Do you wonder how soccer clubs spend millions of dollars on signing superstars? How do they build such massive and advanced stadiums? It begs the question: how do these soccer clubs earn?
This inflow of money is justified because soccer is the most viewed sport in the world. Annually, it bags around 3.5 billion eyes, leaving cricket behind by a margin of almost 1 billion viewers.
Still, it doesn’t explain how soccer clubs have gone from rags to riches. It only tells that this sport has a lot of money involved, but the ways money comes from still may not be clear to a novice soccer fan. If you’re interested in knowing the income sources a soccer club has then read on:
Broadcasting Rights
Broadcasting rights are the crown jewel for soccer leagues, as in most cases, it’s the highest source of income for them. Let’s have a look at how the broadcasting rights work:
Soccer leagues, instead of clubs have the authority to sell the broadcasting rights to the highest bidders. Before bidding, there are a few parameters that determine how much a league can bag in broadcasting rights.
As media companies attain broadcasting rights, they further distribute them among small companies, such as streaming platforms or mobile apps. For instance, ESPN has the broadcasting rights of La Liga till the 2028-29 season. However, with a sterling internet connection, such as Xfinity Internet, you can live stream all the matches on Fubo TV too.
Moving forward, the broadcasting amount is then transferred to the soccer clubs. It can be divided equally among each team playing in the league or the division model can be different. For example, in the Premier League, 50% of the UK’s broadcasting rights are equally divided among the teams. However, the other 50% is divided into two parts: 25% is based on the team’s final standing in the league and the other 25% is the fee each team gets as its match is broadcasted.
Such a broadcasting model is a win-win situation for broadcasters and soccer leagues alike. Soccer leagues generate more revenues and attract more eyes. On the other hand, broadcasters make millions in profits when so many people tune in to watch their favorite teams playing.
Transfer Market
In 1973, Barcelona paid around $2m to sign Ajax’s star; Johan Cruyff. It was the first million-dollar deal in the league football’s history. Fast forward to 2017, Barcelona sold Neymar to PSG in a deal worth $263m.
A question arises here; how have players’ transfer fees sky-rocketed in just a few decades?
Well, it’s because, in the past, such money wasn’t involved in the game. With time, owing to a digitally connected world, players became superstars overnight. Besides hiking their transfer fee, more and more clubs wanted them on their side.
With multiple clubs running after a player, the parent clubs have the leverage to ask for a price they want. Consequently, it automatically increases the transfer fee. Not only that but signing a fan’s favorite increases the club’s merchandising as well which earns them a handsome amount.
Matchday Revenue
Matchday revenue includes match tickets and income generated from food, drinks, or merchandise sales at the stadium. Unlike most income sources of a soccer club, matchday revenues are largely dependent on the club’s performance on the pitch. Let’s see how:
If a club performs as per the expectations, it’s bound to get support on the sidelines. Fans will flock in to fill the stadium. Moreover, if a club does well in major competitions, the support it receives from the fans may only increase.
Besides performance, there’s another way that may pull the fans into the stadium. As discussed above, soccer fans love to see superstars donning their team’s jerseys. This way, soccer clubs can fill the empty seats and generate some noise as well as revenue in home games.
Sponsorships and Prize Money
Major brands like Nike, Adidas, Puma, Emirates, and more enter into lucrative deals with soccer clubs. Usually on kits, such brands buy a small space to display their logo. In some cases, they may also buy space inside the stadium to display the ads.
With sponsorships like these, soccer clubs earn a hefty amount. As for brands, they want to advertise their business and soccer seems the perfect fit for it. As we’ve mentioned, soccer is the most-viewed sport in the world, so brands splash cash in sponsorships to lure the best soccer clubs in the world.
Besides sponsorships, soccer clubs also earn a fair share from the tournament’s prize pool. Besides league, a team may participate in European cups or domestic cups as well. In most cases, there’s a fixed share that each team gets. However, if a club manages to bag the trophy, the prize money increases.
In short, the beautiful game of soccer has completely changed over the years. It has become more dynamic, competitive, and entertaining. And the money involved has played a huge part in that. Besides this, such money has allowed soccer clubs to hunt down talent at the grassroots level through their scouting programs.
