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In addition to being the game we all know and love, soccer can also be a lucrative business.
For billionaires and the extremely rich of the world, owning a soccer club can be even more than a money-making machine; it is a thing of prestige and status.
Sometimes, hundreds of millions of dollars are spent on a club when the future owner isn’t even sure that they can break even at the end of the year. So, how do soccer team owners make money?
Soccer team owners make money based on the club’s revenue and the percentage of shares they hold in it. These dividends are typically paid yearly, so it’s in the shareowners’ favor if the club performs well during the season.
Commercial revenues are also accounted into this: Sales of tickets, merchandise, as well as all of the sponsorship deals and TV rights sales contribute to higher revenue and a bigger earning on the soccer team owner’s end.
Data shows that 109 billionaires own the top 140 sports franchises, a large portion of which are soccer teams. However, not many soccer clubs are able to brag about being profitable.
In this article, we’ll take a short stroll through the typical costs that running a club can put in front of the owner and find out why those billionaires are so into soccer, as well as delve into the issue of making money as a small soccer club.
Costs of running a soccer club
The first and most obvious point in running a soccer club is the player and staff pay. Amateur soccer clubs, on the other hand, don’t have to worry about this issue.
This item can run the owner anywhere between zero and hundreds of millions per season, depending on the level of play.
The second point in running a club in securing the practice and game venue. For any professional soccer club, this means owning a stadium.
Even smaller stadiums can cost millions of dollars, while the world’s most impressive venues easily go above the billion-dollar mark. For amateur soccer teams, renting the space can be from zero to a few thousand dollars per season.
There are also various other expenses that are not too much of a strain on bigger clubs, but smaller clubs can barely scrape by for them. This includes basic equipment, travel expenses, and competition fees.
You’d be wrong if you thought that running a soccer club is cheap. It can be a strain, even for the richest people on the planet. One of the biggest soccer clubs, Chelsea FC, was more than $100 million in the red in a single year.
Being the owner of a soccer club that is playing in the US Division 4 can even be a major strain on the wallet:
By clicking on the link, you can see an example of the team that is $50,000 in the red for the season, even though their season’s initial budget was set at that point.
How do small soccer clubs make money?
There are a few ways in which smaller clubs ensure to survive:
Some smaller amateur clubs have membership fees that every player contributes to.
Even some professional teams apply this philosophy of operations, with the younger teams (under 8 and under 12) paying the membership fee.
That revenue is set aside for any expenses that the first team might have throughout the season.
- Commercial Revenue
This is what most of the smaller clubs rely on fully; the revenue from sponsorships, tickets, and merchandise is often more than enough to support these teams and keep the lights on.
Still, players shouldn’t expect extravagant pay and team-building sessions in exotic destinations if this is the only way that the team is making money.
Investments in small soccer clubs come in multiple forms. Some come from the players and the staff themselves, others come from crowdfunding and community outreach, and there’s always the possibility that an investor might get interested in the team.
Smaller soccer clubs can also function as a reserve team for a team in a higher league, so some trickle-down investments from the primary team’s winnings are always a possibility.
Why do billionaires buy soccer clubs?
Buying a soccer club is not something that even billionaires do lightly. The vast majority of them are savvy business people, which means that they are aware of the risk that buying a soccer team is. However, there are some benefits that can outweigh these risks:
Owning a soccer team can lead to meeting some people that the owner would never have the chance of meeting otherwise. This can lead to numerous business opportunities.
There’s a certain dose of prestige that comes with owning a soccer club, especially a large one. Hanging out with players, other team owners, and the wealthy and the famous of the world can, once again, lead to new business opportunities.
Some of us dream of playing for the best soccer teams in the world. Others dream of coaching them. Once we get to a certain age and realize that we don’t have the talent for either of the two, owning a soccer team becomes the next dream.
For those who have billions in the bank, spending 20 percent of it means nothing compared to the fact that they’re fulfilling their, and every soccer fanatic’s, dream.
As the old joke says, the fastest way to become a millionaire is to be a billionaire and buy a soccer club:
Just like soccer, running a team in this sport is unpredictable. Taking the risk of buying or starting a soccer team doesn’t payout, at least in the monetary sense.
The wealthy have always been patrons of sports, and that has, so far, worked both in our and their favor. If you have a stack, or a mountain, of money to spare and owning a soccer team is your passion, then go for it. Otherwise, stick to watching the sport on your TV.