02/12/2020 by Liam O’Callaghan 0 Comments
Who has the highest Commercial income relative to turnover?
European clubs have been stripped of significant matchday income. Now, more than ever, clubs need a diversified range of income streams.
Due to football being one of the highest entertainment sports in the world, it allows for many clubs to generate substantial income through commercial streams.
These streams include shirt sponsors, sleeve sponsors, training gear sponsors, kit supplier deals, naming right deals, official club partnerships, shirt sales, match day programme sales, broadcasting rights etc. A successful club will use aspects of all possible commercial avenues to gain income and simultaneously increase its fan base.
Football clubs are quite expensive to run with clubs having high player wages, an abundance of staff salaries to pay and many other expenses which may explain why not all of the biggest clubs have the best percentage of commercial income relative to turnover.
Obviously, if a club is winning trophies and going through a successful spell it is more likely to generate more commercial income and traction. However, regardless of the size and fame of a club any football club has the capabilities to improve their commercial income.
A huge factor in gaining commercial income is down to the clubs’ fan base. The fans are the backbone of any football club and having a loyal fanbase is a great way to increase your commercial income. The fans will buy the club merchandise and this will entice companies to agree sponsorship deals with these clubs. Furthermore, fans are then more likely to buy items from brands affiliated with their football club. This draws companies in to sponsoring clubs.
Commercial income is the most independent of performance. ‘Off The Pitch’ have conducted an analysis to determine which clubs derive the largest percentage of their turnover from commercial streams. Turnover is simply all the income the club makes throughout the year.
The top-20 ranking saw Paris Saint-Germain come out on top, with almost 70 per cent of their €659 million turnover derived from commercial income.
Apart from PSG, Barcelona, Man United, Man City, Bayern Munich, Dortmund, and Chelsea, each of the clubs in the top 20 had a commercial income of €30 million or less, with at least 40 per cent of their total turnover derived from sponsorships, merchandising, hospitality, and other commercial streams. Surprisingly AGF – Aarhus and Broendby both had a commercial income of less than 25 million and had over 60% of their total turnover derived from commercial needs.
In a previous ranking, many of the Scandinavian clubs on the list proved to be among those with the lowest stadium utilisation rates, suggesting that the clubs have plenty of potential to capitalise further on fans - when they're eventually allowed back into stadiums.
(Source: Off the Pitch Club Comparison Tool)
As we have seen, PSG have the highest commercial income relative to turnover in Europe. However, many other clubs have the potential to reach, and maybe even exceed this standard, if they were to capitalise on all aspects of commercial income.