Football: So where does our money go?

Football: So where does our money go?

We’ve all seen the protests about ticket prices and football clubs’ greed. A lot of fans are convinced that their club’s main objective is to generate profits at their expense. However, the facts paint a very different picture. Undoubtedly, watching live football has got more expensive over the years, but the reality is that tickets are not even the major cost for us fans.

A report commissioned by the Post Office revealed that while the cost of stadium entry accounted for 28% of the average fan’s total spend, travel and accommodation surpassed this at 35%. For some reason, it seems surreal that fans would gather with their placards and banners outside their local railway station or BP garage; however, purely looking at the numbers, that would make more sense than blaming clubs, very few of which even make a profit.

In sport, we love to talk about world class performers and compare those that operate at the elite level. Messi or Ronaldo? Klopp or Guardiola? To  put clubs’ commercial success into perspective, consider Manchester United, who generate more revenue than any other club in the UK. Founded in 1878, the club is today valued at £2.7 billion – which may sound impressive – but, compared to the elite in business, it’s pocket money.

Despite the club’s unprecedented financial growth in recent years, football clubs’ finances remain insignificant when compared to those of big business. Source: ManUtd.com

To name just a few other brands that you may be aware of, Twitter has created $58 billion in value since 2004 and even that seems modest when compared to Facebook, valued at $780 billion and founded 126 years after the Old Trafford club. Still convinced that clubs exist to make money? If the most commercially successful club in the UK was an actual person, they still wouldn’t even register on a rich list.

Elon Musk, now the world’s richest man, has a personal net worth of $190 billion meaning that he literally could afford to buy Manchester United 70 times over in cash. Whilst it is true that clubs are generating more revenue than ever before, it’s an illusion to believe that they are successful businesses.

In fact, the harsh reality is that football clubs are actually incredibly bad at making money. Again, using Manchester United as an example, in 2017 they earned the equivalent of 7p profit per fan and comparing that to another familiar brand over the same financial period, Sky TV earned nearly £100 per customer. And this is Manchester United and the top end of the Premier League, outside of which the financial picture deteriorates rapidly. Whilst some fans may dream of owning the club that they love, it’s usually an expensive hobby requiring money that will never be seen again.

Sport is one of the most valuable industries in the world, worth an estimated $800 billion per year and the vast majority of which is driven by fans. As a startup business, what’s really interesting to us is that for sure, Sky TV as the domestic broadcaster does very well out of the beautiful game, as do Trainline, Booking.com and other travel related sites. But have fans ever considered that the brands making the most money out of their devotion to their club are the social media platforms mentioned above and based in San Francisco?

You don’t spend money with Facebook or Twitter and yet they extract more value from you than your club ever will. Both companies make their money from your data and content which you kindly give them for free.

Just imagine how much value you could generate if there was a way to keep that for yourself.

FanHub’s mission is to ensure that you do.

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