In recent years policies have been implemented to help prevent exploitation of fans who see themselves more as customers than fans; '20s plenty' and 'Kids for a quid' help those who travel up and down the country are getting fair ticket prices. An increasing amount of football fans acknowledge that football is unaffordable for many and this is especially true for away fans who must deal with excessive food, drink and travel costs as well as the purchase of their match ticket. Another factor is merchandising, 25 years ago most clubs would release a new a home and away shirt which would last for 2 seasons, fast forward to 2018/19 most football clubs release 3 separate football kits every single season! With the rising price in these kits football clubs are making colossal commercial revenue compared to what they previously were making, an example of this is the new Manchester United kit costing £183!, which is no surprise why The Glazers have forecasted revenue between £615m and £630m for this season. Selling football shirts is the biggest form of merchandising as if a big transfer happens, they can sell the clubs shirt with the players name and number on the back for a lot of money as they know people will buy it so it increases the amount of revenue a club can gain.

For example, Cristiano Ronaldo helped Juventus as they sold 520,000 Ronaldo shirts within the first 24 hours alone of him being at the club with the cost of one shirt approximately €80 that translates to €41. 6m in shirt sales! The arrival of Cristiano Ronaldo, arguably the world’s most marketable player will allow Juventus to get to that next level where they want to be which is continental triumph. Merchandising also allows clubs another way in which clubs might aim to capitalize on, or even expand their fan-bases in different regions worldwide, is the signing of players from these regions. That would give fans a more easily visible connection between them and the club. An obvious example of this is Manchester United’s signing of Park Ji-Sung, who during 2006 was arguably Asia’s most successful and high-profile footballer on the European stage. Park’s signing ignited the spark to allow United to expand their fan-base in Korea exponentially, consequently increasing their already massive revenue streams. When United signed Shinji Kagawa from Borussia Dortmund in 2012, it was claimed that one of the reasons for doing so (in addition to the obvious quality he displayed for Jurgen Klopp’s men in the seasons before) was commercial. Kagawa’s signature would help United both on and off the pitch, as shirt sales in Japan would skyrocket.

The reason all football clubs sell merchandise is simply because it maximises potential retail space and it allows them to engage with their fan base, most clubs official shops will sell anything plastered with the club logo over it nowadays, mugs, bedding even stationary with your favourite football club on, it stimulates the fans to spend more of their money on the club. The reason we buy all this merchandise is because consumer media presents the feeling that you’re not a proper passionate fan, unless you have the most up-to-date merchandise. This coordination between sports franchises marketers isn’t unintentional. It’s entirely grounded in the idea that more merchandise means more revenue. In addition, another factor to consider is broadcasting, TV has completely changed football particularly in the last 25 years.

The latest TV rights deal which runs from the 15/16 to 18/19 Premier League season is worth £5. 1bn, an increase of 70% compared to the last deal, which means each time a team is shown on TV they pocket approximately £10m which 95% goes directly to the club itself, which helps a clubs broadcasting revenue tremendously, Manchester United pocketed £194. 1m for 16/17 season which consequently allowed the club to spend £146m that following summer on 3 new players which had a positive effect on the club as they finished 2nd the following season! The rights also expands the leagues audience catastrophically, the league is currently shown in 212 territories worldwide to 643m homes which gives the league an incredible TV potential 4. 7bn viewers which is just over 65% of the world’s population! This sparks increased interest from foreign fans, Manchester United the Premier Leagues most shown club which have an estimated 659m fans worldwide, the increased amount of fans will buy merchandise which has a positive impact on the clubs commercial side! They’ll also help the match day revenue of the club as the high interest of fans from foreign countries such as China and the US result in annual pre season tours, clubs are looking to both expand and consolidate their fan-bases in these parts of the world, and such tours allow supporters to forge stronger bonds with the clubs that they support. Doing so allows clubs to maximize their revenue streams from these markets, which is an extremely important aspect of modern-day football, especially in light of UEFA’s current Financial Fair Play (FFP) rules.