1.0 Introduction
In this age, the impact of globalization is inevitable. It includes the “Money Effect” on any program, entertainment, or even sports. Football or soccer, a sport which is played by 22 players on a field, is the most popular sport in the world with a number of 3.2 billion spectators recorded. Meanwhile for the word business, it is defined as “buying and selling as a way of earning money” from Oxford Student’s Dictionary of English. In the term of the phrase ‘business in football’, it means the “Money Effect on football” on how it occurs and what impacts does it provide. The aim of this report is to proof whether the business in this sport is sustainable or not for a long period.
2.0 How to make profit from football
2.1 From the view of owners
Before going in depth in this subtopic, generally knows that business in football differs to every person. It may differ from several aspects such as the aim, intention, and expectations about this business. As the thing goes, business in football can make a difference for three different groups of people.
The first group is the owners of the football club. Jon Mainwaring (2010) once quoted a saying from Dan Jones which he said, “Owning a football club is a statement that you’re at a certain level as a businessman.” This is because that businessmen that own football clubs are making huge profits and seeking others perspectives as well. For example, a businessman named Roman Abramovich became famous throughout the world just after he bought the Chelsea Football Club in London. From his fame, he could also get access to other things. The first thing is the box seats. “As a director, he can get contacts from potential business clients,” says Jon Mainwaring (2010). Next, global growth. Jon Mainwaring (2010) also stated that football is the fastest growing sport globally and it is approved through actions from businessmen such as the Glazer family who bought the Manchester United Football Club even owning an american football club (NFL) in United States of America. Next, businessmen or football club owners can make the football clubs as their assets. However, in this case, same goes to other type of business, it comes with a high risk. They can lose a huge amount of money if the club could not maintain their performance to avoid being relegated. On the other hand, they could also make a lot of money if their club get promoted. Jon Mainwaring (2010) also quoted a saying from Simon Wilson, “A businessman could derive personal and potentially commercial benefits from an association with a football club.”
2.2 From the view of players
The second group that would look to business in football in another way is the players itself. To sustain as a football player for a long time, they need to maintain their performance. This is just to ensure that the club would not sell them and lower their salary. In some unique cases, a player like Cristiano Ronaldo and Lionel Messi could earn more than £16.8 million after tax annually. This enormous amount of money for a particular person can only be explained through the economic concept of supply and demand as what the KnowledgeBank (2018) said. “In this case, supply is the number of players talented enough to play in the Premier League. Demand is the number of teams who want to buy the players,” KnowledgeBank (2018). Back to basics, the players need to maintain their performance in order to get high salary for a long period.
2.3 From the view of fans
The last group that would look to business in football in another different perspective is the football fans. Clearly, they would not make profits from shirt-sellings or weekly wages. In this case, they just want to get a worthy fun and joy for the tickets they paid. Chris Blackhurst (2018), a football fan believes that if the club owners only want to sell players without replacing them and make the ticket prices higher, then they will be a protest from the fans. A survey was conducted to prove a point where football fans expect from business in football. It shows that most respondents who know something about football just want a better game without any prejudices. Some of them also believe that the essence of football could be lost due to the effect of the business.
Chart 1: Do you agree that the essence of football can be lost due to business?
Source: Survey 2018 ‘Business in football’
In a nutshell, business in football makes profits especially the owners and players. However, as huge as the profit will happen, that huge also the risk will be there. That is the norm of business.
3.0 Risks of business in football
Same as other business, business in football also have its risks and costs before making profits. In term of business, there are several types of risks. Strategic risk, compliance risk, financial risk, operational risk, reputational risk and other risks. In football, the businessmen and club owners are dealing with living things which are humans. Therefore, there are many unexpected circumstances that might happen. General knows that football is a business that includes investment such as players’ wages and stadiums. It also includes return from ticket prices, sponsorships and championship bonuses. Professor Stefan Szymanski (2014) did a research about the risk and costs of business in football and it turned out he proving the quote, ‘you get what you give’. This is due to the fact that when a certain club spends more money on player wages, the club’s position in the league would be at the top.
Graph 2: Premier League and Championship Teams 2003-2012 Performance and Wage Expenditure
Source: Szymanski Stefan, 2014, ‘Stefan Szymanski on the business of football’ in Open Learn accessed 1 October 2018, from
<http://www.open.edu/openlearn/money-management/management/business-studies/stefan-szymanski-on-the-business-football>
However, he also said that this relationship is not perfect (2014). Two years ago, a club in England called Leicester City Football Club became the champion despite spending not as much as other clubs did. Because of that, the term of good and bad luck really playing their role in this business.
Furthermore, in this era, a lot of people agreed that business is more important that football. This occurs because money is undeniably essential in this age and it can be obtained from any method including football. Regarding the topic, a survey was conducted and the result is as in Chart 3.
Chart 3: In this era, which is more important, business or football?
Source: Survey 2018 ‘Business in football’
4.0 Impacts and outcomes
4.1 Business in football as a double-edged sword
Talking in terms of business, there is no exception for business in football. It tolerates with revenue and expenses. Meanwhile in terms of football, the main revenue of a football club comes from the ticket sales and sponsorships. As for the ticket sales, the club are dealing with fans which are humans. Therefore, it makes it harder to make high profit because the clubs have to maintain their performance so that the fans will stay. Professor Stefan Szymanski (2014) also stated that a survey was conducted by Borland and Macdonald which shows that most fans are loyal to their clubs when the clubs win and perform well in the league. “Teams that are relegated lose large number of fans. That is why revenue is so closely related to league position,” says Professor Stefan Szymanski (2014). Therefore, in order for a football club to gain more revenues, they must spend a lot in buying quality players and paying them with high wages. As for the players, they must keep improving their performance in order to stay in the market. Meanwhile for the fans, they expect a good game and results for every tickets they buy. Undoubtedly, business in football is a really double-edged sword for every groups associated.
4.2 The best outcome
A survey was also conducted in determining whether football can bring something good for humans. General knows that it is a global-known sport and it is essential if it can unite humans.
Chart 4: Do you agree that football can unite people from all walks of life?
Source: Survey 2018 ‘Business in football’
As the survey goes, Chart 4 shows majority of the respondents agree that football can unite people from all walks of life. Stephen Morrow (2018), a specialist in sports finance also agrees that football clubs are now international brands. Therefore, they must show good example to people as they will be observed worldwide. In addition, towards a better world through football, Rwanda, the 19th poorest country in the world, made a decision by sponsoring Arsenal Football Club since the start of the new season, just to promote the country worldwide. The sponsor is on a three-year contract with total cost of $39 million. (Filip Reyntjens 2018) This just stands as another proof that football and business is inevitably a platform for making the world better place.
5.0 Conclusion
In a nutshell, the “Money Effect” in football comes with a lot of things either good or bad, positive or negative. These effects is entirely on the power of humans, which means we are the one who decide to choose the positive over negative or vice versa. Besides, people nowadays are also aware about the “Money Effects” in football and their consequences. Based on a conducted survey, majority of the respondents believe that the business in football is profit-making and might be investing in it if they were given a chance.
Chart 5: If you were given a chance to invest in football, would you accept it?
Source: Survey 2018 ‘Business in football’
Based on the arguments given, it is approved that the business in football is actually sustainable based on what can it brings to the world and how people contribute in it.