Commercialisation. A term used at some point in time in every sport across the globe. For football, the 21st century has been the era of commercialisation for the sport. But what exactly does commercialisation entail?
When a sport reaches a global audience, a material audience which will attract people in huge numbers, there is always a business mind somewhere looking to benefit from it. Football is now a product, which is sold world over. Our different leagues are different types of products that football has to offer. Every country is looking to better it’s league in one way or another in order to improve their global reach. At the moment, the English league is considered to be the most entertaining and draws larger audiences, hence they have the ability to attract considerably larger sums of money compared to other leagues.
The sport has always been commercial, but the 21st century has just seen this taken to a whole new level. In some cases, it may even beg the question as to whether one is running a club or a business? Earlier, clubs were generating income through sponsorship and gate receipts mainly. Nowadays, they are earning through television rights, merchandising, stadium naming rights, etc. in addition to the sponsorship and gate receipts.
Commercial revenue for football clubs are on the rise and football clubs are looked at brands nowadays. The bigger the brand, the better a commercial deal one can make. For example, Manchester United’s deals with Adidas and Chevrolet were groundbreaking in terms of financial prowess, both in excess of 500 million dollars. (Read more on that here) Chelsea too have a deal with Nike for 900 million pounds over 15 years till 2032.
Brand value is essential for a club now, as we could see with Crystal Palace this season. The reason they hired Frank De Boer was so that they could play attractive football. In order to attract more fans and improve their following, they intended to change the perception of the club from a rugged, scrappy team to one which played attractive football. Although it did not work out well, one can see that clubs are highly concerned with their global appeal in order to improve their brand.
We see elaborate preseason tours too for most clubs to improve their standing in various countries. Geographical areas are now being seen as markets rather than fan bases and clubs are striving hard to improve their positions in these markets. Even the Premier league have their annual Premier League Asia trophy to further their already global reach.
The Premier League too has been of great help to all their clubs by negotiating fantastic television deals. Their current deal runs 3 years and is worth 5.14 billion pounds which equates to 1.7 billion pounds a year approximately. To compare that to La Liga, their 3 year deal is worth 2.65 billion euros. Last year, bottom placed Sunderland earned 99.9 million pounds and champions Chelsea earned 153.2 million pounds from the distribution of the Premier league television rights with all the other teams being in between. Compare that with the Spanish league where last place Granada earned 62 million euros (55 million pounds) last year, and one can see how far the brand value of the Premier League takes them. It also enumerates how much money there is in the sport at the moment.
The global appeal of the game has attracted a lot of wealthy individuals to the game. Roman Abramovich started the trend in 2003 when he bought Chelsea and started investing money in the club. Manchester City are the prime example of the heights a club can scale if money is invested right. Sheikh Mansour bought Manchester City and he also heads the City football group. This is a group of teams across the globe that work together to create a global footballing brand. They currently own football clubs including Manchester City, New York City FC, Melbourne City FC, Girona FC, Club Atletico Torque, and Yokohama F. Marinos. Fair to say, these clubs will be financially stable for the years to come.
All of this money in the game has led to one thing, inflation. Inflation in transfer fees, wages, agents commission, etc. Agents weren’t as important earlier as they are now. Nowadays, we talk of super agents like Jorge Mendes and Mino Raiola, the footballers and managers they handle, etc. These agents aid the players in various things like transfer negotiations, contract renewals, commercials, etc.
A lot of people expected transfer prices to rise but no one expected them to rise at the rate at which they did. When Paul Pogba was bought for 89 million pounds by Manchester United, many people laughed at Jose Mourinho for splashing that kind of money on a player. One year later and that deal looks like a bargain. In the last year or so, it seems like teams are throwing money at players for the fun of it. PSG met Neymar’s release clause earlier this summer at 200 million pounds. It is almost unimaginable that only 10 years ago, Thierry Henry was sold for 16 million pounds to Barcelona.
Money is a prerequisite for success in football. Without it, one could have one, maybe two successful years like Leicester and Leipzig, but money talks nowadays more than ever. One needs money to build a sustainable club for the future. However, sometimes it does not workout if not spent properly as we saw in the case of AS Monaco in the early part of the decade, and Malaga (Read more on Malaga here). Although some fans may not like the influence money has on the game, the game needs to keep up with the times and this is the way forward.
Featured Image via 123rf.
Both league revenues and revenue trends charts via CNN.
PL Asia trophy Image via Liverpool.
Mino Raiola and Jorge Mendes Image via Sport1.
Paul Pogba Image via Cityam.