RBS Report: football is the most profitable sport, with global revenue of $47 billion
Rome Business School published the research “The Business of Sports in Italy. The World Cup in Qatar and the new frontiers between eSports, crypto, NFT and metaverse.
- Tommaso Marazzi, Expert in Sport Business and Assistant Master in Sport & Lifestyle Management alla Rome Business School;
- Alessio Postiglione, Program Director Master in Corporate Communication Management of Rome Business School;
- Valerio Mancini, Director of RBS Research Center.
The study makes an analysis of the soccer market at the global level with a specific focus on the Italian reality, the critical issues of the soccer industry, the impact of the pandemic, the reduction in the number of spectators, registered members and players especially among young people, and the absence of the Azzurri at the World Cup in Qatar 2022. The role of cryptocurrencies, NFT, eSports platforms and metaverse, now used by small and large sports clubs, is highlighted, highlighting best practices and technologies that can get the sports industry off the ground in Italy.
Globally, soccer is the most profitable sport. With global revenues of $47 billion, it accounts for 28 percent of the turnover generated by sports worldwide. Europe is the richest stage internationally, but in the 2019-2020 and 2020-2021 seasons, clubs in Europe’s Top Divisions recorded an overall loss -7 billion euros in revenue. However, according to the authors of the research, the numbers will rise again: until 2025 the average annual increase in the number of European spectators will be +8% (+37.7% if we consider calculations by 2030).
Soccer is undoubtedly the most watched and played sport in Italy: it is the favorite of 31% of Italians, the European average is 27% (FICG, 2021). In our country, soccer generated 78.8 billion euros in revenues, a figure equivalent to 3 percent of Italian GDP (Sport System Observatory, 2022). Despite this, it is a suffering industry: in the 2020-2021 season, about -92.4% fewer matches were played than in 2018-2019, this caused lower revenues of 7 billion euros of which ticketing (4.4), sponsorship and commercial activities (1.7), TV rights and UEFA revenues (0.9).
Pandemic aside, Italian soccer still has critical issues that have never really been addressed such as excessive debt by most clubs (amounting to 5.4 billion euros, +3.5 percent compared to 2019-2020 according to the FIGC, 2021), infrastructure obsolescence, marketing strategies on match day the low propensity for innovation and experimentation with virtuous foreign practices such as naming rights, and the inability to create and nurture direct contact with new generations, who are increasingly fascinated and involved in the use of new immersive technologies.
Soccer in Italy: decreasing membership and growing eSports
As of today in Italy, sport has an impact on the national economy of about 24.5 billion euros (3 percent of GDP), a significant value-guaranteeing about 420,000 jobs-but one that pales in comparison to countries such as France and the United Kingdom where it is close to 6 percent of GDP. Data in hand, investing in soccer pays off: the total value of soccer for the FIGC is €4.53 billion (2020-2021 season); for that season, Italy got a return of €18.3 – in tax and social security terms – for every euro “invested” by the Italian government in soccer.
The improvement in the Azzurri’s reputation as a result of wins at the 2020 European Football Championships, the 2022 European Swimming Championships and the 2020 Tokyo Olympics, thanks mainly to successes in athletics, was +21.3% in 2021 (FICG data), generating an economic impact of about 36 million euros. Not only that, net sales in Italy of official FIGC-PUMA merchandising increased +295% (abroad +30%). So there was no shortage of benefits for the Country System, with an indirect economic impact estimated at least 0.7% of GDP (12 billion).
However, the Football System is in the midst of a crisis: in Italy, we have witnessed a sharp decrease in FIGC registered members – referees (-6.3%), coaches (-2.2%), clubs (-20.8%) and players (-21%) – with truly alarming numbers especially as far as youth activity is concerned: comparing the 2018-2019 and 2020-2021 seasons, there are 245,739 registered members, or -29.3%; with a percentage that rises to -48.9% if only the South and Islands area is considered. If we look at those practicing soccer in our country: between 2019 and 2021, the percentage of over-18s playing soccer decreased to 17% (-3%), while that of under-18s decreased from 35% to 31% (-4%). The regions where the greatest impact occurred were Basilicata (-49%), Molise and Sicily (-43%), Calabria (-42%) and Campania (-41%). Significantly higher numbers than in northern Italy with Veneto and Piedmont coming in at only -13%, according to FIGC data.
Both to find new sources of funding and to bring young people back to soccer, clubs are focusing on eSports. A phenomenon that also affects Italy, as reported by Gaming Report: in 2021 every day there were 475 thousand fans who followed digital sports events, while on a weekly level the threshold of 1 million 620 thousand was reached, for a growth of +15% compared to 2020. A sector in great growth with a value of more than 1 billion globally in 2021 (data from IIDEA – Italian Interactive Digital Entertainment Association). An example is the League of Legends tournament, which surpassed the Super Bowl in terms of audience (100 million vs 98 million).
Looking at Italy, the eSports market will reach €40 million in value in 2023, up from €16 million in 2020. For Alessio Postiglione, “these numbers show that eSports is currently the most promising market segment in terms of sponsorship opportunities and corporate promotion.”
The national team’s absence in Qatar and the World Cup numbers.
The Azzurri’s absence is a significant setback for the economy and Italian soccer, considering that winning in Germany 2006 caused a +1.9 percent growth in GDP and that the World Cup in Qatar could have brought the Italian federation, if victorious, a total revenue of at least $45 million. Counting that the national team today has an estimated value of about 93 million a year and will rise to 102 from 2023, its value could have been even higher if it qualifies for the Qatar review. Not only that, Italy will see a reduction in revenues from merchandising, TV rights, consumer sectors and sports betting: at the World Cup in Qatar, the estimated induced revenue generated would have been nearly 300 million euros in bets, of which only 45 million would have been on the matches played by the Italian national team, which historically count with an audience of more than 10 million spectators.
This will also be the richest edition of all with costs of about 467 million euros spent by the Qatari government per week in preparation for the World Cup, touching the record figure of 220 billion spent, higher than the sum of all World Cups made until 2018. The comparison with Brazil’s 2014 World Cup, the second highest ($15 billion), is merciless: spending in Qatar is almost 15 times higher. To cover this expense, not only sovereign wealth funds come into play, but also sponsors, such as Emirates, Etihad Airways and Qatar Airways, all of which have major deals with European soccer teams worth millions of dollars.
“The Qatar World Cup is a paradigmatic case of the role of soccer as a tool of soft power and of global soccer competitions as a means of gaining visibility,” concludes Alessio Postiglione. Prices to attend matches are also increasing, particularly those to see the final: they go from €995 in Russia to €1,400 for Qatar, about 40 percent higher.