Why the Football Industry is so rich?
Football is not just about talented players and good performances. It is more than that. Do you notice the fancy cars, the million villas, the exclusive and expensive trips? And you may wonder how can this industry be that rich. The article will explain the reasons.
Football is the most interesting and popular sport in the world. This kind of sport attracts people’s attention greatly. Every football tournament has millions of people watching, especially international football matches.
The final match between Germany and Argentina in the 2014 World Cup attracted almost 1 billion people watching. In June 2015, there were 180 million people watched UEFA Champions League Final between Barcelona with Juventus. The match between Liverpool and Manchester United in March 2015 also attracted about 700 million viewers.
To satisfy citizen’s demand, many television stations are willing to pay an extremely huge amount of money for broadcasting rights. And this is one of the main revenues for the football industry.
International Federation of Association Football (FIFA) sells its broadcasting rights of international tournaments to many famous media companies through third parties. According to Business Insider, in 2014 World Cup in Brazil, this association got about $2.4 billion from the sale of World Cup broadcasting.
Broadcast deals also bring money to many large leagues in the world. Premier League is now at the top of the list of highest value broadcast deals. The value per season that the three broadcasters Sky Sports, BT Sport and Amazon Prime agree to pay is £1,575,000,000 in the 2019-2022 period. Rank 2nd in this list is Bundesliga, an association from Germany, with £1,030,000,000 from broadcast deals with Sky Deutschland, Eurosport And ZDF.
In terms of value per game, Premier League ranks first with £8.75 million. Following it Bundesliga from Germany with £3.36 million. France’s Ligue 1 ranks 3rd in this list with £2.68 million.
Of course, every tournament has its winner who will get the cup and a huge amount of money as the prize. Besides their reputation, money is one of the primary motivations for players. There are many football competitions that offer a tremendous amount of money for the winners.
Football is no doubt a billion dollar industry. The talented and famous players are the most important people contributing to this success. Prize money is one of the ways to distribute the money generated to them. Footballers also receive money prize from potential sponsors, mainly based on their performance during the match.
The UEFA Champions League has biggest prize money. The total money prize pool is about $1.3 billion, in which $75 million belongs to the winners. FIFA World Cup spends about $400 million in total prize money; the winner in the current FIFA World Cup will receive a prize of $35 million. The extremely huge money from tournaments is what motivates all international teams.
In the final match of FA Cup in 2016, Manchester United earned the total money prize of £1.8 million when beating Crystal Palace. The Eagles received £900,000 as the runners-up.
Advertisements are a traditional but effective way to generate revenues in the football industry. As each match attracts millions of viewers, appearing some seconds during the match will help to raise consumer’ awareness towards the companies. This is the reason many brands are willing to pay thousands or even a million dollars for their advertisements to appear during the match.
According to The Guardian, ITV, a channel which broadcasts World Cup 2014 in the United Kingdom, charged an amount of $500,000 for a 30-second- advertisement during the match. In India, you need to pay nearly $60,000 for 10-second advertisement in the World Cup.
While in Brazil, Globo, the channel broadcasting World Cup, got $600 million from eight giants for their advertisements. This amount of money is enough for a business to appear in the television 1120 times. Despite this hard fact, many businesses try to afford it. Some professionals in the advertising industry say that these advertisements are worth every penny. Through the World Cup, a company not only can build its reputation but also bring its core products to consumers.
Football players can collect money from advertisement deals. Having a famous football star as your celebrity endorsement would effectively raise a brand’s awareness. Although it is not a new method, celebrity endorsement is still a highly appreciated method.
People tend to idolize famous football celebrities, thus having them in your advertisements or promotion campaigns will make consumers use your products or services.
So now you have the answer for the considerable wealth of some most talented and famed football players? Cristiano Ronaldo, Lionel Messi, Zlatan Ibrahimović, Wayne Rooney, Eden Hazard, Gareth Bale, Neymar, Yaya Touré, Sergio Agüero,…
According to Forbes, Cristiano Ronaldo, a Portuguese superstar, ranked 3rd in the list of the world’s highest-paid athletes in 2018. In just one year, from 2017 to 2018, Ronaldo earned about $108 million from endorsements, prize money, salary, bonuses.
Ronaldo was the first football player to have a permanent contract with Nike in 2016. As Forbes reported, his contract was worth about $1 billion. Since 2003, Nike has sponsored him and we can see that Ronaldo uses many products from this brand. Nike even has Cristiano Ronaldo collection in its web which Includes Nike Superfly 6 Elite FG, Nike Vapor 12 Elite FG, Nike Jr. Superfly 6 Elite FG,…
The richest football clubs
Real Madrid is the richest club. Source: thevang.tv
Real Madrid, with $851.7 million earning this year, is the richest football club in the world. As the winner of the Champions League trophy last season, Real Madrid earnings skyrocket. The club also has the most followers on social media, including Instagram, Twitter and Facebook. And it is their famous that brings them many good deals.
The long list of sponsors also contributes to the club’s earnings. The list includes Emirates, Adidas, Movistar, Microsoft, Nivea Men, Audi, Hankook, Mahou, Samsung, Coca-Cola,…The club has signed a 10-year contract with Adidas which worth up to €1.1 billion. And the deal of the sponsorship between Real Madrid and Adidas will be the most expensive deal in the football history.
One of the official sponsors of Real Madrid is Emirates. Real and Emirates made a commitment in 2013 and they signed a new 5-year contract in 2017. This settlement brings the revenue of almost 70 million euros per year for this Spanish professional club.
Adidas became the kit manufacturer of Real Madrid in 1998. Adidas contract helps this club to gain about 1 billion euros a year. Adidas also bases on the individual performances and the success in the Champion League to give incentives to the club.
On March 2019, Telefónica, a Spanish telecom company, signed a sponsorship contract with Real Madrid with the aim to maximize their position not only in Spain but also in the world. The contract is worth €15 million and it will last for two years.
Football is one of the most profitable industries in the world. Talented players, professional clubs and football associations are generating their money from many activities, including broadcasting rights and exclusive advertising deals. These are the reasons for the great wealth of this sector.