Economy
Posted: 1 month ago

Football Economy – International Tendency and Reality in Georgian Football

Football has stopped being only a sport. It has become an inseparable part of economy and business, where huge financial resources result in turnover. Today’s football represents a commercial activity, with a focus on bringing profits to the clubs and its stakeholders.

In the 1990s, for the purpose of receiving more financial benefits, football clubs started placing their shares on stock exchanges. The first clubs which held an IPO (Initial Public Offering), that is, became public companies, were Manchester United, Dortmund Borussia, Juventus and Arsenal.

Other football clubs also took their example and the so-called monetization process started in the football world. According to Deloitte and the Swiss Ramble, the world’s most expensive club is Manchester United, and its capitalization exceeds 4,123 billion USD. In the 2016-2017 season, the revenues of Manchester United exceeded 737 million USD. The club’s budget from commercial activities, as part of its contracts with Adidas and General Motors, increased the club’s budget by 325 million USD. The financial indicators of other leading football clubs are also impressive:

Real Madrid:

Capitalization – 4.088 billion USD

Broadcasting of Football Matches – 237 million USD

Other commercial activities – 301 million USD

Barcelona

Capitalization – 4.064 billion USD

Broadcasting of Football Matches – 215 million USD

Other commercial activities – 296 million USD

Munich Bavaria

Capitalization – 3.063 billion USD

Broadcasting of Football Matches – 147 million USD

Other commercial activities – 343 million USD

According to the 2017 indicators, the top 30 European clubs (due to revenues), 13 clubs are from the Premier League, 3 ones from the LA League, 6 ones from Bundesliga, 5 ones from Serie A and 2 from France.

The English Premier League is a leading league in terms of revenues from the broadcasting of matches. In 2015, the Premier League clubs received revenues of 6.573 billion USD under contracts with Sky Sports and BT Sport. In whole, revenues from various contractors exceeded 10 billion USD. The BBC is also among the contractors of the Premier League, which has paid 261 million USD to the league.

It is interesting that revenues only from one match were at  92 million USD, for Arsenal. Chelsea is second with 90 million USD, Real – 73 million USD, Liverpool – 73 million USD, Bevaria – 72 million USD, Manchester United – 70 million USD and Barcelona – 68 million USD.

Champions League is considered to be the most profitable tournament in the world. Clubs have collected 2.2 billion USD from participation in the 2018-2019 season. It is interesting the tournament’s organizers paid only 1.06 billion USD to the clubs in the 2012-2013 season.

Who are the world’s highest-paid soccer players, and how much do they earn a year? The top 10 soccer players, according to the France Football, are as follows:

Messi – 130

Cristiano Ronaldo – 113

Neymar – 91.5

Antoine Griezmann – 44

Gareth Bale – 40.2

Philippe Coutinho – 40

Andres Iniesta – 33

Alexis Sanchez – 30.7

Ezequiel Lavezzi  – 28.3

Luis Suarez – 28

What situation do we have in Georgia in this respect? In Georgia, football clubs receive no revenues in practice. Tickets cannot be sold, TV channels don’t pay a  penny for broadcasting football matches, advertisements do not work, and the Georgian business sector shows no interest in Georgian football. The Georgian Football Federation tries to draw interested investors through budgetary funds, but these efforts do not suffice.

Namely, these efforts suffice to hold only the Georgian championship. And this is our reality today. According to the Georgian Football Development fund, in 2017, the average salary in the National League was 2,306 GEL. Only 85 soccer players of 342  receive more than 3,000 GEL a month in all clubs of Georgia.

A worse situation is reported in the Second League, where the average salary is under 1000 GEL, and 33 succor players receive  only 500 GEL a month.