Why Football Is Bad Business
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Football is the beautiful game that brings in billions of dollars every year as the world’s most popular sport. There’s been no shortage of controversy with the World Cup in Qatar. Yet most people learn and follow football through leading clubs like Liverpool and Manchester City in England, Juventus and AC Milan in Italy or Barcelona and Real Madrid in Spain.
It is these clubs that make the spectacle of football possible. On the outside, the biggest football clubs seem successful - they win trophies, pay high salaries, play on the biggest stages, and sign the best players. As these clubs achieve success on the field, their brands get stronger, which grows the fanbase, and fuels revenue. The business seems simple enough. And with so many famous clubs all over Europe, this flywheel must work.
But in reality, football clubs are businesses that are barely cash flow positive and bankrupt themselves to sustain on-the-field success. They say that if they keep winning, money will materialize in the future to offset costs today. Or these clubs operate at losses with the goal of one day flipping the team for billions in appreciation.
Whether they’re run by corporations or sheiks - a successful football club, simply put, is an unprofitable one. In this episode, we’ll look at the problematic business of football clubs through Manchester United, Juventus, and Barcelona - and how it is only a matter of time before every successful football club is run by a rich oligarch looking for their latest passion project.
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🎧 Audio Editing & Mixing: Sonalf
0:00 The Beautiful Game
6:01 Glory Glory Man Utd
12:55 Atoms For Sale
17:29 Storia Di Un Grande Amor
23:32 Barca, Barca, Baaarca!
28:50 A Virtuous Cycle
🚀Get free stock when you open an account at public.com/ModernMBA and earn up to $10,000 when you transfer from another brokerage. 0:00 The Beautiful Game 6:01 Glory Glory Man Utd 17:29 Storia Di Un Grande Amor 23:32 Barca, Barca, Baaarca!
🇨🇦💘⚽️
cringe ad for cringe crypto lmao
Making a video about football so you can write off the expensive ticket for the barca match, clever!
I was going to comment on this as well. They also did a video where they traveled to Korea to get a hair transplant, which I assume was written off as well. Clever indeed.
Because it doesnt fit his hypothesis
Smart but not worth the hours he puts in for this quality content
@@tylerhasbeo Why?
He a hater 😂
Quick correction: Manchester City is owned by Abu Dhabi in the UAE, not Saudi Arabia - Newcastle United is owned by Saudi Arabia
By this logic, Manchester United is owned by USA
I was like what, when i heard that
Correction: Newcastle United is owned by PIF (not Saudi Arabia).
@@anon-zk6iz And who owns PIF? Let's stop lying to yourself here.
@@askkedladd Ask the PL. I am saying what's official.
As an asterisk there are outliers such as the clubs owned by Red Bull (RB Salzburg, RB Leipzig, etc.) which are run as cash generating businesses. Also, would be useful to look into the profitability of Portuguese clubs (Benfica, Sporting) who are known for developing players before selling for an extreme markup. I'm not sure of the profitability of these clubs, but would be a good case study for how clubs can be made profitable without sacrificing domestic success.
The Portuguese clubs are not that profitable though, income from the league side isn't amazing and some of those player sales are rushed in order to not struggle financially that year or the following one.
@@homiga1 there is also the issue of jorge mendes etc owning the player, not the club. Almost no Brazilian players coming to Europe now are club to club transfers
a part two covering these clubs would be very interesting to watch!
That's not a solution. The solution is to follow the American Sports team examples of profitability and start instituting 4 quarters with ad breaks. Honestly so easy to make money with the world's largest audience.
@@designexplainedllc346 Horrible take. You clearly do not understand the football market or how the sport works.
"Up north from Italy to Spain" i may not be an A+ at Geography but im pretty sure Spain aint north of Italy 😂😂
I was like, bro, Barcelona is literally west from Italy 😂
Just an honest mistake
I don’t think the AIG sponsorship “expired”, more like the entire company collapsed in 2009 😂
A part two to this video looking at clubs like Ajax, AS Monaco, Porto, benefica, and/or Sevilla would be amazing. As these clubs not only regularly punch above their weight but do so while turning a profit.
He completely missed the mark on this one.
Sevilla only punch above their weight because they dive and play keep away for 90 minuets with the philosophy of if you can't score on me it doesn't matter if I can't score just like Sociedad.
Ajax only diving and arrogance club
Lol, Ajax is a dishes cleaning tool in my country 😅
@@victorkreig6089 fool
It is a broken business because there are actors, who do not care about being profitable. It would be like if you had to compete with a restaurant that would gladly take a loss on every single item because they had so much money coming in from elsewhere.
Yep but low table clubs can’t act like that so there’s a huge difference in the quality of the lower tier teams and the top teams
@@GTM9164 meaning what exactly, that the smaller clubs have a higher quality ratio for their players performance compared to how much cash they put in, versus the larger ones?
yes but the quality of football they play has gap that is widening. Man city Bayern Barca etc vs the low table teams in the respective league isn't even close in terms of quality of the product of football. Unless the big teams have a really bad game and the low table team has a really good game.
It's more like a restaurant taking a loss to buy all the best cooks, recipes and ingredients in the market leaving the competition to work with scraps and dishwashers.
What about Bayern Munich? They've been profitable for almost 20 years (not by much, but pre-pandemic they recorded 50 million euros after tax in profits) and they are very succesful year after year.
Yes it seems like he intentionally left out German Clubs
Maybe it's more the outlier than the rule
@@TheSeargentStriker don't think it was intentional. He didn't mention Netherlands, Portugal or France either. Fact is the British, Spanish and Italian leagues are the biggest in the world with the biggest revenues and spending, so they were the best examples. German teams tend to be a lot more conservative with their finances which is part of the reason they have much lower international appeal, even though their teams still have success in the international stages..
Americans don't know too much about sport outside their nation it seems
@@Rayansaki Thats not true. Both Ligue 1 and the Bundesliga have higher TV viewer numbers than Seria A and if we go by average Attendance for every game Bundesliga has the most, even ahead of the premier league
Leeds United in 2000's is probably the textbook Case 0 for the current day economics of football clubs.
One problem with Barca. They’re a 100% fan owned club owned by 220k members from all over the world. I don’t think Arab oligarchs can buy them
That’s not a problem, it’s a good thing
@@duaneswaby622 Absolutely! It gives a voice to the fans since they get to vote on most important decisions that the board takes and they can even sack the president of the club if they gather enough signatures
nice
@@aliraid1295 Having fans own the club is dumbestr idea in the world, that why your going broke fans don't fund clubs.
@@ifldiscovery8500 you don’t have to worry about Barca for every season for more than a decade they were the club that generated the most money in the world and the only sports team ever to generate 1 billion+ dollars in a single season and they did that twice in a row. What broke them was the monstrous contract of Messi paying him 555 million Euros in 4 years and buying extremely expensive players every season also overpaying them whin they didn’t even play well for us and the biggest reason is the ongoing construction on the stadium and training facilities which cost 1.35 billion Euros . So with the construction finishing in a year and cutting their spending drastically and with the big sums they generate each season they’re expected to recover financially in few seasons
Develop your own Players. This is what has been lost.
Your own players would be bought by bigger club lol lol
It's not lost. Those player are just used by bigger clubs to generate revenue through loans and sells.
@@kauswekazilimani3736 in some part it is mostly no but club like Madrid dont use academy players look at their line up most of them are brought and if they from academy they dont make the team only one starter from Madrid is from the academy and is Carvajal and he barely fit getting old and he pretty much the weakness of Madrid
Babe wake up a new Modern MBA video just dropped
I don't know why, but this is sooooooo funny 😂😂😂
I think the problem is that everyone is expecting salaries that doesn't exist because they see everyone else getting high salaries.
Yeah they seem sustainable in the log run. I wish my company paid me $200m a year lol Billionaire Tech CEO don't even make that much.
😅
A video from modern MBA about my favourite sport? Hell yeah.
And he never even called it soccer once, it’s truly a blessed day 🙏
Manchester City is not owned by the Saudis but by a sheikh from the UAE
A small correction at the end. Manchester City is not a Saudi club. It's owned by UAE's Abu Dhabi Investment Authority.
All "Arabs" are the same to some people. I grew up in Dubai and I still sometimes get asked "are women allowed to drive there?" by people in the west. Although Dubai is a playground for all forms of debauchery one can imagine. But the media narrative has painted the entire middle east with a broad brush for decades and that's what sticks in peoples' minds.
@@kb_100 Agree. I'm from India and I grew up in Sharjah. Dubai is the complete opposite of Saudi but Westerners are ignorant.
@@JoelJohnson24westerners are "east bad and backward to our degenerate standards, so they're all shit, boooohhhoooo they value modesty and family values, very primitive, we're so progressive we don't even identify a women, because we cannot anymore"
In a business where some actors are willing to operate at a loss it is impossible for anyone to make a profit.
Some businesses/companies do that sometimes to gain/retain market share and crushed their competition.
now here is a brain teaser with a hint. Hint: accounting sheets often consider time sequentially but can obscure some factors we wanna observe stably even with the variance in time. --> Now when it comes to profits there is the profits with respect to time (perhaps in a fiscal year of sorts when it comes to accounting i.e. quarters) which may provide me a relative rate of profitability year over year, quarter over quarter etc. but theres also the mass of profits, i.e. how much profit i made the last time added with the amount i make the next time etc. and how is that relative to the mass of losses. is this notion not the notion of profitability we mean when we speak about it in terms of football. as in yeah juve may have a loss this year, but in 3 years we expect a huge boom which will offset these losses. Also, the fact that a team has such liquidity to provide under the table deals when it is supposedly at a loss is bewildering no?
basically, top football players are way overpaid, they don't generate nearly enough income to justify their salaries, which is not something that ever happens with most other athletes or other type of celebrities like pop stars, you wont ever find a label paying an artist more than they bring in income. Its due to the very specific and odd conditions of the industry.
Not true... Look at how much clubs sell for.
If you dont pay a high salary, your player will be bought by someine else who does. And thus starts the competitive death spiral.
@@vaiyt yep, the players will go to oil clubs 🥲
@@Robert96902 If hypothetically they all do and run to the oil clubs, then what happens?
@@kennythelenny6819 then oil clubs will dominate the leagues
I appreciate the anecdotes you added here. It's one thing to make a video showing research but it's another to actually experience it yourself as well.
Despite the bad financial moment, Barcelona profited in 21/22 98M euros. Clubs like Bayern, RB Leipzig and Real Madrid were also profitable on 21/22. Every business is bad if you run it like Manchester United.
I don't think the assumption that "if spending goes down, so will quality" holds up. That assumes a perfect, or near-perfect, correlation between salary and quality, or transfer fee and quality. As you mentioned, Barcelona have, over the last few years, given the footballing world a wonderful lesson in inverting this truism.
Clubs like Bayern Munich spend less relative to the results the are getting but generally speaking a club that has 300 mill budget will perform better than one with 1 mill
My little FC Freiburg is doing pretty well
@@SB-mg1wy But not well enough to win the league.
Exactly, if there was this correlation then Barça should've been winning everything as they spent so much since selling Neymar.
Great video, I also would have loved a focus on PSG and also some smaller/mid size clubs in the premier league to also compare if at any level/location, a football club could actually be profitable. What about a video on the NBA as well too? Love the content
PSG is funded by gas giant, Qatar. They have so concern with profitability. The very same Qatar wasting 220 billion on a world cup.
Most NBA teams are very profitable so the situation is not the same.
MLB,NFL,NBA,NHL and MLS each of these would make fantastic content!!!
This is largely due to a lack of a salary cap, forcing many teams to spend or die, as they cannot compete. NFL teams, NBA teams, even NHL teams continue to be profitable
They don't have the same system USA sport's is closed unlike football who is open for every team to compete if you do a salary cap every player in the top team will leave to England cuz the cap will be higher there
@@rox282 uefa financial fair play is almost never enforced either
The MLB is uncapped and it's still profitable, even if some teams are utter cheapskates when they could spend more. So I don't think it's the salary cap.
@@weirdofromhalo Profit for MLB comes from the insane TV deal they have throughout the US, and despite that a majority of the teams can never compete because they don’t have enough cash. Profitable? Yes. but not competitive
@@weirdofromhalo MLB has many more stoppages then European football does and thus many more opportunities for advertising
I have to add another angle to this. There is a lot of income off the books. Especially in small clubs in the top three championships and in other leagues all over Europe. And the big clubs prefer it this way because they benefit also. A lot of betting money is being generated in international betting industries. Last but really important the owners of football clubs benefit by associating themselves with the clubs. This comes to benefit them in other economic endeavors they take.
I think this is not an industry-level analysis but a team-level analysis. Teams don't benefit from betting and you haven't given a reason why big clubs benefit from small clubs. Also, what off the books income were you referring too? Game rigging?
Betting is the main reason behind the refs being so shite in the last few years, they now get paid to influence matches to arrive at set full time outcomes. Literally match fixing or at least attempting to And UEFA sanctions it
You should do a video on hello fresh and it’s industry
Great video & clearly a lot of research was put into it. Wonder why PSG was not mentioned specifically though
Great video! Well done again. One thing to add. The football is devastated by the lychees of middlemen that push this transfers to sky high prices. There is no way Dembele, Coutinho, De Jong or the fodder that Man U has been collecting over the years costs tens of millions of Euros. They are paying for average players extraordinary amounts for, imo, only to satisfy agents and keep the world turning. That in turn pushes all the prices up (even if you exclude the 3 case study teams). Why did the players start needing 20m annually to warm the bench and why the transfer fees even of the most average player is at least 30m? i cant think of any other reason other than middlemen. Just putting out my thoughts here, maybe I am wrong
would a salary cap solve this issue?, or is it not a realistic solution
Bad analogy, United's prices were specifically inflated by Woodward and the top brass at United in order to keep stock prices as high as they are. Players going for so much means the stocks stay high due to the high cash flow, which means the club keeps it's worth which means that they can continue to leverage bank loans against the club's market value to pay themselves millions while the club struggles financially. The good news is they have run out of credit at the bank and will no longer leverage loans against the club's market price, this is the main reason the glazers are looking at selling the club
@@prod.german It would, but then the players would just move to a league in another country which doesn't have a cap, weakening the league. It's why, despite wages getting ridiculous in the Premier League it won't change, becaue higher wages is the biggest reason players will move there over clubs in other countries, and that makes it the best league in the world.
@@prod.germanlaliga and the efl league 1/2 already has a salary cap based on turnover, UEFA and the premier league has Financial Fair Play/Profitability & Sustainability where clubs cannot lose more than £15m/€5m over 3 years
@@theblackswordsman9951la liga has a salary cap and everyone else has FFP/P&S
It isn’t Man utd or Barca that really show the problem in football business model it’s yo-yo clubs like Norwich or Fulham that really show the problems
Yoyo clubs make a lot money getting into the prem then repeat...
Competing with billionaires like Roman Abramovich is one thing but to compete with the whole country?
On the longest time scale every business becomes a bank
All those millions could solve world hunger, but the greedy continue to greed... This world is absolutely crazy...
I appreciate the effort and research you put in these videos. I always end up learning so much. This fascinates me a great deal. Keep up the good work.
Please don't listen to him, he doesn't know what he's talking about
THat was amazing, only spectacle matters 90% of the time, you just can't be a business machine and leave football to dust.
Going the same way as hockey. Tv and ad revenue are king. Hopefully it doesn’t destroy the soul of the sport and just the business side
This was very well done. I appreciate the time and work you put into this
Would love to see a video in the future on the fastest sport to become a Billionaire to a Millionaire: Formula 1.
Really great vid. The way you pronounced “premier league” almost drove me to insanity though haha
Talking about the Super League without including Portuguese teams is ridiculous. Tighter spending needs to be the way. We see some clubs being managed with decent profit and still being able to achieve in-field success. The wild transfer fees and salaries are not correlating with sports success at all
Hats off! This entire video essay is the best thing I have watched this year. Kudos!
This is wild. I honestly believe players are overpaid. Cutting players salary across the football industry is actually needed. It's a necessary evil. I wish you can do this for basketball teams in the US. I know there was an introduction of a team salary cap at a time.
The larger teams would only agree to that once they are actually forced into bankruptcy.
Salary caps are actually good. Wouldn't have bloated teams such as PSG, Chelsea. Juventus Bayern United and City. Besides City all these teams reached a tipping point. Plus building the team around one or two players actually makes the teams more exciting. PSG is a crazy case for salary cap, they spend more than a million per week on just 3 players
@@posebnonista615hmmm interesting... wanna elaborate? (not disagreeing, just curious)
@posebno nista can you elaborate? are you talking about footballers in the big clubs?
Yes! We need to make sure the owners can earn a few additional millions a week from the work of the athletes! It's the American tradition of exploiting their labor force and we should certainly feel sorry for the owners for having to give some money for the revenue the players are generating. The greedy bastards those players are!
literally just establish a salary cap and a salary floor… really not that hard to fix but everyone too greedy
Yes I agree, I think football players should earn no more then 15 million pounds or its equality in other currencies a year.
Club that strive for Sustainability like Ajax dortmund or Leipzig are not going to spend 100m euros for players thus will never be bigger brand than man u or barca. So only oil merchant can afford these big clubs
Don't forget that Jeep and Juventus have one major owner - the Agnelli family.
Every team you studied has one problem in common. They are all in their current negative situation because their club academies have failed to produce talent like they used to. As a life-long football fan here in Europe I can assure you that this is the fundamental reason for the financial woes of these clubs. Barca's situation is particularly interesting, as they produced the best players in the world at the start of the 21st century, but have since paid huge money for huge flops like every player you highlighted in your video. At the same time their academy has gone from producing the best players in world to merely decent ones. Young talented players often find themselves locked into low value contracts for the first four/five years of their careers, which can therefore be sold-off for massive profit while such talent is still under contract. No true fan would shed a tear if all the clubs who's finances you highlighted went out of business, so long as the current league structure is maintained. It is relegation and the risk of financial ruin that makes football what it is, and turning football into a product which contains a bunch of safe assets would likely see interest in the sport fall. You are failing to understand the historical and almost familial relationship a club has with its core fanbase. You are also strategically failing to mention clubs like Bayern Munich or Ajax, which generate a profit year after year precisely because they refuse to overpay for players and opt to generate their own instead. The bad management of a handful of clubs should not cause the demise of the cherished European institution that merit-based football leagues represent.
Gavi and pedri say hi.
and he misunderstood the profitability of the clubs. the clubs are still massively profitable for the owners, not to mention that the owners do not internalize the costs and debt leverage in order to make these transfers -- which are often very merky when it comes to public details and specifics over how things will be paid out. the big clubs make lots of money for their owners, which also partly explains why smaller clubs are squeezed if they do not sell, and if they attract less rich fans they are capped over how much they can raise ticket prices without alienating their supporters. Their is a reason why some of these club owners are rich with the football club as their biggest cash cow irrespective of what the books say -- and debt is a big aspect of it. a wise man once said if im in debt 1 million then im at the mercy of the bank, if im in debt 1 billion then the bank is at my mercy/i own the bank.
@@lilbaz8732 Pedri didn't come out of La Masia.
1. Potential to be relegated. 2. No real financial cap on labor spending (unlike say American football) 3. Risk of players getting injured in international events unrelated to your club. 4. Not enough stoppages (less opportunity to advertise and partner with companies).
Dang I just bought some MANU stock, thanks for the heads up. I own a soccer team now!!
Thank you for doing the video so thoroughly by buying a VIP ticket to a Barca game. We salute your sacrifice.
The choice to not include background music is really intriguing, and I actually prefer it.
Bayern München is as successful as Football clubs come and they are consistently profitable , they also have no net debt. And no it is not just because they dominate their league, because they have been profitable for a long time
Aren't they more of an outlier?
All thanks to the blood, sweat and tears Uli Hoeneb and Karl-Heinze Rummenigge have put into running that club for almost 50 years and the big mistakes they both made along the way in the 80's, the FC Hollywood days which was much of the 90's, having no real succession plan when the Ottmar Hitzfeld era came to an end, etc that they had to learn from to get to where they are now. There is a phenomenonal documentary about all about by who I regard as the absolute best football content creator of KZhead called 'Balon'.
If man City win the treble, the reward would get the owner more money than he paid for the club.
Great video, thanks. Well researched and informative, seems kind of obvious after the fact. Nice one!
I was hoping you'd make a football video. My wish came true, it's a Christmas miracle.
I wonder why the Bundesliga is ignored in this video. Bayern Munich, as mentioned by you, has trashed Barcelona the last few times they have met, and yet they have turn a good profit over the last few years. BVB can win against the biggest teams on a good night, by basically playing the next generation of super stars.
nah they cant unle they haves someone like lewa or good midfield and upcoming defender then nah they lot to 12 place chelsea
Maybe there should be a part 2 and explain clubs that are run well.
Bundesliga suck bro.. it's bayern league and there's no competition cause every young player who have some talent in middle table team in Bundesliga get snatched by Bayern..
When the majority of the fans* are not in Europe and South America, and football is just like watching a Netflix show, the sport losses it's core value. This why the WC was where it happened this year. There is no longer any value added to the football culture.
Football is actually a popular sport in Africa as well.
@@giftokoh7153 Yes, but as it is today is a European and South American sport. The way Africans live it is absolutely different, and the ways Arabs, people from South Asia live it is completely different. That's why it has become more of marketers gimmick, where as before a club was deeply rooted to its city. A club carried it's local culture, foreign players were an important part and they adopted this new culture and were accepted to it. This is no longer the same. Manchester United doesn't care if they win at all because fans from India and Pakistan care about the brand, and it being "cool." They don't know much, if anything about the local culture in Manchester. This is why the club doesn't even care about the city anymore, it markets itself for the Asian and Middle Eastern markets. For example, you have Real Madrid a Royalist Catholic club, and there is a bunch of anti western people from the middle east using the image of the most traditionalist club in Spain. Which is insane. A lot of the value of football in Europe and South America is the culture and local traditions, the club means more than just a Sunday game. It represents the local people. It can represent the poor people from a city, a local minority, it isn't just a game. An international game was a meeting of 2 cultures it was an special event, even just a friendly. That has been lost with football.
@@jjj8317 What has all your said got anything to do with what I say. My point is that football is the most popular sport in Africa. Football is not nearly as popular in Asia. As for your nonsense about a lot of the values of football having anything to do with the local culture of exclusively European and south American I can not see how a team sport like football has anything to do with the values and traditions of people from Europe and south even when there are many ethnicities and languages in these two continent which are very different from one another so can not be put together in one category. Also what values of football? There are no cultural values in football and has no relation to the traditions of any people to claim so is ignorant and unhinged? Where did you come out with all this rubbish? What is this marketing gimmick you speak of?
@Gift Okoh that's why you don't get it, it is not part of your culture. It is just a popular sport for you. You wouldn't know whereBilbao is on a map without Google, for us it is part of the culture. Like in Spain, Bull Riding goes back to the Roman Empire and its part of the Spanish identity. You don't understand it, you don't get the whole cultures of the ultras, the rivalries between cities, the representation of different regions because it is not part of your culture. You see Barcelona vs Madrid and see Modric vs Busquets, you don't understand the Spanish culture and the rivalry between Republicans and Royalist, or Ajax vs Feyenord, or Boca Juniors vs River Plate, or Besiktas vs Fenerbahce. You see a ball and gol, you don't get the culture, and the importance this has for the cities. You don't get the importance of Rayo Vallecano representing the working class people or Atletico de Madrid representing the Spanish military, or Real Madrid representing those who are pro monarchy, or Barcelona representing Republicans.
@@jjj8317 What do you mean I don't get that football is not apart of my culture football, for one thing football originally was invented and originated in England not Spain secondly there is nothing cultural about kicking a ball playing football. Anyone is free to play football. Football is not a costume or cultural practice of a particular group of people, it is a simply a sport open to anyone of any background to play for fun whether it be with friends or family members so you sound so foolish and ignorant saying that football is not a part of my culture. As for your claim that I would not know where whereBilbao without looking at google you know nothing about me and to presume that I would not know where whereBilbao seemingly because of my racial origin is offensive. Your messages is so filled with ignorance, misconceptions that it is mind blowing? You really need to go out more and understand the world better before making these extremely ignorant statements.
You continue upping the on-line product!
It seems that Bayern is the only club that figured out how to do it...
Yeah rigging bundesliga lol
@@harukrentz435 Dortmund fan?
@@urint3902 I mean it is what it is. German football values are different. If Bayern were to win 9 out the next 10 season Germans would not care. They will enjoy their fight for 2nd and upholding their values. The Anglos are not the same. Always grasping.
I hope you can do a similar video for other sports like F1, MMA/UFC, Basketball, American Football, Cricket, Rugby and others. This is a great video.
Clubs lost their power when they all became greedy and gave in to player demands and salaries. A player weekly wage today equates to managers salry who's working a 9 to 5 job. Worse, in football, players get paid more than their managers. This is very unrealistic and unprofitable. I find it difficult to pitty them but at the same I understand that they are fighting a battle that they will never win. Even the oil money is not enough because the club still runs at a loss.
Which players are earning more than managers?
@@Avaricumstudios Mbappe gets paid 72mil EUR every year, that's way too much mate..
To add to this point, when he was contracted 630 million for 3 years, That's a $4,038,461 per WEEK, Dude this is weekly... It's absurd.
@@archidius one day, these clubs will implode and I will be the happiest to see that happen, and they will because as lots of people are no longer having children or enough of them, the fan base in the coming decades is going to start getting smaller and smaller
When big clubs like Barcelona go bankrupt or fans stop watching Soccer the whole house of cards will fall down.
Not to nitpick but it was 2013/2014 when they finished 7th so the season ended mid 2014 so wouldn’t necessarily account towards the 2013 revenue much because they won the title in 2012/13. That being said, it doesn’t really change any trend you mentioned, great video though!
I think it's insane that football player's salary is not capped.
I would say the reason for that is the fact that anything like that would have to come from UEFA itself. I guessing the leagues themselves are scared that if they put a salary cap in their league players would just go to another league that doesn't have a cap on it.
@@randomnerd2332 i agree so all the top5 leagues would have to do it together at once for the good of soccer but selfish mindset they all have so itll never happen, funny enough the super league had players salary cap listed
Great video. The only thing I don't agree with is that Barça fans were happy with signings. Everyone but the most diehard of diehards knew it was bad business and most didn't even make sense football wise. Barto, the previous Barça president, who made all those signings is almost universally hated by the fans.
Abidal, the director at the time made those signings
So the Super League is kind of like how the US does the MLS all stars and stuff, it’s just to make more money.
How do you “invest” in sneakers via an app? 🤔 Does Public by the shoes and hold them until you sell? I don’t get it. Sounds sketchy.
It is. More scam sponsors.
But these big clubs help smaller clubs make profit by taking players them so owning a smaller feeder club that buy players cheap and sell em to big clubs is good business model
Not really flipping player and the development model still a low margin and much riskier business model as not every prospect will pan out. They risk relegation far more than big clubs and unless a Arab prince or Elon own the club it’s very very hard to get close to the big clubs.
mate, barcelona's on-the-field product is "terrible"...theyve won the league this season...?
Oh boy, you jumped the gun on this video. Considering the spot Everton is in, you could really drive your point home so much harder. Heck, with them and Rangers a few years back, as well as the crazy spending of PSG you could really prove the point. Though I would say Wrexham is now an example of how there may actually be hope that there could be a better way of doing it.
Love the content, favorite part had to be when he misidentified scholesy as ryan giggs💀💀
I used to work in Mayfair, London at an oil company with my office just above the Manchester United London Corporate offices. 😊Fun times
sports organization are so inflated its actually hilarious. everybody is trying to flip for a higher price. players want a higher salary, owners want a higher price
As a fan of united, the only innovative sponsorship deal under the glazers is the training ground. Otherwise, most cluns are quite similar, and real madrid were more ground breaking with image rights, though as a public traded company its a lot clearer and its one of the 2 clubs that are a business in the pl, other maybe is Tottenham, what is a club that has leveraged its location and sponsorship and son to get good deals, though i know less about it. Though good essay
Become a developing club like what Udinese, now Brighton did is the way for football clubs especially mid table one. buying low price talent develop them and sell in 2-3 years to the highest bidder , cycle and repeat . This way when I took Everton in 2031 for my latest FM save, they have -250 millions their balance and 600m debt in total spread until 2042 and another 45m debt until 2057 for the stadium increase. Now in 2038 I have 300m in the balance, almost 2 billions in total player value and 110m debts remaining. Cutting the salary from 5m euro to below 3m is the first step. We need low salaries players that give almost the same performance maybe even better. then build on that, the classic problem for players that want high wages can be avoid just by selling them for profit and put the next talent in line to replace him so I can keep the salary stable The downside is it is hard to become title contenders but you can always become a black horse in every competition you participate
Great video. Sports are an unsustainable business because the men with the rare skills are able to extract economic rents basically all the value will accrue to the players who have the talent not the team owners who compete for a tiny pool of talent. It's simple economics
And that’s why football has failed…🙄
lol literally all american men sports are profitable because of salary caps so what on earth are you going on about
27:47 Why was 'Los' in Los Angeles covered up? In the bottom left of the screen on the black T shirt.
Digital ads = every pixel can be utilized and “personalized” to region 13:33 commercial revenues most predictable & recurring regardless of on-the-field performance but still need to be competitive and have an attractive product. Player compensation is the highest operating expense
sublime analysis, poised to objectively portray the nebulous and subjective sport
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17:00 I really don't see this as a bad thing at all, to stay at the top you gotta fight for it and invest smart, unlike in the american system
I think the takeaway is that broadcasting money, or the promise of it, ultimately has lead to overspending by certain clubs. A good follow up video might cover the inception of the Prem and the changes in spending it ultimately created. It's quite ironic that the (horrible) idea of a Super League, a closed league with promises of even MORE broadcast revenue, is considered to pay for these club's financial shortcomings. You know what, let them have it. Maybe if they get out of the real leagues, the rest of the clubs won't have to strain themselves so hard to keep up. I won't watch a single match.
The profitability in football clubs is in selling the football club for much more than it was bought. Look at how much the Glazers will get in profit for selling Manchester United despite not putting their own funds into the club and their leveraged buyout in 2005.
I'd love to see a video like this about Bundesliga teams
I genuinely don’t see what is the issue with foreigners investing in the Western world. It’s okay when it is the other way around right?
I don’t really care about Soccer but this was an excellent video that was very interesting and informative!
They should have a expense cap to make it more sustainable and even the playing field between top and minor teams.
F1 tried this but some teams have worked around it. I wonder if the wealthier football teams will also try to find loopholes in cost cap rules.
@@MarinaAli Don't bring my Max Verstapen into this 😅
That requires the other clubs to also commit to the salary cap. When the potential teams for a player cross national borders, there's no surefire way to actually enforce such an agreement.
@@ygaudreault This took me out 😹😹
Even the playing field? That's not what Salary caps are for they're used as a wealth transfer from players to owners by limiting labour costs If it makes it more competitive is a secondary achievement but not the reason its used
Babe wake up new modern mba just dropped
up north from italy to spain? have you looked at a map of europe? other than that - great video
It should be studied how Real Madrid is the biggest club in the world for decades, and runs on a positive net spend.
The only place left for football clubs to bring in more money is if the league's start streaming the games themselves cutting out broadcasters
Do one with Brighton hove Albion. Now that's a business cog running very well.
Awesome piece, man!
Absolutely amazing video.
No wonder Ronaldo went to Saudi Arabia.....maybe it was a deeper issue of salary affordability and breaking even as the performances were somewhat lackluster....
Bro for the owners, if the club remain at the top. It is worth more money to sell in the future. No one buys a football club to make profit on it on a yearly basis. You can take a small club,manage them well Scouut players for cheap, sell for profit like Ajax,Dortmund,brighton etc
Picking three of the most poorly run clubs, yes Barca is poorly managed by their socios, and claiming the entirety of the sport at their level is a lost cause is laughable at best.
This channel is from America, you know football is not popular in USA 😂
@@Yutup88 I’m from the US and worked for an MLS side though. It’s beyond absurd.
While they are money sinks to operate, it's worth noting that the capital appreciation on most professional sports teams has been huge. The New York Yankees, for instance, were bought for $8.8M in 1973 and are now worth $7.1B.
You picked the three worst clubs to make this analysis. Each of those has their own specific set of circumstances that aren’t really generalisable to the rest of the teams in Europe. United are owned by the Glasers, who bought the club with a loan borrowed against the value of the club, and many of the clubs revenues each season are siphoned off the service the loans. The club has paid its owners more than £1 billion since they bought the club WITH A LOAN in 2005. Other than that, the club is entirely financed by its revenues. This has only changed with the massive financial impact of the pandemic, and is slowly returning to the status quo. Juventus is owned by the richest family in Italy, the Agnellis, who own the Fiat Group. They operate in a less financially rich environment than the premier league, meaning that they don’t have to spend nearly as much to be successful. Poor recruitment has been their downfall and the reason for their lack of success, not money. Barcelona suffer from the same problem. Poor recruitment and bad investments have killed them. They sign players for hundreds of millions, and when the players don’t perform they lose all their value. In sum, it’s a very profitable business that has been affected by the pandemic. I’m not saying you did this maliciously, but you cherrypicked the worst examples of football clubs that fit what you’re trying to say. However, these clubs don’t represent the rest of the system, so you can’t make generalised claims about it based off them.
Also, Manchester United, Juventus, and Barcelona’s stadiums are full week in, week out. Stop expecting European fan behaviour to be the same as Americans. Our clubs have been in our cities for more than one hundred years, and will still be there long after we die. Unlike American ones that just pack up and leave when things get tough and when they don’t get the public money for their shiny new stadium or just see sport as an investment. Owners come and go. They are mere custodians of the club. They may own the assets, but they certainly don’t own the club. Stop seeing through that paradigm.
Would love to see breakdown like this down produced about the basketball Euroleague.
Excellent, excellent breakdown of football business.
Thanks for the video.
can you do a similar video about formula 1/motor sport