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How Do Football Clubs Generate Wealth?

Football is a sport of money, regardless of whether its supporters feel like acknowledging that fact. It may come from working-class roots, but the modern game involves substantial sums of money and requires a constant stream of income to maintain. The way that a club generates wealth today can be a complex proposition, but most do fall into one of three simple categories – sales, merchandising, and licensing. Each aspect of wealth generation can help a team not only to provide more money for its players, but to stay afloat in the years when the club seems to be at its worst.
Clearly, the major way that football clubs create wealth is through ticket sales. These sales are the basis for the football club’s existence, and they bring in a fair bit of money any time that a game has a good crowd. The most basic local clubs tend to survive off of this wealth generation method, even if they don’t fully engage in any other type of moneymaking process. Ticket sales are a fickle beast, though, and many clubs that depend solely on good crowds can find themselves facing closure after a few bad seasons. As a basic element, though, these sales are still important to wealth generation.
Clubs that are a bit more successful tend to make more money off of merchandising. Basic items like clothing and banners tend to pull in a steady stream of income, even if the team is having a poor year. More reliable than ticket sales, merchandising is still subject to the whims of the crowd. Clubs that are particularly successful can make more off of merchandising than they ever will off of ticket sales, while teams going through a rough patch might find that their merchandise sales can help them to barely stay afloat.
Licensing is also a very important piece of the money making puzzle. Licensing is much like merchandising, but it allows a third party to take most of the risks. The club enters into a contract with another party for a particular fee (sometimes flat, sometimes based on sales), and the club then makes a steady profit stream. Licensed deals can include anything from clothing to an online slots company, but the important factor is that the use of the club’s name or image which allows the club to make money through different channels. Teams with licensing deals have an easier time weathering bad years and dealing with salary issues.
Football clubs have many ways of generating wealth. Be it through simple ticket sales or complex licensing arrangements, any club can find a way to make money. The most successful clubs are those that create wealth when not on the pitch, and that can continue to make money even when they have a bad year. While football is always a fickle mistress, smart planning can allow any club to continue to make money and to prepare for a better year in the future – it just takes a bit of effort for the team’s marketing group to accomplish.

 

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