Business decisions that changed Football forever

good business decisions enable

significant long-term success in

football and with their ever-growing

impact we decided to reflect on the best

business decisions taken by football

clubs this is not a definitive list or a

ranking and it doesn't pretend to be

instead it's a chance to highlight some

of the most forward-thinking moves that

clubs have made during the modern era

let's begin by highlighting the major

kinds of business decisions that

football clubs can take play a transfer

and contract related decisions stadium

and training ground related decisions

sponsorship media and Commercial

decisions debt and financing related

decisions and finally leadership team

and football structure related decisions

we'll look at each in turn but start

with the stadium and training ground

related decisions

and one of the standouts in that

category is West Ham's deal of the

century on the London Stadium the London

Stadium was originally built for the

2012 Olympic Games and needed

significant renovation to be usable for

football ultimately this cost 323

million pounds after multiple

unsuccessful attempts to find a sponsor

West Ham eventually agreed a 99-year

rental lease on the stadium per this

lease West Ham would pay a fraction of

the renovation costs roughly 15 million

pounds and an annual rent of 2.5 million

pounds to use it as their home stadium

they would not bear any operating costs

which far exceeded the rent these would

be borne by the London Legacy

Development Corporation which manages

the stadium

former Sports Minister Richard cabon was

quoted in the guardian as saying this

stadium is the biggest mistake of the

Olympics West Ham are basically getting

a stadium costing more than 600 million

pounds for a one-time fee of 15 million

and a small annual rent

to make matters worse Europa League

match days were not explicitly covered

in the lease of the contract according

to the BBC they run to the semi-finals

of the 21-22 competition earned the club

in the region of 12 million pounds but

at an extra rental cost of just 185 000.

to their credit West Ham say that they

offered to buy the stadium and also

offered considerable cash to purchase

commercial rights but claim that these

have been rejected or ignored from West

Ham's perspective and strictly as a

business decision this was undoubtedly

one of the best

the next category is Media sponsorship

and Commercial decisions Manchester

United warrants a mention here the club

has been the Forefront of commercial

Innovation piloting the idea of

different sponsors and different

geographies and creating a portfolio of

diverse Partners building a truly Global

brand with the standout here Still

Remains Real Madrid the first Club to

truly appreciate the importance of a

global brand and fully monetize player

image rights to image rights which today

are the subject of heavy debate as

players agree personal terms on

transfers were largely left untapped two

decades ago Florentina Perez recognized

very early the economic strength of

player image rights and that would be

the off the field power behind the

famous galactico's era

he instituted a system whereby player

image rights would be shared equally

between the club and the player and this

benefited Madrid considerably

to her perspective David Beckham's image

rights at LA Galaxy was split 80 20 80

to Beckham himself and 20 of the club

this was 50 50 in Madrid and it's one of

the reasons why Beckham whose commercial

value had been significantly undervalued

by Manchester United was such a transfer

coup under Perez's leadership rails

Global brand grew significantly and that

period was also the dawn of hugely

lucrative Global tours including to Asia

Perez actually doubled rails operating

Revenue to nearly 300 million euros by

2006 from just over 150 million in 2002.

the third category is financing and here

we'll focus on restructuring debt in the

wake of the pandemic in July 2020

Arsenal's owners kse restructured the

debt incurred by financing the

construction of the Emirates Stadium the

restructuring involved one-time

exceptional costs of 32.2 million pounds

but came at a significantly lower

interest rate and freed up 36 million

pounds of cash Reserve

specifically Arsenal's annual cost of

financing was halved from 20 million

pounds 11 million interest plus 9

million loan repayments to 10 million

pounds 5 million of each interest and

loan repayment and the 36 million pound

cash Reserve led to a one-time uptick in

cash flow Arsenal couldn't use this

Reserve under the previous debt

structure because it was mandated to be

held only for debt payments

this significantly improved Arsenal's

position despite much day Revenue

disappearing during the pandemic

but finally the most meaningful and

significant business Decisions by

football clubs involve reshaping the

leadership team and the football

structure and we'd like to highlight

Brentford specifically the decision to

shut down their Youth Academy and move

heavily criticized at the time and

pursue a B Team model now at a cost of

roughly 2 million pounds per year

running the academy was a loss making

Venture for Brentford who found

themselves spending years coaching young

players only to see them poached by

bigger clubs receiving poultry fees in

exchange instead Brentford decided to

focus on recruiting players aged 17 to

20 that had been released while youth

academies across the country or Talent

from undervalued overseas markets and

housed them in a B Team

the B Team wasn't entered into any

league but played multiple friendlies

throughout the year and it proved

significantly more cost effective

running at roughly half the cost of the

academy

within its first season four B-Team

players went on to play for the first

team a total of 10 B-Team players have

been officially promoted to the first

team most notably Chris mepum Who Rose

through the B team and first team ranks

and was ultimately sold to Bournemouth

for 12 million pounds and Marcus Force

who scored the goal that sent Brentford

to Wembley for the playoff Final in 2021

now it's worth pointing out the bretford

acquired an academy license and

announced plans to reopen their Youth

Academy in 2022 the main reason is a

change in Premier League rules which

stipulate that all teams competing in

the Top Flight in 24-25 must have a

category 3 level Academy or higher

however the BT model has been a

resounding success and Brentford

maintained that it will continue to be

the primary Gateway into the first team

the academy will complement and enhance

the B Team program in the words of

brentford's director of football Phil

Giles as a continued endorsement of the

latter's success

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