Football’s Changing Economics

The commercial development of football in the last decade or so has been much more swift, wide-ranging and dramatic than hitherto. While spectator income continues to be the major source of income for most clubs, other sources of income have become increasingly important; most prominently the huge expansion in television rights, but also commercial partnerships between clubs and non-football organizations and commercial exploitation of improved stadium infrastructure. As for most businesses these income sources are not risk free — for example, television rights income is in part dependent on wider economic factors like the buoyancy of the broadcasting market. It is arguable that conventional business risk is exacerbated by the fact that several of the sources are variable, being dependent on uncontrollable factors like sporting success or the competitiveness of the league in the country in which a club is obliged to participate. Taken together with the fixed nature of a club’s major expense, players’ wages, that are fixed contractually for a defined period and cannot be modified at short notice, it is clear that financial manaeement in football clubs is narticularlv challenging.