Today we’re breaking down the business behind the most popular sport in the world, Football or Soccer. It’s a vast market. 3 billion people around the world watch the sport and more than €30 billion euros are spent within the football ecosystem in Europe alone each year. But aside from a huge addressable market and reasonable revenue, is it actually a good business?
Why do investors keep buying Football clubs? Is there any economic rationale behind that? Is there a link between sporting and financial success? Has middle-eastern money distorted the transfer market for good?
These are some of the questions I asked our guest, Dr Rob Wilson, who is a football finance expert and Head of the finance, accounting, and business systems department at Sheffield Hallam University. I hope you enjoy us breakdown the business of football.
Show Notes
(00:00:00) – Introduction
(00:03:16) – (First question) – Defining the European football market
(00:05:12) – How the Premier League defined itself as the world’s best league
(00:08:16) – The delegation of funds based on a team’s final position in the league
(00:11:19) – A brief introduction to the breakaway European Super League
(00:12:53) – The sale of Manchester United and how it affects the scope of the footballing world
(00:18:34) – The role emotion plays when it comes to buying and selling of football clubs
(00:20:47) – The makeup of a well run football club
(00:23:54) – The four-pillar model and exploring new revenue streams in football
(00:25:59) – The utilization of ‘access all areas’ type documentaries as a source of revenue
(00:28:40) – Breaking down the return on investment for football clubs building new stadiums
(00:33:51) – Financial regulations in football and a brief history of UEFA’s Financial Fair Play
(00:40:41) – The correlation between sporting and financial performance
(00:42:23) – The different types of football club ownership profiles
(00:44:51) – Reasons why investors choose to enter the football market
(00:48:12) – Changes to the football landscape since sovereign wealth funds have entered the market
(00:51:36) – The importance of the transfer market to football clubs
(00:53:03) – How the fans fit into the sport moving forward
(00:55:52) – Potential opportunities for TV revenue streams by entering new market places
(00:56:55) – The relationship between the clubs and the leagues
(00:58:20) – The lessons learned from researching the football industry