How soccer clubs generate revenue
By Simon Bordoli
Soccer is the most popular sport in the world. The Champions League final—the biggest game in European soccer—garners twice as much viewership as the super bowl. The combined revenues of the 5 biggest domestic leagues in Europe is larger than the NFL’s. Since 2014, the overall value of the 20 soccer clubs in the English Premier League has increased 370%, from $3.16B to $11.7B. This begs the question: how do soccer clubs make money, and what is behind the growth?
The revenues that clubs generate can be separated into 3 main categories: matchday, broadcasting, and commercial. Matchday revenue is derived from ticket sales and the sale of food and drink at stadiums. According to Deloitte’s Money League, which examines the finances of the top 20 clubs in Europe, this was the smallest of the 3 portions, representing just 18% of revenues. The second largest stream of revenue was broadcasting revenue, which accounted for 40% of total revenues. This consists of television rights deals for competitions such as the UEFA Champions League as well as the domestic leagues in England, Spain, Germany, France, and Italy. Third and finally, commercial revenues were the largest source of revenue, constituting 42% of the total. Commercial revenue stems from the sale of jerseys and club merchandise, as well as sponsorships. For example, in 2022, English club Manchester City received $85M from their shirt sponsor Etihad Airways.
The areas that have driven revenue growth are broadcasting and commercial. New and expanding markets such as the United States have created greater demand for the television rights deals to European soccer. In fact, the latest TV deal for the Premier League is worth $8.5B in the 4 years starting from 2025. In an effort to maximize their purchase, television companies run additional ads that are plastered over in-stadium ads in real time. This further highlights the sports transition from a largely matchday-income-based business model to a model centered around the online viewership experience.
Additionally, commercial revenue has spiked because brands like Paris Saint-Germain have partnered with Jordan Brand to produce jerseys that have fashion elements to them. These jerseys are worn not just by people that support PSG, but also by people who use their kit as a fashion statement.
References:
https://en.as.com/soccer/super-bowl-vs-champions-league-final-which-is-the-most-watched-sporting-eve nt-n/
https://startuptalky.com/top-10-richest-sports-leagues/
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https://www2.deloitte.com/uk/en/pages/sports-business-group/articles/deloitte-football-money-league.htm l
https://www.statista.com/statistics/254569/manchester-city-revenue-from-kit-sponsorship/#:~:text=Value %20of%20Manchester%20City's%20jersey%20main%20sponsorship%202009%2D2022&text=The%20st atistic%20shows%20the%20revenue,its%20main%20jersey%20sponsor%20Etihad.
https://www.sportsbusinessjournal.com/SB-Blogs/Newsletter-Media/2023/06/05/epl-ratings.aspx#:~:text= Premier%20League%20draws%20second%2Dbest%20season%20yet%20on%20U.S.%20airwaves&text =Games%20across%20NBC%2C%20USA%20and,from%20510%2C000%20viewers%20last%20season .
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