Rome Business School – Research Center published its 5th Report of Research by Valerio Mancini and Alessio Postiglione (coordinator of the Master in Political Marketing and Communication) on the increasingly internationally discussed topic of Football. Why does a nation organize a big football event? What are the most profitable national and international leagues? What role does football plays in the global geopolitic optic? Why football hasn’t completely stopped even in front of such an unprecedented global crisis? What will be the effects of the COVID-19 health emergency on the football business in the coming years?
Football has now effectively become one of the protagonists in the international geopolitical panorama. FIFA with 211 national associations organized in 6 continental confederations, has more members than the United Nations (193). The assignment of the World Cup affects the economic and geostrategic systems of nations, bringing incredible high investments or debts depending on the managerial and political performing function of each individual country. During the last 10 years the turnover of the main world and European top football clubs has drastically raised, especially thanks to key collaboration with large foreign groups, mostly with countries in full economic growth. For example, the UEFA Champions League which has gained more and more weight in terms of revenue, today is more valuable than many of the European leagues, with the exception of the Premier League, its revenues have grown from 1.3 to 3.2 billion of euros in 10 years. Another important economic action is the current acquisition of Dan Fredkin that from Roma passed to the American Tycoon, for an operation worth 591 million of euros, emphasizing the geopolitical clash, not too veiled and increasingly topical, between US and China.
Moving on to a more in-depth analysis of the Italian economical football situation, it is possible to note that this is constantly growing, recording national revenues of € 4.7 billion, a figure that is the result of the FIGC budget, which is equivalent to 12% of GDP of the football worldwide. This generates 1.2 billion euros in revenues for the national tax authorities. In total, the five largest Italian clubs (Juventus, Inter, Rome, Milan and Naples) are worth € 1.5 billion, ranking among the top 22 most valuable European clubs. The economic weight of football television rights is also significant, which in the 54 major European professional leagues rose from 2.8 to 20.1 billion of euros. Furthermore, remaining in Italy, we can note significant differences between Serie A and minor leagues. For example in the case of Lazio club, the total value of the two protagonists of Capitoline football is respectively 355.15 million for the Giallorossi (Rome) and 304.80 million for the Biancocelesti “cousins” (Lazio).
The Covid-19 crisis has drastically slowed down the economic rise of football, decreasing its values by 20-25%. The interruption of the 2019/20 season will reduce the revenues of clubs in the Premier League alone by around 1.1 billion euros. Globally, it is estimated that losses for 2020 should reach 4.5 billion euros to reach 6.3 billion in 2021, considering that about 64% of expenditure is destined for salaries. According to the Report, a return to normality will have to wait until 2025.
“The realization of our Report on the economy of football underlines how Business Schools can play a key role in linking the demand and supply of education and work – comments Antonio Ragusa, Rome Business School’s Dean – on the issues in object, we offer, for example, an excellent Masters course in Sport Management, capable of training talents in the field of sports leadership with a highly international profile, also thanks to collaborations developed all over the world with some of the most important multinational companies in the world”.
The attention of operators is now focused on a future model of post-Covid 19 European football. Between the solution thought to contrast the economic losing coming from the COVID19 emergency there is the one of providing limitations in terms of salaries, the cost of transfers and player acquisitions. There will also be a lot of focus on the revenues coming from the main online platforms (Dazn, Eurosport, Live now etc.). There are a lot of companies ready to invest to reach, also through football, the widest audience possible, especially through social channels. All while waiting for the new related to a relaunch of the economy expected for the 2025, which could radically change the existing models.