The economics of football: How clubs deal with financial challenges
Financing professional football is quite complex and operates differently than in amateur competitions, which often rely on membership fees and public funding. In the Czech Republic, for example, it is largely subsidized by the FAČR (Football Association of the Czech Republic). In contrast, professional football clubs predominantly rely on private funding. They do have income from ticket sales, but that alone wouldn't cover all their expenses. Therefore, they must seek other sources, of which there are many, and we will now take a closer look at them.
Advertising comes in many forms in football
Football clubs' finances are mainly secured through the sale of advertising rights, sponsorships, and other commercial activities, including merchandising. We must not forget the support from betting companies, which alone reaches billion amounts in the Czech Republic. A relatively high share also comes from so-called transfer fees for selling players or rewards for participating in international competitions.
Broadcasting rights
Broadcasting rights for individual matches in domestic or European leagues are usually purchased by commercial companies, which offer higher sums than public broadcasters. And often there is a situation where teams that have sold rights to different television networks play against each other. So it depends on who is the home team on the field.
According to statistics, the most popular British Premier League is followed by Spanish La Liga, German Bundesliga, Italian Serie A, and French Ligue 1. These five competitions simply have a performance edge and have thus gained a privileged position with significantly higher revenues than other European leagues , including the Czech league. Even here, broadcasting each season costs more than 100 million crowns.
Sponsors not only from the sports sector
In football, it is possible to sponsor individual clubs or sporting events, but also entire competitions. And this applies to companies from the sports industry as well as all others. Typically, of course, footballers are dressed by manufacturers of sportswear, but for example, brands of food, beverages, etc. can also present themselves in stadiums or through catering., for which it is just another way of promotion.
The main word belongs to the general sponsor, but the vast majority of football clubs also offer companies other forms of partnership. It is a great prestige for clothing brands to be able to dress the players. Sometimes they collaborate in the form of barter, that is, by producing jerseys, boots, or accessories in exchange for promotion. However, for the mentioned five most popular competitions, they still pay for this opportunity.
Other commercial activities
One of the ways football clubs make money is through merchandising, that is, selling jerseys and other promotional items. And generally, the bigger the club, the higher the earnings these activities provide. The same category also includes the sale of licenses or, for example, the opportunity for stadium tours and excursions to the club museum.
What about buying and selling players?
When we look at football transfers in 2024, we see amounts in the tens of millions of euros for the most famous names. However, it is important to realize that the fees for their purchase are similarly high. So only the difference between income and expenses is counted as profit. The amounts representing the salaries and transfers of the best players can indeed be astronomical. Only a handful of elite clubs can afford them. Others try to focus on developing their own talents, which they later sell.
