Research project - The Global Football Industry

This paper tries to analyze the football
industry by looking at a few significant factors
that define an industry

RESEARCH PROJECT

A Study of the Global Football
Industry

Submitted by: Siddharth Ravishankar

Under the Guidance of: Prof Bhanu Ranjan

A Study of the Global Football Industry 2

Table of Contents

Introduction............................................................................................. 4
Literature Review ..................................................................................... 4
History..................................................................................................... 6
Demographics .......................................................................................... 8
Industry Leaders .................................................................................... 10
Industry Financials ................................................................................ 13
Technology and Football – Data Analytics............................................... 15
The impact of the FIFA World Cup ......................................................... 16
Football Brands ..................................................................................... 19
Recent Trends ........................................................................................ 21
Potential Pitfalls ..................................................................................... 23
Conclusion ............................................................................................ 25
References ............................................................................................. 26


Introduction
In today's economic climate, the sports industry is one of the fastest
growing industries in the world. This is clearly evident by various countries
looking at opportunities to tap this emerging market since they now realize
the potential of this industry. The football industry is a major industry
within the sports industry and is one of the most multi faceted industries
cutting across various countries; developed and under developed,
established and emerging economies, small countries and super powers. It
is one of the major revenue generating industries in terms of a growing
viewership, and a growing fan base that contributes not only to increased
sales from match and event attendance but also increased sales from sale of
merchandise and other associated products.

Literature Review
A certain football fan once said, “Advertising with football media is
simple math; for every penny you spend, you make twice that much!”
Football in the New Media Age analyzes the impact of media on the football
industry. Raymond Boyle and Richard Haynes first published this book in
2004 and it virtually took the football industry and the media by storm. This
book talks about the growing relationship between football and the media
and helps us to identify the extent of evolution of this relationship. Football
today is often seen as a cultural form, as an industry, as a business and
most importantly as a media product. Football in this new media age almost
appears omnipresent.
The book talks about the way the football industry is perceived by the
media industry. Every news related to the game, be it the weekly news, the
high profile transfers, the misdemeanors involving young, wealthy
professional football stars merged with their poor behavior on the pitch
somehow finds it way to the front page of the newspapers, social networking
websites and digital media forums. This book explains the highly volatile
relationship between football and some aspects of the media industry during
a time of change in both sectors.


The opening chapter presents a historical overview of the relationship
between football and the television media in the United Kingdom. David Hill,
BSkyB‟s then Head of Sport in1992 said, “Here [in Britain] it‟s football first,
second and third.” Football has always been the number one game in the
United Kingdom and the media has also had a significant role to play in
keeping the game at its number one status. Going from the pre-internet era
in the early 1990s to the late 1990s and the early part of the new
millennium, the media industry has changed and in fact grown by leaps and
bounds. The digital revolution brought about a whole new dimension to the
way football was mapped. Television broadcasters now stood at the forefront
of what was the biggest revolution to come about in the United Kingdom.
Football was being viewed like never before, both inside the United Kingdom
and much more outside it. Match fixtures were now being scheduled not
based on the availability of players and convenience of the teams, but rather
on the viewership slots available on the television. This marked a crucial
stage in the relationship between football and the broadcasting industry
because it gave rise to the biggest factor in this new media age,
Commercials.
The easy accessibility of viewership and the increasing importance of
players image rights now turned around the very meaning of advertising and
commercials. Players with a certain star power and influence pretty much
dictated the trends in the digital environment. Football clubs were not far
behind and they took off from this queue and exploited the digital media to
foray into newer markets and develop new business opportunities that the
digital media offered. Clubs began branding themselves around certain
iconic players; in the way Liverpool Football Club and Manchester United
Football Club entered the Asian market on the backs of the growing
popularity of their marquee players such as Steven Gerrard and David
Beckham respectively (www.liverpoolfc.comand www.manutd.com). Clubs
the world over seem to have realized the advantage of cashing in on the
celebrity status of their star players.
Football clubs have extended their control over the game by setting up


their own media companies to exploit the rights they hold. Clubs like
Chelsea, Barcelona, Real Madrid, Manchester United and many others, now
own their own media companies where they broadcast their live matches
amongst many other telecasts such as first team matches and junior
championships. Authors Boyle and Haynes, believe that at the core of this
process is the emerging relationship between traditional notions that have
seen football mediated primarily within a national broadcasting culture, and
the potentially global communicative system of the Internet as a means of
creating a larger, more disparate footballing community and globalizing the
local appeal of particular football clubs.
The authors talk the growing globalization of the game and the role
Internet has to play in major events. With major global events like the World
Cup, the European Championships and the highly popular and widely
broadcasted UEFA Champions League in addition to the various national
leagues being telecasted now, the role of the digital media is only bound to
grow stronger. A closer examination reveals the role and impact of
interactivity – one of the distinctive features of digital technology – on
football fans. Today, with the advent of digital media, the fans have now
become the most impactful of all the factors affecting the success of a club
or for that matter a nation.
Football in the New Media Age is a book that‟s true to its name. It talks
about how the modern game has changed from what it used to be and how
the media has helped it become the global sport it is today. The football
industry has pretty much rode on the crucial findings of this book and used
the digital media to the greatest possible use to leverage itself. The football
industry has used the media to increase its reach and has now moved into
the world of social media as well. The book is a comprehensive guide on how
football has changed with its changing environment.

History
It‟s difficult to imagine a world without football. And a major reason
behind that is because football is today treated as more than just a mere


sport, it is often treated as a religion cutting across all strata of society. The
football industry today has grown from what used to be a past time sport to
one of the fastest growing industries in the world. Like a certain football fan
states, the fact that the churchIglesia Maradoniana was formed in the name
of Diego Armando Maradona, the legendary Argentinean striker, proves how
important football is in this age.
Although this sport is the most widely played and watched sport in
the world, its origins are not very clear. Some believe that the ancient
Greeks and Romans played football in the era Before Christ (BC) while
others believe that football found its origins in the Chinese military barracks
during the Han Dynasty in the 3rd century BC. A third section of society
believes that the Japanese first played a game called kemari, which is played
in a manner that is very close to how football is played
(http://www.fifa.com). However, the contemporary history of football spans
more than 100 years when the Football Association was formed in England
in 1863. This is considered as the birth of the modern game. From its
conception in 1863, the British soldiers played the game in their various
colonies all over the world and slowly introduced football to the world.
The Fédération Internationale de Football Association (FIFA) was
founded on 21st May 1904 in Paris to oversee the welfare of the game. The
game changed for the good when in 1930 FIFA President Jules Rimet's
dream was realized as Uruguay hosted the inaugural FIFA World Cup. With
a brief break for the World War II, football returned with such a force that it
created a worldwide storm with an increasing number of countries now
joining the FIFA to participate in various International events like the World
Cup, and the continental showdown events held every 4 years. By the end of
2011, 208 national associations were members of FIFA.
(http://www.fifa.com) The fact, that the United Nations has 193 member
nations highlights how popular the game is.


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Scotland

Football, today is not only looked as a sport but more so as an
industry. FIFA organizes events and tournaments in different countries
across the globe, which helps, revolutionize the national economy. Ask
South Korea how the World Cup in 2002 changed their outlook towards
infrastructure and a better standard of living. The kind of income brought in
by the sponsors, tourists and the very game itself is a major reason why
countries today plan their infrastructure and growth around these very
events. Also, football has the muscle power in terms of the revenues it
generates from ticket sales, merchandize sales, sponsorship deals, etc.
Football has also extended its realms beyond just the game
The future of the football industry definitely looks bright, and with the
European Championships to be contested in Ukraine and Poland in June
this year, this could very well another milestone in the history of the football
industry.

Demographics
The football industry sees a growing popularity among todays
generation. In fact, many legends of the game like Pele and Maradona have
spoken about the growing popularity of the game as compared to what it is
was during their days. And one primary reason behind this is that football


has become more commercialized today thereby being able to attract a wider
range of „football fans‟ that was not existent previously.
The football industry covers wide aspects of the game from the stadia
attendances, to purchase of national / club loyal merchandizing and also
sponsorship & advertising through football stars and teams. For example,
Manchester United FC has signed a deal with Turkish Airlines as the official
airways of the first team and with DHL who are the Club's Official Logistics
Partner (Manutd.com - The Offical Website). Many researches have been
carried out trying to identify the demographics of "football fans" and one
such leading research has been conducted by Sportfive GmbH & Co with
regard to the football fan‟s attitude to football, interest in certain events,
stadium visits, media use and attitudes to sponsorship, brand purchases,
etc. (SPORTFIVE GmbH & Co. KG, June 2009). Since, the purchasers of
footballing merchandize and visitors to stadiums are primarily people
interested in football, we shall call them “football fans” from hereon.
When we look at the basic demography of football fans we can simply
look at them as male fans & female fans. Why do men or women start
watching or playing football? Male fans love to play football. Football is also
a bonding experience for fathers and sons. When male football fans were
younger, they probably spent hours watching football games with their
Demographics-
father. From playing the game at a younger age, they start watching the
game, as they grow old. Many female fans on the other hand also love the
game, but most started watching football because a cute player caught their
eye or probably became interested after watching a game with a boyfriend or
their husband. (Brantley, 2006)
Football-–-The-Sport-
We can also look at football fans Passive'
from a non-sexist angle. We can call Fans'
them casual fans; those who are Casual' Die'Hard'
Fans' Fans'
interested in football but don‟t watch
every week, passive fans; those who Football'
watch an occasional match but are not Fans'

A Study of the Global Football Industry Male-/- 9
Female-
International-
18@28-yrs- Level--

Passive'
Fans'
Casual' Die'Hard'
really that interested and then the die hard football fans. These are the
Fans' Fans'
major contributors to the economy of the game. These are the people who
watch the game regularly on TV or in the stadium, buy footballing
merchandize, collect footballing memorabilia and alsoFootball' spend more
tend to
Fans'
on sports and in specific football accessories as compared to the general
public.

There is also a stark distinction
between fans who watch football at the Male-/-
Female-
International-
international level and those that watch
18@28-yrs- Level--
the game at the club level. Those who
prefer club football to the international
game are far more likely to be male than
female and are most commonly aged 16- Male,-16@34-
34, upscale socio-economically, better off Club-Level- yrs-
financially, non-readers of newspapers
and viewers of satellite TV. While those
who prefer international football to club football, are as likely to be female as
to be male, are younger, less affluent and lower-level viewers of satellite TV
than their club-fan counterparts, but are also upscale socio-economically
and prefer broadsheet newspapers. This is quite evident during major
tournaments such as Euro 2012 currently going on. (King, 2010)

Industry Leaders
There are many reasons behind the meteoric rise of the football
industry. The teams, the players, the managers, the fans, the sponsors, the
broadcasters; all of the above have contributed immensely to get this game
to the pedestal and the popularity it enjoys today. However, if we had to
consider 3 leading factors behind this rise, we could narrow down to the
players, the managers and the teams.


When we speak about football teams
that have led this whole revolution and
probably helped popularized the sport to the
greatest extent, the first name that comes to
mind is the Brazilian national football team.
Brazil and football go hand in hand, pretty
much like how Germany and Beer are related;
they are synonymous of each other. Right
from the inception of the FIFA World Cup way
back in 1930, Brazil has played a dominant
role in world football giving us many great
players like Pele, Romario, Ronaldo, Zico and many others. The Brazilian
football team almost always rises up to the occasion at major events and
has never dropped out of the Top 10 rankings in World Football. It has truly
been a leader in every sense of the word and the fact that they have never
failed to qualify for the Football World Cup or their 5 World Cup victories is
still an unmatched feat. (Confederação Brasileira de Futebol)
One of the biggest and probably
the most influential reasons behind
the success and failure of teams are
the managers. The manager is the
modern day coach, mentor, strategist,
analyst and the master planner. A
shrewd manager most often makes
the right decisions in pressure
situations with regard to game plans,
player transfers, player management
and team policies and Sir Alex Fergusson is probably one of the all time
greats. Sir Alex has been in charge of the most successful English Football
Club in Manchester United for over twenty-five years now and continues to
be heading for a few more years at the helm. He has won every trophy and
every championship that can be won at club level and has truly set a new


benchmark for future managers. “His hunger is an example for every young
manager”, is what Arsene Wenger, manager of the current Arsenal FC had to
say about Sir Alex and his hunger for success. (Premier League, 2012)
History will remember him not just as Britain's finest football manager, but
surely the best the world has ever seen (Wilson, 2011)
Finally, the most important factor to have affected the success and
popularity of the modern game is the player. And no player has quite set the
stage on fire like a certain David Beckham. David Beckham has redefined
the modern day sports professional. He has single handedly manage to
popularize the game like none of his predecessors (Milligan, 2004).

Even though he might not be as gifted as Zenedine Zidane, Lionel Messi or


Cristiano Ronaldo, he has taken the game to newer pastures such as South
East Asia and the Americas. He is by far the most marketable face in the
entire sports industry and makes millions of dollars every year only by the
sponsorship and advertising deals he signs. He has also paved the way for
future sports professionals to build a successful career in the modeling
industry as well. As the face of Adidas AG, he has created new means for
sports companies to market themselves. “The brand is exceptional and the
potential is enormous. No other sportsman or woman has the brand placing or
personality of Beckham.”(Williamson, 2002)

True leaders leave a mark, and all three of the above sure have done
that. They have set new benchmarks for their successors who will need to
strive that much extra to achieve what they have.

Industry Financials
The football industry worldwide generates billions of dollars in
revenue. The FIFA World Cup, EURO Championships, UEFA Champions
league, English Premier League, Spanish League and Italian football league
are huge money earners for world football industry. Broadcasting rights,
player transfer fees, endorsements, footballers‟ earnings and product
manufacturers‟ earnings add to total turnover of global football industry.
When we talk about the football
industry there is one organization
that stands out from the rest, the
organization that runs the game on
this planet; Fédération Internationale
de Football Association or what we
also know as FIFA. FIFA is the world
governing body for football and is responsible for every aspect related to
football in this world today, be it the major championships like the World
Cups, improving footballing infrastructure in the developing and the under –
developed countries or the various social activities such as child welfare and


education that it supports.
When we talk about the financial solidity of FIFA, it comes across as
an organization standing on rock solid foundations. Year on year FIFA has
always generated revenues in excess of the previous year. Since, they spend
on an average approximately 75% of the revenue they generate back into the
game in terms of investment, profits vary. In spite of the turbulent financial
markets and the global financial crisis, FIFA generated revenue of $1,070
million in the year 2011. This comprised majorly of revenue attributable to
the sale of television rights, marketing rights, hospitality rights and licensing
rights. The various components of their income are as below.

Income Breakup
Television Rights
3% 2%
3% 5% Marketing Rights

Hospitality & Quality Rights

Licensing & Brand Rights
51%
36%
Foreign Currency Gains

Others

When we look at their expenses, what is very evident is the amount
the amount they spend on event related activities which forms a major part
of their expenses along with development related activities. The various
components of their expenses are as below.


Expenses Breakup
3% Football Governance

5%
Event related expenses
17%
Development related
expenses
Other Operating
18% Expenses
57% Exploitation of rights &
Financial Expenses

Other than these major financial figures, the other important figure is the
amount of reserves that FIFA maintains. The figure stood at an impressive $
1,293 million. Joseph S Blatter, the current President of FIFA once said,
“Football is an industry that will always have money because it is the one
industry where people pay money and go back contented always wanting to
come back and spend more!”

Technology and Football – Data Analytics
The Moneyball philosophy is the first official instance where data
analytics was used in sports. With data analysis we can find ways to make
sense of data and transforming this into actionable insights and knowledge.
Oakland Athletic's general manager Billy Beane used a set of
underestimated statistics that he then used to find undervalued baseball
players in the transfer market. The football equivalent to Moneyball is called
Soccernomics and the philosophy of using Soccernomics is the analysis of a
similar set of numbers used to give football teams a competitive edge.
Although data analysis has been used extensively in American sports
leagues such as the Major League Baseball (MLB) and the National
Basketball Association (NBA) for a long time now, the concept has started to
catch on to modern day football managers and the likes. Soon those days


where scouts used to identify upcoming talent for clubs to sign will be
replaced with more data analysis owing to increasing player wages and
transfer signings.
Damien Comolli, during his time at Arsenal with Arsêne Wenger first
experienced the effects of Soccernomics. He successfully managed to
implement Soccernomics during his stint as Liverpool's Director of Football,
when he used data analytics to sign the Spanish left back José Enrique
when he lost out on Gaël Clichy. Enrique proved to be a shrewd buy; he had
one of the highest pass completions and entries into the final third and
could also be credited with initiating many attacks from Newcastle United‟s
left flank. Bolton Football Club‟s style is the most rudimentary example of
Soccernomics on a football pitch. Sam Allardyce was an expert on analytics
and used them effectively at Bolton to sign players well past their prime but
who still proved to be highly effective on the field. Very few of the players he
signed failed to have an impact at Bolton. (Stavins, 2012) With websites and
online tools, fans and fantasy league participants can evaluate the trend and
pattern of their favorite teams and players. (Burke, Donovan, O'Brien,
Simmons, & Van Gundy, 2009)

The impact of the FIFA World Cup
Pick your favorite cliché: Brazilian
flair, Argentine indiscipline; German
efficiency, Portuguese petulance; Italian
cynicism, English grit, Dutch technique,
Spanish gusto, Cameroonian naivety or
even North Korean inscrutability. The
World Cup is where all these nations and
many others fight it out for the grandest
prize in sporting history, the FIFA World
Cup. (Euromonitor International, 2010)
Football in many ways is like an
international language in itself. I‟ve had


many conversations with Europeans and Asians alike that begin and end
with football.
Football fans often joke that they would sell their kidney to see their
side win, well research has shown that this joke may not be funny after all,
rather it may very well be the truth. A survey conducted by financial
services group ING in Portugal found that the average consumer would
willingly contribute US$450 in exchange for victory. (Euromonitor
International, 2010) While this may sound weird the fact remains that the
FIFA World Cup is the biggest sporting spectacle in the world and one that
drives consumer spending like no other event. The World Cup boosts the
economies of all the countries participating in the event especially the host
nation or nations, as is it recent trend. The Centre for Economics and
Business Research estimated that the 2006 FIFA World Cup in Germany
resulted in a global economic uplift of some $35 billion. (Euromonitor
International, 2006)
Major consumer product sectors that benefit from the World Cup are:
tourism, hotels, restaurants and catering (also called horeca), beer, wine,
soft drinks, snacks, football shirts, flags, flat screen TVs, mobile phone
usage, novelties and gambling. (Euromonitor International, 2010)The World
Cup also generates employment, which further helps boost the national
income. The tourists who visit the FIFA World Cup far outnumber those that
visit the Olympic Games by a ratio of 2:1. Tourist spending is also a major
driving force of economic growth. Further studies have also confirmed that
major sporting events such as the World Cup boosts the profile and
reputation of the host nation ensuring a resurgence of consumer spending.
While the host nation does benefit from the improved standard of living
owing to better infrastructure and a boost in economy, major industries
such as mobile, beverages, tourism, retail and apparel gambling etc receive
a major boost in the wake of the World Cup not only in the host nation but
in the participating and viewing nations as well.
The mobile industry gains with an increased number of subscribers
that get connected to mobile TV services especially during the event,


irrespective of the nation they are in.
Probably the major FMCG beneficiary of the World Cup is beer. With a
usually high number of beer drinking nations in the final 32, sales of beer
always increase during the World Cup. Beer is the de facto drink of choice of
the largely male audience.
The tourism industry is generally the most massively affected industry
amongst all others during major sporting spectacles such as the World Cup.
Increased hotel rooms, restaurant sales, consumer spending all contribute
to a boost to the tourism industry.
Events such as the world cup are the apotheosis of sports branding.
(Euromonitor International, 2006) The major sports apparel brands in the
world be it Nike, Adidas, Pume, Umbro all benefit from increased sales of
national team merchandize. The longer the national team stays in the
tournament, the greater the sales. Puma benefited greatly from the World
Cup 2006, which Italy won. Puma being the principal manufacturer of Italy‟s
national team jersey gained much more after Italy won the tournament than
during it.
The dark side of the FIFA World Cups is gambling. Gambling always
raises its ugly head during these events and it is practically impossible to
drive it out. Hundreds of millions of dollars are wagered on everything from
who will win to who scores the first goal and how many yellow cards there
will be in a game (Euromonitor International, 2006)
Football is without a doubt the most popular sport in the world and
even in countries where it is not the number one sport it is gaining in
popularity with every passing day. Countries such as India are termed as
„World Cup virgins‟ by marketers who see this as a great opportunity to
establish football‟s category leadership with the current generation.
While the FIFA World Cup has phenomenal economic gains there are
also substantial economic losses due to absenteeism. (Euromonitor
International, 2006) The difference in time zones between the host nations
and those where football is followed and viewed results in odd viewing
hours. Absenteeism results in an economic hit to the corporates, which


eventually affects the national income as well.

Football Brands
Footballers today transcend boundaries beyond the pitch, and into the real
world to become some of the most reliable brand names. Gone are the days
when footballers were superstars on the pitch and could lead their private
lives off it. Today, footballers are ever seen as much off the pitch as on the
pitch.

Three of the largest brands in world football today are Brand Beckham,
Brand Ronaldo and Brand Messi. Footballers now represent much more
than just their club or their nations. The war of brands has escalated from
the boardroom to the football pitch. With each footballer now being able to
influence much more than just the results of the game, companies have
entered into a race to sign the biggest brands.

Footballer
Brands

David Cristiano Lionel
Beckham Ronaldo Messi
Forbes List
Ranking – The
8 9 11
World‟s Highest
Paid Athletes
Net Worth $ 180M $ 120M $ 90M
Earnings $46M $42.5M $39M
Salary/Winnings: $9M $ 20.5M $ 20M
Endorsements: $37M $ 22M $ 19M
Age 37 27 25
Residence Beverly Hills, Castelldefels,
Madrid, Spain
CA Spain
Country of United
Portugal Argentina
Citizenship Kingdom


Agent Simon Fuller Luis Correia Guillermo Marin
Agency XIX Gestifute
-
Entertainment International
Source: Forbes 2011

When we talk about brands in football,
there are none bigger than Brand
Beckham. Who ever thought the little
kid from Leytonstone, London would go
on to redefine football. David Beckham,
a British national has had a glamorous
career playing for two of the biggest
clubs in world football in Manchester
United and Real Madrid before signing a
multi million deal with the Los Angeles
Galaxy of Major League Soccer and is today worth a whopping $180 million.
(Bornrich, 2012)The list of brands that Beckham endorses is a long one.
With the likes of Adidas, Gillette, Vodafone, Pepsi, Emporio Armani and the
recent additions of Burger King, Sainsbury's and Samsung Beckham rakes
in more than $37 million a year through endorsements.(Forbes, 2012)
Beckham also launched his own clothing collection called „Bodywear‟ in
2012 with H&M as a partner.

If Beckham is the king of footballing
brands, then Cristiano Ronaldo is definitely
heir to his throne. Born in Santo António,
Madeira, Portugal in a very modest family
Ronaldo was destined for greatness.
Ronaldo today commands one of the
highest salaries in football at about $20.5
million annually, including bonuses. While
this may seem staggering for some, the
icing on the cake is the fact that he earns


even more off the pitch, thanks to deals with Nike, Castrol, Coca Cola,
Konami and others. He is regarded as the most popular sporting face in the
world; with over 52 million Facebook fans; that's more than any other
athlete in the world. He once said, “"Maybe they hate me because I‟m too
good”, and it is probably this confidence of his that has garnered him so
many endorsements.

Lionel Messi is often regarded by many
as one of the greatest players to have
graced the sport. Although Argentinian
by birth he is often considered
Catalunyan by heart as is his greatest
achievements have come in the blue and
gold of Barcelona. Messi has graduated
from Barcelona‟s famous youth
academy, La Masia to one of the most
marketable faces in the world. With
record-breaking seasons year after year
he has gone to to endorse some of the biggest brands around. A three-time
FIFA Player of the Year, his biggest endorsement deal is with Adidas, but
Messi also has pacts with PepsiCo, Herbalife, EA Sports, Cherry, Audemars
Piguet, Dolce & Gabanna and many others. Messi is currently behind
Ronaldo in the race as the biggest footballing brands in the world but still
takes home a cool $39 million a year with about $19 million from
endorsements.

Recent Trends
The football industry has grown by leaps and bounds since its
inception way back in the nineteenth century. The game has single handedly
changed the sporting outlook of this planet, since it is the most popular
sport in the world played in more than 200 countries. That is more than the
number of countries that are a part of the United Nations. In recent times,
however the football industry has changed at a much faster rate than


before.
Leading organizations such as Plunkett Research, Ltd. have carried
out research surveys to analyze the industry trends and industry statistics
in the football industry. The latest and biggest trend to emerge in sports is
the merging of sports and entertainment. Sports today are looked at more
like the entertainment industry than a sport itself (Plunkett Research®,
Ltd.). With large and diverse companies entering the fray as owners of clubs,
sponsors of competitions, clubs and nations there is a new trend of pre-
season tournaments being held. For example, Venky‟s Chicken, an Indian
poultry giant took over Blackburn Rovers Football Club in 2011 and came to
India to play against local sides during their pre-season tours. (Venkys
Group) Such activities increase the visibility and support base for clubs all
over the world and add to their revenue through merchandize sales over the
longer run.
Another major trend is the globalization of football finally being put to
better use. There was never a doubt on football being the most popular sport
in the world. However, with the successful hosting of the FIFA World Cup in
South Africa in 2010 and recent announcement of the scheduling of the
FIFA World Cup in 2018 in Russia and 2022 in Qatar, there has been a
surge in the footballing infrastructures in this part of the world. Newer
stadia are being built and grass root level infrastructure is now being
invested in. People are now looking at football, as a possible career option
and there could soon be a shift of power in football from Europe and South
America to Africa and Asia. (Fédération Internationale de Football
Association (FIFA) - FIFA.com )
A rather dominant trend seen nowadays is the impact of celebrity
athletes on the popularity of football. Names like David Beckham and
Cristiano Ronaldo have become synonymous with the sport and have helped
open up newer markets for football in terms of revenues and popularity.
Manchester United penetrated into the Asian market on the back of David
Beckham‟s growing female fan base and helped Manchester United become
the most popular football club in Asia. Players towards the end of their


playing careers, shift bases to United States and Asia because clubs in these
markets offer them huge wage packets which, in turn help the club sell the
shirts that help them make their revenues.
Another critical trend is the influx of expatriate players (defined as "a
footballer playing outside of the country in which he grew up and from
which he departed following recruitment by a foreign club") (Jeremy, 2011)
Although it would seem that with the globalization of the game, there would
be an increase in the percentage in this number, contrary to our belief, this
number is actually decreasing. And the reason behind this is the growing
infrastructures in the countries where football is not fully developed as in
Europe or America. Asian and African players are now looking at playing
football professionally in their home nations as the feasibility and viability of
a footballing career now exists back home.

Potential Pitfalls
For being the most popular sport played on this planet it is rather
surprising that there are many pitfalls in the football industry. However,
what is rather not surprising is that a majority of these pitfalls are a result
of recent changes in the way the sport is being conducted, played and
managed.
The biggest challenge to football is for it to remain just a sport.
However, today the football industry is seen as one of the fastest growing
industries and as a result is being looked as a business rather than a sport.
Christian Nerlinger, the current Bayen Munich sporting director and a
famed former Bayern footballer of the early 90s is still unable to tell whether
money runs football or is the other way around (Saxena, 2012). The growing
globalization of the game and the way it is being perceived is rather
dangerous to the game and the industry as a whole. Football is not only
about money; there is whole lot of other elements that go into building a
great football team. Someone needs to tell that to Roman Abromovich the
owner of Chelsea Football Club and Sheikh Mansour bin Zayed bin Sultan
Al Nahyan the owner of Manchester City Football Club.


A major pitfall for the sport is that although football keeps getting
richer, it is the fans that ultimately pay for it. Football used to be great and
cheap to watch. Danny Kelly, a writer and broadcaster on TalkSport feels
that in the entire history of human commerce, no more efficient system for
siphoning cash from the pockets of the many straight into the man-bags of
the few has ever been invented (Kelly, 2012). Due to the mind shattering
sponsorship and broadcasting deals that happen these days, the fans have
to cough up huge sums of money to watch their favorite teams in action.
This money is primarily used to pay astronomical wages to the footballers
that seem to be more priceless than diamonds. I‟m sure De Beers could use
them in their advertisements. It is very difficult in todays‟ times to run a
successful football club wherein almost 80% of the clubs revenues are spent
in player wages. As a result football is soon becoming more inaccessible
from its very fans and supporters that made it the number 1 sport in the
world.
David Roberts, Corporate Partner at the international law firm
Olswang has conducted an in-depth research into the pitfalls in the football
industry titled The Changing Football series. In his series he talks in depth
about the corporate aspects of football. A very critical issue brought out is
the sustainability of the football industry looking at themes such as funding,
the challenges of club ownership as well as existing regulatory rules.
(Roberts, The Changing Football series (2) - Football in the UK: An
unsustainable industry? , 2012) With a great amount of the revenues of
football clubs, close to 80% in some cases being spent on player wages it is
becoming increasingly difficult for clubs to stay afloat (Roberts, The
Changing Football series - The UK football industry: A parallel universe,
2012). A larger number of clubs are showing signs of distress and and going
into „administration‟. Innovative business ideas such as ground sharing,
academy programs, salary caps and community ownership models should
be brought into the game take care of the increasing financial difficulties.
(Roberts, The Changing Football series - Groundshare: A Football Heresy?,
2012)


Another potential pitfall being seen is that the gulf in class between
the so-called richer teams and the teams that are built on a traditional
community based model. With an increasing amount of money being
pumped into the game, the smaller nations and clubs find themselves
constantly fighting more against the system, in terms the infrastructure and
ambitions of their predicament rather than against the opposing teams.
Also, football needs to be regulated by the governments to promote the sport
in the right spirit and bring the community closer together rather than
increase the bridge between teams and thereby between supporters. The
more connected the entire football fraternity remains, and that includes the
fans, the more the industry will grow in terms of increased revenues and
sales. (Roberts, The Changing Football series – Promotion / Relegation: A
Bridge Too Far?, 2012)
A major pitfall the entire football industry is currently facing is the
development of the game. While increasing amount of money is being spent
on player wages and player management, not enough is being spent into
developing the game in the under developed nations around the world. There
have been instances in India in recent times, where players have died on the
football field because there was no medical assistance available. The basic
infrastructure in such countries is still lacking while in other countries the
entire industry is rolling in money. Even though there have been significant
developments in the African nations, more needs to be done in terms of
developing the game in other countries.

Conclusion
The football industry is without a doubt one of the fastest growing
industries and inspite of its potential pitfalls it is an industry that will only
grow with time.. The industry is reaching the remote corners of the world
and more and more people are playing football today than ever before. Who
would have ever thought that we would one be watching a World Cup in
Qatar and Football is growing in stature in countries like India and
Australia where other sports take precedence over football and the day is


not far when we have football players like Sunil Chetri and clubs like Mohan
Bagan competing with the likes of Lionel Messi and Manchester United.

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