On your mind: How do EPL football clubs make money?
With Liverpool announcing pre-tax profits of £106 million for the past financial year, we just can’t help but wonder, how do the English Premier League clubs even make money with all the exorbitant transfer fees, massive player salaries and all those private jets?
Liverpool star Mohamed Salah is believed to be earning a mind-boggling £200K weekly!
Simple, ticket sales right? Actually, yes and no, we did a bit of digging and found out that these clubs have multiple revenue streams, all contributing significantly to their bottomline.
Of course, match day revenue is the first obvious revenue stream. Clubs charge a fee for their match tickets that can range from £9 to £97. Taking the average of £31 for match ticket prices and multiplying it by the number of seats they have in the stadium (Liverpool has about 54 000 seats), Liverpool’s match day revenue will easily exceed £1million.
On average, each person brings £31 (not including ancillary revenue) to the club each game!
Of course, this doesn’t include the revenue from ancillary services or products such as food, beer and game-day merchandise sales. And don’t forget, each team will play 19 times in their home stadium for each Premier League season. We haven’t even included other leagues/cups that they will be involved in.
This is where it really rains for the clubs. BT Sports and Sky Sports own the rights to cover the EPL in the United Kingdom after they paid £5 billion pounds (for 2015 - 2019). This would allow them to broadcast live matches to their audience on TV. This money pot will be shared among the clubs, amounting to about £81M per club.
Check out the value of the overseas broadcasting rights too!
What’s even mind-blowing is that we have not even included the rights to cover the league in other countries! In China alone, an estimated 20 broadcasters hold the rights to show the EPL games. Worldwide, there has got to be more than 100 broadcasters! Do a little bit of maths, and these clubs are really making it rain money!
Sponsorship is another revenue stream that is easy to understand. Similar to the way ‘social media’ influencers make money, brands fork out money for the clubs to advertise them. But in this case, it’s a truckload of money. Sportswear brand Adidas pays United a cool ~£75 million/year to sponsor their kits.
Car brand Chevrolet pays Manchester United £50 million pounds/year to have their logo on the United Jersey.
No prizes on guessing how many sponsorship deals a club can have! (Hint: literally infinite).
The revenue stream that we are all aware of - player transfers! Some clubs do make money from player transfers. For example, Leicester City sold Harry Maguire for a hefty £80 million to Manchester United. Two years ago, Maguire was bought from Hull City for only £17 million, making it a staggering £63 million profit! Smaller clubs tend to benefit from player transfers more as bigger (and richer) clubs snap up their higher performing players.
Average PL signing has increased exponentially from £600K in 92/93 to £15.8M in 2017/2018
At the end of the season, all teams in the EPL are awarded a certain amount of prize money, depending on their final position in the league. Last season, Manchester City won the league and with it a £38.4 million prize money. Last-in-place Huddersfield Town brought back only £1.9 million while second-last Fulham received £3.8 million to bring back to the Championship.
Soccer clubs have now evolved to be a brand themselves. The bottomline is, clubs make more money if their branding game is strong and if their name resonates with more people worldwide. That’s why more EPL clubs are choosing to go for their pre-season tours overseas in Asia and Europe to expand their fan base.
Now, shall we take a look at how the Singapore Premier League clubs are making money?