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Owning a football club is not lucrative. Rarely have clubs ever made a profit, they require huge sums of capital, and football fans are fickle and can turn on even the most supportive owner.
So why do it? Abhishek Raj explains explains the pros and cons of owning a football club. Craig Silcock illustrates.
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Tifo loves football. We create In-depth tactical, historical and geopolitical breakdowns of the beautiful game.
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#PremierLeague #EPL #Business
Owing a professional sports team is just a pissing contest for the mega billionaires!
Exactly, and the money they make by gambling in closed table bets is another way the billionaires pay to feel like deities
@@retiredrebel in other words, they buy football clubs solely because of their “God” Complex and…because they’re bored?
Or nation state owners!
Brighton has entered the chat 😉
Except for the Glazers who's main source of income is Man Utd💀
I think the biggest thing is running a successful football club can buy you what many billionaires cant buy, love and admiration. Think of the good press the haslams got in the MLS for buying and winning with the crew, or how leicester city owner became a legend for winning the prem. Or even on the smaller scale of the love that Brightons and Brentford owners get. Owning a football team can be passionate and provide a sense of meaning and purpose that not many other businesses do
The best example of this is Elton John. And it was even better because it was his boyhood club.
@@karlanthonymargate7362I think a better example is Roman Abramovich. Chelsea fans would die to get him back 😂
@@karlanthonymargate7362 the Hoffenheim owner Dietmar Hopp simply decided to make his 5th tier childhood club from a village of around two thousand into a big club. And well, he absolutely did, though their bundesliga stadium was built in the neighbouring town.
@@justanotherviewer1867I can go to war just to get him back if it was possible
Maybe if Russia didn’t feel the need to go to war then Roman would still own the club
Owning a football club can also lend the owners massive influence on the community's land prices and development opportunities.
I just wanna be someone that can say, "I played manager mode in real life"....
Had a debate with my dad about this very matter as he was of the opinion that football owners have loads of profit and I was saying not necessarily. Thanx Tifo for this one now I will show my old man
It could depend on whether the owner takes a cut from revenue before anything else is paid out, but that would be insanely unsustainable. The owner getting paid =/= the club getting paid.
Part of the reason some push the Super League or more guaranteed Champions League spots - gotta try to find a way to try and find some sustainable revenue/profit.
@@CCNYMacGuyThe other part is wages and transfer fees are part of what necessitates commercialization and billionaire/nation state owners. We seriously need a wage cap across FIFA as part of the condition for 50+1 fan ownership.
But you need to consider that club value goes up at the same time. Losing 200 million over the course of a decade if your team goes up 1 billion in value in the same timeframe. Football is like Netflix or Spotify, not usually profitable, but the revenue makes it worth something.
Mate, you're from the generation that thinks a well presented KZhead video is gospel. Imagine how lost and lacking of any opinion you'd be without a smart phone. Listen to your old man, he's seen the world before mass media retardation took over.
Owning a club gives you easier access to local leaders, mayors, MPs of region etc. etc. It also provide you chance lead a community established around club, so even club is in negative, your other business can thrive enough to compensate.
Excellent.
Could you do a piece on pitch invaders? To me it feels like it has fallen out of fashion since the broadcasters will cut away but I read online that it has been a much more common occurence in the last years. Maybe there's other reasons I can't think of, would be an interesting discussion, I think.
Maybe the numbers were influenced by the fact COVID made no pitch invaders exists but idk what the numbers look like
the only reason I could think of is that people can post it on social medias and gain followers
Same goes for all sports teams. Not a single one was set up originally in order to make money, they're just people that wanted to play for fun that has since become commercially marketable.
Got the new TIFO FOOTBALL book and I'll say it is immaculate. Something that Ghana football wont do
idk how taxes work in the UK, but in America you can reduce your taxes by filing for losses. Many owners are likely saving money elsewhere by losing it in Football.
Idk how taxes work in general tbh 😊
Has Tifo forgot to mention they are infact a massive tax dodge? Allowing team owners the ability to deduct the value of the team and assets from their tax liability, saving them hundreds of millions if not billions in the process.
Kramer-esque understanding of taxation
It's a write off, they write it off@@Ovenman940
I love when people say that donations or sports teams are tax dodges. They aren’t keeping more money ! They still lose that money!
Enhanced public profile, sportswashing. That sort of thing.
Could you have a video that compares the profitability of football to other sports like tennis, basketball, rugby etc. It should be really long.
pretty sure Athletic Interest did that, not sure if Tifo would also do it since they try being their own thing (to the point of having some dissinteresting videos)
People are acting like there are only 20 football teams in this country. We have so many teams in the football league and below. Take Scunthorpe United for example, the current ownership there risked everything to save the club and they are making no money themselves, whilst giving up all their time to save the club after the actions of the previous owner. Many owners are good people, we can’t just hate on people generally. Everything needs to be taken on a case by case manner.
Question from a foreigner. Why are clubs like Scunthorpe not member owned? I mean, it makes no sense that one or a few individuals run a club that is a local concern. They average almost 4000 per game so 4000 members shouldn't be unreasonable and that's enough to run a professional club really. Of course given that the club maintain a balanced budget because the members are not there to cover financial losses.
Call it football crazy it or madness.
You need money to run and maintain the grounds and pay the staff. Every bit of effort is money and work. U need profit to maintain money flow.
What if future football fields got built inside sphere like gigantic screens that show fans watching the game from their homes & no need to stands or actual stadiums🤔
if anyone is interested Afc Wimbledon ownership membership is £20 Fisher fc in south east London is £20 And Clapton CFC in east London is £10 i heard 😊 How much are the Bundesliga teams to be a member?:)
Top teams(and schalke) are around 50-60€, younger people usually way less. For 3 league and above prices can fluctuate depending on what the club offers, sometimes its 30, sometimes even 60
@@kaan4040 thank you for knowledge there
In Sweden about £20 to £50. All clubs at least 51% member owned.
@@nummer3357 thank you for the knowledge i don’t have a Swedish team i should pick one :)
Footballers are like artwork or rare gems. You can put any price you want on those items because it is like an auction. If a player is bought from Latin America into Europe then sold on later to England, you have swapped 3 currencies…the price can vary widely and how to tell if the money transferred was earned legally or not when you are dealing with multiple jurisdictions. A player normally valued at 25 million for most clubs, could be bought at 100 and no one can say anything because all the buyer has to say is they had to pay the high release clause because the club didn’t want to sell. This can be used by agents and clubs to launder money.
With the latest developments about a possible European super league could you do a video on the implications on domestic football throughout Europe if it ends up happening
Coffee and tifo, I love a good life 🤩
Running a football club has incredibly high business expenses that will allow the owners to basically pay a lot lower tax , maybe even zero
The prestige of owning a club especially a big one plays a huge part I guess
Great job
MLS owners seem to be pretty happy, especially owners who bought in early.
In RSA it's done to destroy careers and history of the clubs. Our laws here allow you to buy a top tier team, relocate and change names. If another interests you, you go buy it change it. If you from England and frustrated by clubs being purchased, you don't know the pain South African football lovers go through. A team like Bloemfontein Celtics can be sold to MaMkhize while she still owns Royal AM then change the name of Celtics and move it to Durban. Leaving passionate Bloemfontein Celtics fans stranded all thanks to the business and football laws in my country.
Morning coffee with a tifo video i was discussing this matter with myself lately and i was wondering what the owners gain in investing in football
Other than money?
The video says that an owner might entertain a potential or existing client by taking them to a game at their club. However the laws about this have recently become extremely restricted in the last five years in Europe and the UK. A ticket to a football match is considered a gift in kind above a nominal value and therefore legally you cannot gift football tickets to potential or existing clients as it’s a form of bribery. Most corporate hospitality now is used by a firm’s own employees or indeed paying members of the public. This is why clubs have recently started marketing hospitality packages to the public much more than they used to and why the price of hospitality tickets has fallen relative to match ticket prices. The new laws have limited this market.
Tifo upload to watch before work? Oh, go on then
Great insight ❤
I was looking for something like this for a whole while! Whatever reason you have to invest in a club, it can't be to make profit. Look at Dortmund, which are publically listed. Dortmund's stock lost 60(!) percent of its value since 2000, while the rest of the german index rose by 170%. It's insane.
Dortmund is owned by the supporters only 49% is owned by anyone else
@@cia5649 not true, the club only owns barely 5% of the clubs stock, however it has more than 50% of the voting rights, due to Bundesliga regulations.
@@blair9659 basically the same
@@cia5649 No, it's not the same. 95% of all dividends go to these investors.
Football is a super difficult business to make profit. You are either massively successful & popular like Real Madrid & Bayern Munich or you're just another Derby County. I wonder how US made sports such a great business model despite smaller fan base?
Closed systems (no relegation) plus a "socialised" model - where the worst performing teams get first pick of the next generation of players.
By over-commercializing everything. They also have a large fan base (any sport except “soccer” at least) and no peril of relegation because it does not exist. Also, they tend to have huge stadiums. Even college baseball teams (kinda like 2nd or 3rd tier level in the pyramid) sometimes regularly sell out their over 50000 capacity stadiums. I’m sure there’s more but those are the cliff notes.
US sports have caps on everything. More profits for owners
@@defend4everthere’s a running joke with the dodgers where they spend so much on good players only to crash in the first round.
@@defend4everthere is no salary cap in MLB and the NBA has a soft salary cap. While the NFL has a hard cap, there are numerous book keeping tricks that teams use to spread individual contracts over years. About 20 years ago, teams would eventually hit a wall, but due to the revenue sharing rules with players and how much the broadcast revenue has been increasing, teams haven’t been in as much a bad place with dead cap space.
I'm sorry, but there is a stable stream of revenue for football clubs, at least in the UK: it's called match day ticket sales. It's what enabled these clubs to last over a century in their local communities. It's only the last 30-odd years, with the rise of broadcasting, that the money has fluctuated out of control and we've seen so many old clubs going under.
Tickets are always a stable stream of revenue but it's not going to be enough if you want to keep up with other clubs in this ridiculous transfer fees.
@@LeGoat-23 which is my point. The rise in importance of TV revenue has not only priced real fans out of the game, it's also fuelled ridiculous transfer fees, player salaries and agent's fees as well. Trying to keep up with that is what's made so many clubs that were otherwise stable and solvent for over a century go under. The TV has been both a boon and a curse.
Yeah, they said that. "Match day income is structurally limited."
They aren't stable. If you are in europe or go far in the cups you will sell more tickets in a season than if not.
Different reasons depending what they are after, the owners of psg,man city and newcastle have completely different objectives to the owners of Liverpool and man utd who have different objectives to those wanting to be president of real madrid or barcelona. Some want to legitimise themselves,others want profit,others want the kudos of being ' the man'
Like Abramovich wanted to be that guy
@@alexanderomucheyi18572 ucl and league titles. He is the guy
Tell me 🤡 where is Chelsea current owner stand in your narrative
Nothing? Thought so
Intresting take!
Can someone elaborate on point 3 - Commercial potential remains untapped. I thought commercial revenue is one of the major revenue streams for football clubs.
The idea is that you could explore the image of these clubs to make even more money, as in having a super league where your club always plays a lot of games no matter what, like in the US. The new format of the champions league is said to have been created to tackle exactly this point with more matches between big clubs and therefore more revenue.
It stands to reason that football could make even more money if they increase outlets of revenue from matches played. That's why the Super League is still an idea, the UCL has adapted a Swiss-format to increase the amount of games played, clubs and even leagues looking to expand in the US market with the potential of hosting the UCL final in the city that bids the highest, the new FIFA Club World Cup happening in 2025, and so on. Even with the stadiums that clubs have could be used for much more than just football matches, this is why the Bernabeu and New White Hart Lane are aiming to host NFL games, concerts and anything else that they could maximise commercial gains.
Untapped commercial potential also means having time-outs, or placing on-screen advertisments, while the game is played. In essence, turning football into American football, where you watch 40 minutes of actual sport, over a 3 hour time frame. (Instead of 60 minutes over 2 hours.)
so more than 90% of pro football teams lose money every year? how do they stay afloat? so surprised that teams like brighton/southampton weren’t mentioned, i thought they’d be very profitable
Whole ecosystem is reliant on debt. Debt is not anything new to billionarires and businessmen as well.
That is only true where the norm is that a football club is kept afloat by a sugardaddy owner. It is however entirely possible to run a professional football club in a sustainable way. Because a club doesn't actually need 10 pristine pitches, a Footbonaut and player lodging at the training ground, academy players earning fortunes and dedicated right fullback scouts on all continents.
@@nummer3357so the 90% below top league. They dont matter.
Most don’t run at a lose only clubs with wealthy owners does well that and Barcelona but that’s because miss management if we look at clubs at less prestigious league like Sweden and Denmark they can fill 40k stadiums with locals and of course then we have the Madrid’s and Bayern who source from academy’s/league talent
9 seconds, probably the earliest I have been
Same
You can get tablets to help you with that.
Fan ownership and salary caps are a must
I think owning a football club would be call but I'd never be in that position or do it if I was because of morals etc.
🤡
"The revenue that comes from European competitions is paramount." Paramount PLUS amirite? I'll see myself out
Liverbol was bought for cheap and now it cost pi Manchester united also now cost a pil But even they concider , i say its provitable if u have the cash with the p litter
Ego, prestige, passion projects not to make money from unless your surname is Glazer then its to take a legendary club lumber it with debt with outdated facilities, a stadium in disrepair and more debt than when you bought it 15 years later.
This season is all about winning at 4 RABAT. With so many ways to earn points, it feels like every match is a victory!
@tifofootball I want to play and own a team when I'm much older. This video has stated interesting facts but also demoralized me by 10%.
Lower league teams are not profitable ,losing more only adds to losses
prob same like any others, increase its stock value and sell it later
Football has a broken business model. The NBA and NFL print money for owners and it keeps going up.
Your first reason seems to be why Knighthead bought Birmingham City. This works best with big city, big potential catchment area clubs. But another reason for some might be to load a club with lots of debt to earn yourself a fortune in high interest loans.
Haha that sounds like the t**t owner that we have at West Brom.
Yeah I joined 4RABT last week and the points are crazy good bought some cool stuff from the 4ra shop already
Video starts 4:20
Its not expensive to own Manchester United. You buy it for loaned money while making sure to weight it down by new debts. Also take money out of the club to transfer to your american football team while never adding anything into the club yourself. Make sure sponsors and fans are the ones who help you buy new players and dont forget to NEVER EVER do anything for the community around the club or upgrading the stadium. There you go, now you have a blueprint on how to own a club without it being expensive. BOOM, F%%#¤ Glazers
Whining
You can also take a pretty healthy salary out of it while you run the place.
PSG and Newcastle: 👁👄👁
I know there’s FFP in Europe. It sounds like they need some American thinking with a Salary Cap. If wages are capped, it forces spending limits on all clubs. You would need a. Salary floor as well. This would allow more cost certainty.
For sport washing
Do you include sports washing under “brand”?
Good video, but I have some comments. 1. I know this video wouldn't make an accusation like that, but it's pretty clear that some club at some point was bought for money laundering. 2. I disagree that the prices are going up. The max price may be, but the average for an average player is going down. Under competent leadership, it's good business to sell Tonali for 80MM and sign 2 good players for 20MM each. 3. It would have been nice to add to this video horrible cases like Valencia and Malaga.
revenue growth opportunities? barcelona are the best at it. they sell grass of camp nou
idk for sure but at least in american sports the owners make money when they sell as the teams value is always going up. Mark cuban comes to mind bought a team for 300 million and sold it for 3.8 billion
Football is not a business. And money has gotten out of hand, with prices nowadays. Perhaps there should be unions within the the sport, that negotiate fair wages and prices. But then again, that opens the door for even more politics within the sport
are those accounting losses or actual losses?
This is why we've seen more and more state or corporate owned clubs (like Man City or the Redbull teams), they're much more valuable as propaganda and marketing tools than viable independent businesses.
That clip at 5:02 of Jerry Rice and my Niners winning the Super Bowl back in the 80s; respect to you, Tifo
I always wondered 😂❤
The Glazer family purchased Man Utd because they will introduce a franchise system in the UK. The will have a closed system so they will guarantee profits each year. The objective is to stop smaller clubs from entering their Super League. Just like the boring NFL, the football league in the UK will become a closed boring system.
Megalomaniac types sometimes purchase clubs to avoid, for example, getting poisoned by your own home government, staying in the public eye.
American sports have commercial timeouts and stoppages in play. The NBA has 48 minutes of play but the matches last for 2.5 hours, most of it being commercials. Similar numbers for the NFL. Personally I wouldn't mind Picture in picture ads when there's a stoppage in play (like they did in the womens world cup) for injuries etc, but I'd riot if they introduced stoppages just for commercials. They already tried the "introduce a stop clock to stop time wasting" excuse but people didn't bite
Feels like I wrote this comment! 😂 NFL is worse: they condense ALL games (including replays) to 40 minutes ("Games in 40")! These games take ~3+ hours from start to finish!
Yes but the game doesn’t take 2 hours because of commercials. If there were no commercials you would literally be just watching the players sitting on the bench or whatever game break entertainment they choose to show.
WOW. This video is literally the answer to my comment about profitability on the past video. 👌 So, why don't european football leagues apply the US model of player salary caps to control wages?
A recent youtuber answer it. Big players would collapse.
@@eavyeavy2864 Where will they go? They have to play somewhere..
Exactly, Glazers out!
Glazers need a window of opportunity.
I don't think tifo is more football channel than football basic, it is more about football financing more
Cause it’s a dream and you can make good money if you’re smart enough
I would Def have a club given the chance
for the same reason i own an eafc ultimate team. for the pleasure. the passion. the yams. the sweet sweet yams.
Idk lol the profit of major sports teams have been going up way higher then typical investment rates, 400 % over a couple decades is very good
do you have a source for that ?
@@ll01dm I can find sources for you, basically this video broke them down as a business but didn't mention the investment portion. These clubs are bought them sold for multiple times what the owners paid for them, look up sales of major sports teams in the past decade. Some clubs and teams have increased valuations of over a billion in some cases
North American sports teams don’t usually lose money like European football clubs do. We don’t have transfer fees
It's more commercially set up as a capitalist enterprise. Restricted wages(mostly), Teams can move to a more advantage city if needed, low Transfer fees, and a self contained league where if you perform poorly you are not hit with major losses in revenue. More sustainable for investors sure, but to me it loses some of the essence of the sport, without local pride & the risk of relegation looming. Though having said that; it's rare to have any players actually from the towns and cities the clubs are based in, so whether or not it has too much about local pride anymore (at least from a homegrown perspective).
@@thehearingaid well said by you. I think there are advantages and disadvantages to both. I’m a fan of the NHL and MLB but I follow the Prem. I like aspects of football but I do find it frustrating that the same teams are in the top 4 pretty much every year. I do think relegation would be good in the MLB and NHL to eliminate teams tanking to get the first overall pick.
@@mikemurphy8996 yeah also didn't mean my comment as a slight against the MLS, as you say they do have pros and cons and a pro is if the MLS was to introduce tiers they could still set it up so clubs can be financially stable. And your right the other issue is generally money dominates the league so it is the same teams competing, with the odd exception. There are potential ways to create better stability and competition but hard to implement in the prem as the floodgates have been open for a while regarding spending.
Because it's the easyest way to do a lot of money laundry, you can always track for Oligarchs, Politicians, Oil families...And on top of that, you got prestige and admiration. Easy win-win situation
❓I wonder if stadiums would die soon like malls❓🙄
Supporter owned clubs (50+1 rule) and true enforcement of FFP rules (with country owned clubs FFP rules are meaningless as they will not bee enforceable) is the only sustainable way for football to remain the culture phenomenon it is everything else will turn football into a entertainment industry like any other.
Sportswashing is also another obvious incentive
what about money laundering? is it possible with football club and does it have advantages over other businesses ?
Please bring back sensible transfers and do bayern
Why? Because it’s the ultimate flex
There is money to be made Assuming all your investments are done as a loan, look at Chelsea and Man U. The money would have 10x over a period of 1 decades is nearly 20% return a year No other asset is giving you that.
What if the big clubs owned betting companies and thats why we see some shocking results
Simple Fsg bought liverpool less than 300mi pounds Now the value 10x more than they paid for on paper With rising stardom of liverpool, value going to increase furthermore
COYS Daniel Levy is at the wheel baby
COYS
I'm gonna spin every day on 4rab love the thrill of the IPL rewards platform and dreaming big to win big let's go IPL
Roy Kent voice: Money
This is a very good video
really? what did you like most about it?
Money and more money !
And the biggest reason to own a team , is to make profit from betting while arranging your own team to lost)
What is this all about what is IPL REWARDS PLATFORM I wanna know more sounds like a win-win with all these IPL Lottery chances too
It SHOULD be for the love of the game. Football belongs to the people.
And no one is doing it for money laundering 🤧
Imagine owners decide to start paying professional athletes way more less money. They will say we bring you the views but if Messi was offered 8 million a season or even less I’m sure he will still play if that was his only option. 8 million is 8 million for playing a sport.
what kind of yield we talkin here
Europoors passion about club model is blindly unaccepting salary cap model
I’ll own my favorite club one day I don’t care. Mark my words !! I’ll be a cool story to tell in the future
can you buy a football club and play on the team ? is that possible ?
Ofcourse it's your club
Money, to make a good reputation
Ask the Glazers. Holding onto Manchester United like grim death, which at their age, is not too far off for them i might add.