Beyond the Game: The Rise and Rise of Football Money

One hundred twenty years ago, in 1893, Willie Grooves, a West Bromwich Albion inside forward in the then professional English Football League, was sold with a record transfer fee of 100 Pounds Sterling (GBP) for Aston Villa. This transfer was considered controversial. The Football Association labeled the transfer process ‘unfair’ because the player was illegally poached and a huge amount of money was tendered. Nevertheless, Grooves subsequently became the first player to be transferred with ‘that amount’ of money in the history of football and helped Villa win the league championship in 1894. Villa actually ended up being fined for the incident by the Football Association.  

Fast-forward to the present day, in the summer of 2013, the 24 year old Welsh international and Totenham Hotspur winger, Gareth Bale, was transferred to the Spanish giant Real Madrid with a world record transfer fee of GBP86 million (EUR100 million). The world was stunned and it added to the critics buzz that money was ruining football and clouding the game. They argue that transfer fees and salaries for players are exaggerated. 

Revenues have risen to the point that they can make a difference in national economies. In 2012/13 the total revenue of the top 20 European football clubs reached EUR5.4 billion recording an 8pct growth from the previous year’s EUR5 billion total revenue. This total amount of revenue could well exceed EUR6 billion next year, according to a January 2014 report from Deloitte Sports Business Group. Given the backdrop of a tough economic climate, this is a particularly impressive achievement. 

ClubsRevenues from Match day (in Millions EUR)Revenues from Broadcasting (in Millions EUR)Revenues from Commercials (in Millions EUR)Total Revenues (in Millions EUR)
Real Madrid 119 188.3 211.6 518.9
FC Barcelona 117.6 188.2 176.8 482.6
Bayern Munich 87.1 107 237.1 431.2
Manchester United 127.3 118.6 177.9 423.8
Paris Saint-Germain 53.2 90.9 254.7 398.8
Total 504.2 693 1,058.1 2,255.3

A huge amount of money is everywhere in the sport. It’s on the jersey, in the stadium, on the television transmission, in the heads of the players, and in the hands of the owners. “If football is a religion, then [to many] money is god,” says, a football business commentator. Each week, millions of dollars change hands between clubs and players, fans and ticket offices, and sponsors and clubs. Professional football does indeed live up to the capitalist ideal; that if there is money to be made, someone will find a way to make it. While money is involved in almost every aspect of the game, there are a few specific areas where the influence is especially noticeable: In stadium naming and television transmission rights, sponsorships, jersey sales, players’ transfer fees and payments. 

Naming of stadiums

Historically, stadiums were named after the neighborhood in which they were constructed or after very famous people in that community or club. The most zealous fans of the clubs are usually pulled together from families living nearby.  

1 Gareth Bale Tottenham Hotspur Real Madrid GBP86m
2 Cristiano Ronaldo Manchester United Real Madrid GBP80m
3 Zlatan Ibrahmivoic Inter Milan Barcelona GBP59m
4 Kaka AC Milan Real Madrid GBP56m
5 Edinson Cavani Napoli Paris St-Germain GBP55m

As money became more and more a part of the football arena however, stadium naming rights became one avenue through which clubs could amass even greater fortunes. Arsenal has ripped GBP100 million from Emirates Airlines for the naming of their stadium ‘Emirates’ and later an additional 150 million pounds for stadium naming rights until 2028 and an official match and training shirt sponsorship for 5 years. Arsenal was thrilled with the deal, claiming that “the combined value of both elements of the sponsorship is by far the biggest deal ever undertaken in English football.” Galatasaray on the other hand has given the naming rights of its stadium to Türk Telekom for a period of 10 years for USD10.25 million each year starting with the 2010/11 season. The German giant finance (insurance) institute Allianz has paid a significant sum of money for Bayern Munich for the naming rights of Allianz Arena for 30 years. Several football clubs earn a huge amount of money from stadium naming rights. 

Television transmission rights, sponsorships

On February 20, 1992, English Football League’s first division clubs resigned from the league, and in May of that same year, formed the Premier League. The main motivation behind the merger was to take advantage of the lucrative television deals promised by Sky TV. In 1992, Sky TV paid GBP191 million for 5 years of Premier League television rights and in 2007, Sky and Setanta paid GBP1.7 billion for 5 years of television transmission rights. But the television deals were just the start; in 2001 Barclaycard paid GBP48 million for naming rights of the league, and in 2007 they renewed the deal for GBP65.8 million. Later in 2012 Barclays paid an additional GBP 120 million for additional three years. 

The Dutch beer group Heineken has been sponsoring the European football competition, the Champions League; watched by over 4.2 billion people, since 2005. Last October it renewed its contract for three additional years with an estimated payment of USD 70 million per year. Other current Champions League sponsors Ford, Gazprom, MasterCard and Sony’s Play station; pay hundreds of millions of dollars each year.

Barcelona previously refused to advertise on their uniforms except for putting UNICEF on their shirt in a deal the United Nations’ charity paid over one million pounds each year for, now they have put the Qatar Foundation seemingly a charitable organization, on their shirts receiving USD232 million over the course of five years.

Jersey sales and the income from ticket sales

Manchester United and Real Madrid have sold an average of 1.4 million official replica shirts globally each year in the past five years. Barcelona is No3 on the sales list (averages 1.15m sales a year) followed by Chelsea in fourth place (910,000). The top 10 also includes Bayern Munich, Liverpool, Arsenal, Juventus, Inter Milan and AC Milan.

Transfer fees and players’ salaries  

The maximum Premier League wage was abolished in 1961 and in 1963 the transfer system became far more lenient. As the player movement and wages became more and more flexible, English Football became more and more of a free market and basic capitalist principles took over. Football was changing, and there was money to be made.

 ClubAverage player pay in USD per weekAverage player pay in USD per year
1 Barcelona 166,934 8,680,569
2 Real Madrid 149,935 7,796,637
3 Manchester City 142,380 7,403,754
4 Chelsea 130,690 6,795,899
5 Milan 117,399 6,104,769

Cristiano Ronaldo’s salary of GBP288,000-a-week after tax is a new record. He earns about GBP15 million a year while Lionel Messi of Barcelona earns GBP13.41 million a year. Other highly paid players include Neymar of Barcelona Ibrahimovich of PSG and Falcao from Monaco with a total annual earning of GBP12.57, 12.16  and 11.74 million respectively. On an average payment among clubs Barcelona is the leading payer.

The developments in Africa and Ethiopia  

Samuel Eto’o, a Cameroonian player was once the highest paid footballer when he was on the Russian team, Anzhi Makhachkala, with a weekly payment of GBP327, 474.

In Ethiopia, following the qualification of the National Team to the African Cup of Nations and the breathtaking qualification performance for a spot in the 2014 Brazil World Cup, football’s popularity has been rising. The International brewer Heineken, which owned Bedele Beer, has paid 24 million birr to the Ethiopian Football Federation. MTN on the other hand paid six million birr for a similar sponsorship. Business people and the government have paid millions in prizes for players, coaches and others who contributed to the success. 

The player’s contract signing fees have skyrocketed from tens of thousands to hundreds of thousands of birr in just a few years. Now it is common for clubs to pay over half a million birr to get a player sign a contract for two years. Addis Hintsa, 25, is an attacking midfielder for the national team, now playing in Sudan was paid 700,000 Birr to extend his contract with his previous club Dedebit F.C. for two years. Even though this is officially the biggest contractual payment for a local player, industry observers indicate that St. George F.C. has paid close to one million birr to one of its well known players. Although it is uncommon for coaches to be paid for signing a contract, that is changing. In a few cases their salary dwarfs the presidents of major banks. For instance, Sewnet Bishaw, former coach of the Waliya Ibex, used to be paid 30,000 Birr monthly; Abraham Teklehaimanot, the former female national team head-coach, earned 25,000 Birr monthly.

The beauty of the game itself and the way it captivates an audience is what makes it so special. Without the game, there would be no money to be made. Fans can stomach the massive amounts of money spent when they witness the results. While owners invest in clubs as a business, it is hard to believe that they too are not captivated by the play they witness every week. Money may be the god to football’s religion, but the fans are the followers, and if there is no faith in the game, than there is no money to be made.

2nd Year . February 2014 . No.12


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