The emergence of the knowledge economy has led to a change in the social-economic structure of countries globally.
In this scenario, sport, and in particular football, which has passed the ‘social accelerator’ paradigm, is considered one of the most active industries on the international financial scene.
Football clubs, in fact, like companies, have become businesses in their own right: they draw up a balance sheet, they need a financial equilibrium and they must succeed in making a profit.
The economic analysis of sport is not a recent discovery: back in the 1960s, the American economist Walter C. Neale outlined the specificity of companies operating in this market.
In Italy, sport is one of the engines of the country’s development, accounting significantly for the national GDP and representing one of the most widespread forms of entertainment.
To explore the topic further, we met with Tommaso Marazzi, co-author of the research: ‘The business of sport in Italy. The World Cup in Qatar and the new frontiers between eSports, crypto, NFT and metaverse‘, who told us:
“In the Italian landscape, football represents the main sport, being able to count on a pool of fans and practitioners that is around 50% and 35% of the entire sector, respectively.
This is a significant percentage that justifies the significant income that, in essence, also finances other sports: in fact, it is interesting to note the Keynesian-style multiplier effect that football is capable of: it manages to generate three times as much revenue as the money invested.
Unfortunately, the sport is going through a dull period that reached its negative peak when the national team failed in Russia to qualify for the World Cup in Qatar (the richest ever, where the prize for the winning team is worth 45 million euros and participation in the group stage alone guarantees 10.5 million). The losses were significant in terms of credibility, visibility and not least sponsors.
However, also due to the effects of the pandemic, we are witnessing a renewed passion on the part of fans, which is reverberating in very high numbers in terms of season tickets and revenues from television rights.
However, I would like to emphasise that our football is still growing: to give a concrete example, we can say that our Serie A has a very important differential compared to the English championship, the Premier League, which is considered the real benchmark in football.
Comparing, in fact, the number of matches that are sold domestically (domestic broadcasting) by the Premier League, 200, and those of Serie A, 380, on paper our league is ‘worth’ much more in the period between the 2019-20 and 2021-22 seasons. However, if we compare the economic values per match sold, in millions of euros, they are 9.4 for the Premier League and 2.6 for Serie A. In our country, however, a wide variety of fans are also interested in more than one sport: think of swimming, volleyball, basketball, athletics where our athletes achieve excellent results in terms of performance and medals.”
The history of sport has long been characterised by a clear male dominance. However, the path to gender equality has, albeit slowly, initiated a cultural change to overcome stereotypes and old legacies. In recent decades, in fact, women’s sport has undergone an enormous evolution that has led women to conquer important spaces.
For example, in the world of Italian football, the turnaround started when several professional clubs decided to invest heavily in their women’s teams.
“’In Italy, as far as women’s sport is concerned, there is a gap that is not ethically correct, but is a child of our history: think of universal suffrage that only arrived in 1946.
The only exception is volleyball, where there has historically been gender parity in competitions, in profits and in the salaries received by athletes. The example is Paola Egonu, the Italian athlete with the highest salary in the world, who as of this football season plays for Turkey.
As far as football is concerned, the situation has accelerated since the women’s sector became a professional sport in the summer of 2022, in contrast to other disciplines, and Serie A clubs such as Fiorentina, Juventus, Milan and Roma have started to invest. Another significant element is the bargaining of the football market because from now on, female footballers will also have a market value. A fact that, I make no secret of, I see with concern for the influence it could have on other sports, which are not yet ready to grow in this respect.
In general, women’s football could become a vehicle, a flywheel to increase the number of women in the sector, which also grew during the 2019 World Cup, when the Italian national team made it through the group stage. Having won the qualification for the 2023 World Cup only certifies the goodness of the project and the path taken in Italy.”
Esports is an English term that stands for ‘electronic sport’, and indicates the activity of video games organised, lately, also at the professional level. During the Covid 19 pandemic, the gaming industry experienced an exponential increase. The phenomenon, however, thanks to millionaire jackpots that led to the establishment of professional leagues and teams in every country in the world, was already booming. Matches in eSports can be played between a player and a software, or between players even lined up in teams to conquer a common goal.
“The idea of the video game was born in the eastern countries for two fundamental reasons: the first is numerical, because the Asian continent represents an important slice of the world’s population; the second relates to the sphere of performance: in fact, from a sporting point of view, these countries are struggling to establish themselves and carve out a leading role in football at a global level. The 2002 World Cup, for example, was held in Korea to promote the game on the Asian continent, as was the case with the World Cups in the United States, South Africa, and now in 2022 in Qatar.
Esports, contrary to what one might think, does not mean playing a sport in virtual mode. Rather, sport is understood in its sense of discipline, as a form of entertainment. From this perspective, we speak of role-playing and strategy games, the core business of manufacturers such as Nintendo, Ubisoft, Riot Games and Microsoft.
Unlike football, whose business is based on match-day revenue, ticketing and fan consumption on match-day, esport events are based on viewings, thus, not necessarily on physical presence. The most popular game at the moment is League of Legends: there are official tournaments with prize money for the winning teams almost approaching footballers’ salaries. Until a few years ago, it was impossible to assume that there were people on salaries to play a video game, now it is the norm. For a numerical representation, we can say that it is estimated that eSports views will increase from 49% in 2019 to 52% in 2023, i.e. from 21 million in 2019 to 31 in 2023, an increase of 10 million. This is also an interesting figure for stakeholders.“
“In my opinion, there are certainly at least three examples of best practices in relation to sports clubs on the Italian scene: Fiorentina, Como, and FC Clivense.
Fiorentina from the point of view of infrastructure, because in a city like Florence where, like many Italian cities, it is difficult to build a club-owned stadium, having a sports centre is an important first step towards concrete growth.
Como for its forward-looking strategy and the aid of new technologies. The Como club has been characterised by multiple bankruptcies in recent years. For this team, finding economic stability has never been easy. Today, the ownership of the Hartono family, of Indonesian origin, has set out on a very interesting path: to follow step by step a path centred on sporting results and the construction and diffusion of a strong and recognisable brand. For example, the first goal of the ownership was to reach the Serie B, because the second series is in the video games, tools used by Generation Z to be in daily contact with their team. In addition, Como bought a footballer of international relevance such as Cesc Fabregas, an outstanding player at the end of his career, to further drive the brand image. Finally, the Hartono’s launched a charity auction with the NFT to further increase the brand’s visibility.
FC Clivense for the business idea. The former Chievo Verona have adopted the strategy of differentiating their investments: 40/50% on TV rights, only 20% on ticketing and match-day, the rest on merchandising and brand enhancement. Furthermore, the new club was founded through a crowdfunding campaign launched by president Sergio Pellissier, a former Chievo Verona player himself.
FC Clivense has set itself the goal of returning to Serie B by 2027, focusing on the growth of the youth sector in a symbiotic relationship with the first team: a real smart football hub. We want to replicate the example of Ajax Amsterdam, where the way of playing of the first team is replicated in all the lower categories, so that the player who arrives in the first team will know exactly how to move.”
Sport is a phenomenon that has overwhelmingly pervaded society over the last century, year after year. From being an elitist phenomenon, it has become a mass phenomenon, the practice of which represents a fundamental constant in the education of the younger generations. In Italy, according to ISTAT, 20 million people practise sporting activities in an amateur manner, to which must be added at least 12 million registered members, between Promotion Bodies and CONI.
“Sport is certainly a fundamental vehicle for regaining that sociality that we have partly lost during the covid 19 pandemic, especially in team disciplines.
Sport and Health, the state company that promotes sport and healthy lifestyles, is working to improve the relationship between young people and sport. Of course, much depends on infrastructure, on the possibility of giving young people an opportunity to play a sport, not to mention the difficulties, sometimes logistical, that prevent this. And Italy is somewhat lacking here.
From this point of view, we cannot compare our reality with that of the United States: we can only compare it with that of Europe, where sports discipline and school attendance are not so interconnected. The idea is to turn great champions into ambassadors, like Federica Pellegrini, for example: an athlete who has become a figure of great public importance and a role model because she addresses issues of substantial importance.
Lastly, I believe that we must also rethink the concept of sports activities in schools, two hours a week seem really too few when compared with the European average: having an athlete like Valentina Vezzali as Undersecretary for Sport was a very significant message from many points of view.”
An expert in sports business, he holds a degree in Political Science – International Studies curriculum – and a Master’s degree in Sport & Lifestyle Management from the Rome Business School in 2022. Today he writes about football, basketball and motorsport for FootballNews24, also dedicating himself to research in the field of sport from an economic, political and social point of view.
