Incomes and Expenditures in Football

By Akshat Sood

It is no secret that the world of football involves deals worth truckloads of money. Paris Saint Germain flexed their financial muscle by signing Neymar from Barcelona for a record-breaking €222 million. And in search of a replacement, Barcelona bought Dembele for €105 million paid initially which can rise to €145 million with add-ons.

So the question arises, where does all this money come from? And where is it spent?

Football clubs earn money mainly by selling players, through sponsorship deals, through the sale of merchandise, broadcasting rights, prize money received and revenue from ticket sales. Expenditures include buying players, wages paid to employees and players, agent fee, facility maintenance cost, stadium expansion cost and bonuses paid to players.

For big clubs like Real Madrid, Barcelona and Manchester United, the sale of merchandise alone brings in the north of €200 million. Talking solely about revenue, excluding any sponsorship money, Manchester United garnered a whopping €600 million in 2016 from ticket and merchandise sales. In England, the TV broadcasting deal guarantees at least €120 million to each club, irrespective of their performance on the pitch. The same figure is much lower in Spain. Currently, the English league has the most financial power, which was there for all to see as the English clubs spent over €1.6 billion on players in the recent transfer window, with average spending per club being near €83 million.

Coming to sponsorship deals, a single club has multiple sponsors, with companies vying to get their logo on the jersey of the team, or on the club’s website. In 2014, Manchester United signed a deal with Adidas worth €855 million, to make the latter their primary sports sponsor for the next ten years.

Competition prize money is also a main source of income. Based on their final position in their domestic league, and their position in the European league, clubs are awarded prize money by the organizing associations of the competitions. For example, the winning club of the Champions League, which is considered to be the most prestigious club competition, earns €70 million.

When it comes to expenditures, transfers and wages take up a bulk of the share. In today’s inflated football market, each top club spends at least €100 million on transfers. In England, Manchester City led the spending charts as they spent €280 million on transfers, with cross-city rivals Manchester United in second place, as they spent €190 million on transfers. In Spain, Barcelona spent €190 million and Real Madrid spent €46 million. Manchester United, Manchester City, Real Madrid, Chelsea, Arsenal and Bayern Munich pay around €200 million in wages to their players every year.

With so much money at their disposal, these football organizations are financial giants. Manchester United are the most valuable football team at €3.2 billion, Real Madrid second at €3 billion, and Barcelona close behind at €2.8 billion.

Football is the world’s most popular sport. There is a lot of thrill– the players playing and the fans cheering creates a wonderful atmosphere. There are last-minute winners leading to ecstasy for some and heartbreak for others. In the hearts of millions of fans, this sport is also one of the wealthiest.