Football Finances: How Do They Top Clubs Build Wealth?

If you are trying to build your wealth and are looking for some true business success stories for inspiration, look no further than the time-honoured institution of English football. After all, out of the top 20 most valuable sports teams on the planet, around half are Premier League football clubs, with the likes of Manchester United, Chelsea, and Liverpool worth billions of pounds apiece.

Meanwhile, those same clubs have managed to grow their wealth several times over throughout the past twenty years as a result of shrewd investments and business deals. That’s why some of the biggest English clubs are currently sitting on massive stockpiles of cash, while other live entertainment organisations have seen their finances decimated over the past year. If you’re wondering how football clubs have been able to make so much money, read on to find out.

Source: Pixabay

1. Ticket Sales

Unsurprisingly, the biggest money-maker for the top clubs is ticket sales. The average price for a matchday ticket across the top 20 English teams was £32 during the 2018/19 season – a figure that has grown well beyond the rate of inflation over the years. Football clubs have learned that fans will pay more for the experience and have had no qualms about jacking up ticket prices accordingly. Although it might seem unscrupulous to some, it has undoubtedly been an excellent money maker.

2. Transfers

A football club’s most valuable asset is always going to be the players. Other clubs realize this, which is why they are willing to pay such eye-watering sums for the top talent. Every single year seems to witness a new record-breaking transfer, with the current world record being Neymar’s move from Barcelona to Paris Saint-Germain for £198 million in 2017. This might not even be the record for long – rumour has it that Lionel Messi has a release clause for a staggering £638 million at Barcelona.

Source: Pixabay

3. Sponsorships

EPL matches are watched by hundreds of millions of people around the world, making them incredibly valuable avenues for advertisers and sponsors. Some sponsors will pay top-dollar sponsor not just one club, but several. For example, the UK sports betting platform Bet 365, which offers live odds on all English footy fixtures, is currently the official sponsor of Leicester, Newcastle, West Bromwich, and Wolverhampton Wanderers. You can’t ask for better exposure than that.

4. Merchandising

We’ve all complained about the exorbitant costs of an official footy strip before. However, it seems that we are still content to grin and bear it, given the soaring football merchandise revenues over the past few years. Much of the sales of official merchandise tend to come from overseas markets, with China, the US, and the EU buying the bulk of English club’s merch. The sale of merch amounts to hundreds of millions of pounds a year, making it a hugely valuable revenue stream.

These are the main ways that football clubs earn their money. For the financial novices among us, these lessons should teach the value of diversification.