football industry analysis

Football Industry Analysis- Shyam Prasad

- MIB – 1113 - 007

Clubs

Staff and Professionals

Local Businesses

Fans

Merchandise Sale

Sponsors & Gate receipts

Clubs

Staff and Professionals

Fans

Sponsors

• "Football isn't a matter of life and death - its much more important than that!" Bill Shankly

• “I have the chance to do for a living what I like the most in life, and that’s playing football. I can make people happy and enjoy myself at the same time.”

• ~Ronaldinho

• Football Industry• Players of football Industry• Size of the Industry• Market share of players• Profitability Analysis• PEST Analysis• Porter’s Five Forces

Objective

The Industry• Cup Competitions• League Competitions• Broadcasting rights• Player transfer fees• Sponsorships• Footballer’s Earnings• Product manufacturers earnings• Games

Players of the Industry• Manchester United• Real Madrid• Arsenal• Bayern Munich• Barcelona• AC Milan• Chelsea• Juventus• Liverpool• Internazionale• Others

Players of the industry• Top Sponsors

• Aon corporation• Nike• Adidas• Fly Emirates• Standard Chartered Bank• Telekom• Bwin• UNICEF

Size of the Industry

Size of Football industry• Trends of Turnover

• Trends vary based upon “On pitch performance”» Sponsorship bonuses

0

500

1000

1500

2000

2500

3000

Turnover 2010turnover 2011

Market share

Manchester United10%

Real Madrid10%

Arsenal 4%Bayern Munich

7%

Barcelona9%

Milan4%Chelsea

5%Juventus

3%Lierpool

4%

Internazionale4%

Others40%

Market share

Profitability AnalysisRevenue Sources

Gate Receipts Tickets

Reservations

Broadcasting revenue TV broadcasting

Radio broadcasting

Commercial Revenue

Sponsors Shirt Sponsors

Kit Sponsors

Merchandising Brand

Costs Staff Player’s Wages

Staff Salaries

Amortisation Player’s amortisation

Goodwill amortisaiton

Operating Cost

Home matches Conducting expenses

Conference and catering

Factors Affecting Profitability

On Pitch Performance Getting Points on board

Fan appreciation

Off Pitch Performance Negotiations

Player’s Team Moral

Profitability Analysis – ManU

Profitability Analysis - ManU

Political Environment

• Governing bodies

Economic environment

• Sponsors• Owners• Stock Markets

Social Environment

• Fans / Supporters• Press• Culture

Technological Environment

• Media• Broadcasting Partners

PEST analysis

Political

Economic

Social

Technological

• Financial Fairplay• Squad size restriction

• Owner’s debts• Inflation

• Hooliganism• Gossips

• Media• Broadcasters

•BOP rule• Financial Caps

Porter’s Five Forces

Porter’s Five Forces

• Bargaining Power of Buyers» Fan attendance – affects ticket sales

» TV viewer ratings

Lack of success18% less

season ticket renewals

Reduced ticket rates

Wolves Case :“Wolves pay price off the pitch”

• Bargaining Power of Suppliers» Sponsors bargain over provision of finances» Player transfers

Porter’s Five Forces

Sponsors / Owners Negotiations Deal

Other clubs Negotiations Deal

• Threat of substitutes» Other predominant sports in respective

countries/continents

Porter’s Five Forces

Racing

Hockey

Rugby

Classic Sports

Golf

• Threat of competitors» Rival clubs , Foreign league clubs» Overseas Fans

Porter’s Five Forces

• Threat of new entrants» New club entering into competition (Long term threat)

Porter’s Five Forces

Relegated in 1974Went on to become Champions for 11

Times

Now, Most valuable club In the world

Resources 1.Wikipedia2.Footballeconomy.com3.Footballfinance.com4.Sun magazine5.Google6.Deloitte Football Money

League

Questions?

Thank you!