1 How Have Companies Ruined Traditional Football in the Last 25 Years Due to Their Desire for Money? “Why couldn’t you beat a richer club? I’ve never seen a bag of money score a goal” - Johan Cruyff Football as a professional sport started in England in 1885, it was considered lucrative but until a certain point, it really was played for passion and not for money. In contrast, today’s football generates an absurd amount of money, and the biggest teams are the ones that spend the most money and are usually run by big companies that look at football as a profitable business and not as a sport. But how has this happened? Identifying how and why this happened can help us understand the real significance of this sport, and maybe we could answer the question, how has one of the most popular sports in the world become a business? CHAPTER 1 But to understand how football moves so much money, we need to know where this money comes from. In general terms, the revenue generated by football clubs is divided into 5 categories: the transfer market, broadcasting rights, merchandising, matchday tickets and sponsor, all of these categories generate millions of dollars. So, to really understand this topic, we need to dive deep into every category, not only its current state, but also seeing how these categories have developed and how they became more profitable in the last 25 years. The transfer market has exploded in the amounts of money that are spent by clubs to buy players. For example, in 1992, the most expensive transfer in the world consisted of 3.6 million dollars (Alan Shearer moving from Southampton to Blackburn), today, the most expensive transfer in history is Neymar Jr. who moved from F.C. Barcelona to P.S.G. for 222 million dollars. But how have these spending amounts changed so drastically? This development in the transfer market has happened throughout the years, it’s been a steady transition that has led to this. Clubs have slowly spent more money throughout the years due to release clauses (an amount of money required to sell a player without negotiations with the club), and the other reason why clubs have started spending more money in players is because of their general revenue, they receive so much money, that they can afford spending millions of dollars on players also because they sell some for the same amounts, even generating profit. Broadcasting rights probably marked the beginning of football turning into a business, these rights consist in big TV companies paying leagues and clubs for their TV rights for millions of dollars, this provides clubs with a lot of money that can later be used for the transfer market, wages or other spendings. But since when have broadcasting rights moved so much money? This began in 1992, the year were the English Premier League was formed, this league, the English football league made the transition to the Premier League because of a 191 million dollar deal with the Television company Sky TV, for 5 years of the broadcasting 2 rights of said league. This provided clubs with extreme amounts of money that was later spent, also affecting the transfer market with bigger amounts of money being spent. This revenue also increased, in 2017, Sky TV and Setanta paid 1.7 billion dollars for 5 years of rights. This money will keep increasing and it will continue providing clubs with absurd amounts of money provided by companies, but especially within the biggest clubs and leagues, leaving the smaller clubs at a disadvantage. Merchandising also generates millions of dollars for clubs, and especially with the club jerseys. These generate so much money because fans want to have the newest t shirts or match jerseys from their favorite club, and taking into account that these shirts are released in 3 different designs every year (local, away and third shirt) and also with new designs every year, fans want to get their hands on every shirt they can to support the club. For example, English club Manchester United made as much money from merchandising in the 1996-97 season, as revenue from matchday tickets in the same season, so in theory, Manchester United could’ve played with an empty stadium all season, but would’ve still generated millions of dollars in revenue for the club. Clubs have also started generating even more money thanks to shirts in recent years, because of the increasing prices in these shirts. The jerseys have started including better technology for transpiration or other specifications, which have increased their price. Also, these prices have increased because clubs have divided their shirts into 2 categories; the standard shirt (which is around 90 dollars), and the professional shirt (which is the one used by players and is around 150 dollars), these provide the club with millions of dollars each year. Matchday tickets also generate millions of dollars in revenue, this because fans from all around the city and the world gather to watch their favorite team in the stadium, the amount of people that attend matches in high-level football varies from 10,000 to 90,000 people, and taking into account the matches clubs play at their home stadium (around 25 each season)., we can conclude that the profit made by these teams is really high. As an example, this season’s UEFA Champions League final between Liverpool and Real Madrid, was attended by approximately 75,000 people, with a price range varying from 70 dollars to 690 dollars, this surely generated an absurd amount of money for UEFA (the Union of European Football Associations). The last category that consists of the money generated from football clubs are sponsors, they pay millions of dollars for deals to appear in the club’s shirt, stadium or advertisements. These advertising methods prove to be efficient for companies, because the sponsors included in the club shirts always appear in images, matches, or the shirts that are worn by fans. As an example, in this year’s Champions League Final, around 400 million people watched two teams that have the shirt sponsors of Fly Emirates and Standard Chartered for more than 90 minutes. These deals do not only generate millions of dollars for companies through the indirect advertising, but also to clubs thanks to these deals. As an example, in the 2010’s, Barcelona received a deal from the Qatar Foundation to appear in the front of Barca’s shirt for 5 years, this deal consisted of 232 million dollars for the spanish club, proving that the money generated from sponsors in enormous 3 Now knowing where all this money comes from, we can identify if companies and dollar bills have actually ruined the game we all know and love. CHAPTER 2 Now that we already know the amounts of money generated by the sport, where it comes from and how it generates some much profit for clubs. We need to prove if money actually affects the game itself, if teams run by companies or teams that have a lot of money actually perform better and win more than smaller clubs that have less monetary resources. To actually analyze this information and research question, we are going to observe the trajectory of these 3 clubs: Paris Saint Germain, Manchester City and RB Leipzig. We will cover when they were taken over by companies, how much money they spent since being acquired by said companies, and if the money has actually been well invested; we will prove this by seeing their net spend, the titles they’ve won and how they are viewed by the world of football. To begin, we will focus on the English club, Manchester City. This club was founded in 1880 in the UK, but they became a big club when they were acquired by the City Football Group (managed by the Abu Dhabi United Group) in 2008. Since then, in terms of net spend (the total amount of profit or loss of a club in the transfer market, taking into account their sales and acquirements), they have a loss of -1.8 billion dollars only in the acquisition and sale of players, this since 2008 when the club was bought by this company. These are absurd amounts of spending in the transfer market, but taking into account the crazy net worth of Manchester City’s owner, Sheikh Mansour, who has a net worth of 22.9 billion dollars. Now looking into the performance of Manchester City in their domestic league and internationally. In the last 14 years. Manchester City have won 5 Premier League titles, 8 domestic cups and 3 FA community shields. You might think this means they have been incredibly successful and all the money spent was worth it, but in fact, in those 14 years, Man City haven’t won 1 international title. Even in their entire history, they haven’t been able to get one European silverware, which has obviously shown some level of failure and this had led to Manchester City being seen as an “oil club” (an idiomatic expression which means to a club based over money and business and not passion). This shows that companies and their investments might help clubs perform better, but not reach international glory. A similar case to Manchester City’s is seen with the French club, Paris Saint Germain. The team was created in 1970 but its financial takeover took place in 2011, when PSG was acquired by the Qatar Sports Investments group (a company actually owned by the Qatar government itself). PSG has totally dominated France in the last 10 years, winning 27 trophies for the men’s team (this between league cups, the Ligue 1, and the Coupe de la 4 Ligue), but again, no European or international silverware for PSG. In terms of net spend, PSG are not very far behind, having roughly a -1 billion dollar net spend for the french club, including the 2 most expensive transfers in football history (Kylian Mbappe for 145M dollars and Neymar Jr for 222M dollars). They are viewed in the same way as Man City, the media and world see them as a club who has ruined the market by buying the best players for excessive prices and offering them wages that they can’t decline. The last club we are covering is RB Leipzig, this club since the creation of itself was owned by the company RedBull. The German club was founded in 2009 by RedBull, a company who has left a mark in football in the last 10 years, with the acquisition of clubs like RB Salzburg, RB New York and RB Bragantino, these clubs are scattered all around the world with the purpose of making profit and advertising the company. This club started in the German 4th division, and has made its way up to the Bundesliga (the German first division). Although they have grown rapidly and have turned into a big german club, the only major trophy they have won since their foundation was the DFB Pokal (the German cup), they won it last season and it has been the only set of silverware they have won. In terms of net spend, Leipzig has been more responsible with the amount of money they have spent, having a 5.8M dollar profit in the last 3 years. But in the public view, RB Leipzig is the most hated club in Germany, hated because of their owners (RedBull), and how they have turned into a big German club in only 13 years of its existence, which infuriates the German fans. All these clubs are not liked in the public view, have wasted a lot of money and haven’t won an international or European silverware since their acquisition. In contrast, the clubs that have won European silverware are clubs that have already been established as historic clubs like Real Madrid or Bayern Munich, they have been winning everything since decades ago. CONCLUSION Returning to the thesis, football has turned into a business because of the insane amount of money that are moved through this sport, but that doesn’t particularly mean it has been ruined, because as seen in the cases of these 3 clubs, they have won a lot of trophies domestically, but they haven’t been able to win the biggest trophy, the Champions League, they have been beaten by tradition, by royalty and by passion. Now that we can understand how this happened and why this happened, we can conclude that money will still be present in the sport for many many years, but that won’t particularly mean they will ruin football, because this sport is bigger than anyone, it can’t be changed, it can’t be destroyed, it can’t and never will be ruined. Never. SOURCES: Szymanski, S. (February 21, 2020) Inside the Business of Football. OpenLearn. Recovered the 15th of September 2022 from https://openlearn.medium.com/inside-the-business-offootball- 5 4537acec31bb#:~:text=Professional%20football%20is%20a%20business,%2C%20sponsorsh ip%20and%20broadcast%20rights . Dowding, C. (September 8, 2008) Is Money Ruining “Our” Beautiful Game of Football? Bleacher Report. Recovered the 15th of September 2022 from https://bleacherreport.com/articles/55533-is-money-ruining-our-beautiful-game-of-football . Hammé, B. and Galiena, G. (December 20, 2019) How Do Football Clubs Make Money? Iterpro. Recovered the 15th of September 2022 from https://iterpro.com/how-do-footballclubs-make-money/ . Montoto, T. (November 30, 2020) Together We’re Stronger: The Synergy of Red Bull Football Teams. Medium. Recovered the 15th of September 2022 from https://medium.com/box-2-box-eng/together-were-stronger-the-synergy-of-red-bull-footballteams-cef1df4c6e7c . Autty, R. (May 12 2022) How Many Titles and Trophies have Manchester City won Since 2008? AllFootball. Recovered the 15th of September 2022 from https://m.allfootballapp.com/news/EPL/How-many-titles-and-trophies-have-ManchesterCity-won-since2008/2609495#:~:text=Manchester%20City's%20honours%20since%202008,in%202012%2 C%202018%20and%202019. . Pope, C. (August 6, 2021) Every Time the British Transfer Record Has Been Broken During the Premier League Era. FourFourTwo. Recovered the 15th of September 2022 from https://www.fourfourtwo.com/features/british-transfer-record-broken-fees-signings . Khan, A. (February 28, 2022) Bundesliga Net Spend, Breakdown of Every Club’s Transfer Spending. Total Sportal. Recovered the 15th of September 2022 from https://www.totalsportal.com/money/bundesliga-net-spend/ .
