Why Football Is Not As Big As You Think

Football is commonly referred to as the biggest sport in the world.

But is it really as big as we think?

This is the revenue of the major football leagues combined.

This is the revenue of Disney.

And this is Apple.

Welcome to Athletic Interest.

In this video we will put the size of football into perspective.

The NFL, one of the most popular sports on the planet, has around 400 million fans.

Tennis has an impressive 1 billion fans.

Football, or “soccer”, as some of you like to call it in the comments...

Football has a mind boggling three and a half billion fans.

17 of the top 20 most popular athletes on social media are footballers, with Ronaldo

being the single most  followed person on instagram.

Even retired footballers like David Beckham, Ronaldinho and Gareth Bale (a joke) can boast

a greater number of followers than the likes of Lewis Hamilton, Steph Curry and Connor

McGregor.

277 million, nope that is not the amount of debt Barcelona have accumulated in the last

week, but rather their current follower count.

They are the most followed team of any sport on social media, and lead a total of 17 football

clubs that make up the 20 most followed sports teams.

With billions of fans, football can clearly consider itself the largest sport on the planet...

this has been Athletic Interest, thank you for watching…

Wait a second!

We are nowhere near discovering the true size of football.

Football is not only a sport, it is also a worldwide entertainment product.

To get a more complete understanding of the ‘size’ of football, we have to see how

it compares to rivals in the entertainment sector.

The industry for live music is stronger than ever.

In 2019 the top 100 tours sold almost 60 million tickets.

In that same period, the top 80 teams in football sold around 50 million match tickets.

While football may be comfortable rubbing shoulders with the music industry, how does

it compare to the true king of entertainment…

Mickey Mouse.

Luke Skywalker, Homer Simpson and both captains.

That’s just a taste of the numerous household names that find themselves under the watchful

eye of Disney.

Mickey seems intent to get his white gloved hands on everything in entertainment.

Disney attractions have welcomed over double (150m) the amount of visitors than their nearest

rival.

Almost half a billion tickets were sold for Disney owned movies in the US, that is nearly

40% of the entire box office in 2019.

While the top football league’s cannot compete in terms of live attendance Mickey might be

a little jealous of the global reach of football.

The Premier League claims to have streamed live football into 1 billion homes in 2019,

with over 3 billion people watching league content.

You may have noticed that we have barely compared football with its rivals based on another

quite important metric...revenue!

While the media often paint football as a corrupt oasis of money, they have failed to

notice that football doesn’t make anywhere near as much as you might expect.

If all major leagues and federations were to merge into one company their revenue would

place them on rank 212 in the world leaderboard, just between these two companies.

Just to remind you that is from over 3.5 billion potential customers.

If you still think that 33 billion euros is an impressive return let’s look at a few

other examples:

From 2.89 billion users Facebook generates over 7080 billion euros a year.

Apple is said to have around 580 million active customers worldwide and recorded 236 billion

in sales in 2020.

HSBC has just under 40 million customers and still managed 44 billion in 2020.

While it is unfair to compare football leagues to the money making machines that are banking

and tech, football is clearly struggling to maximise revenues from its massive fanbase.

When Steve Jobs unveiled the Ipod in 2001 he revolutionized the digital music space

and dramatically boosted the revenues of Apple.

This is the magic of the Tech industry, there are no boundaries to what you can invent and

companies constantly innovate to boost revenues.

Football is a little more conservative.

The sport has rules that have been followed for over one hundred years and clubs are unable

to alter the product to make it more attractive.

In fact, football clubs are limited to three major revenue streams: Broadcasting, Commercial

and Matchday.

Matchday revenue is limited by stadium capacity and location.

Football clubs may have huge global audiences, but only a fraction of the fans in India or

America will be able to make the pilgrimage to Manchester or Milan.

Broadcasting revenue in the Premier League increased from 45 million in 92 to almost

3 billion in 2020..

Impressive, but that still only equates to around 1 euro per fan per season.

More money is made by the middleman: TV stations who capitalize on footballs’ reach by selling

subscriptions and advertisements.

Commercial contracts also suffer from the middleman problem.

Take shirt sales for example.

Clubs may charge upwards of 100 euros for a match shirt, but the big chunk goes to Nike,

Adidas and Puma.

Clubs are lucky to take home 10% of the sale price.

With player salaries and transfer costs on the rise, it might feel odd to think about

how football can maximize revenues.

But while huge amounts of money are flowing from fans to football, the clubs themselves

are only getting a tiny cut, with TV companies and sponsors taking the rest.

And compared to the CEOs of the biggest companies, even the salaries of Ronaldo and Messi don’t

seem so crazy anymore.

So what can football clubs do to close the gap?

Mickey might have the answer.

Not long ago, if you wanted to watch a Disney movie, you would have to sign up for multiple

services such as Netflix or Sky Movies, costing you hundreds of euros a year.

Disney realised that they could make a lot more money if they bundled all of their content

into one package and offered it to fans through their own streaming service.

In November 2019, Disney Plus was born.

They can now boast over 116 million users across the globe.

What Disney has done here is vertical integration.

This is when a company takes control over a new stage of the production or distribution

of a product.

In Disney’s case, they were already producing the product, but were allowing other companies

like Netflix to profit from distribution.

With Disney Plus, the company has cut out the middleman and will take a larger share

of the profits.

In football, clubs are attempting to get around the middleman, and closer to the fans, by

becoming media companies.

MUTV, Barca TV + and the Fifth Stand app are just some examples of media services that

clubs have launched.

For a small fee, or even free of charge, clubs give fans around the world access to exclusive

content, breaking news and live streams.

Not only does this give clubs a direct link to their fanbase, it allows them to accumulate

incredible amounts of data.

With a deeper understanding of what makes their fans tick, clubs are able to offer lucrative

targeted advertising to their sponsors and some clubs have even started to use this data

to boost sales of merchandise.

Which is another area where clubs are keen to cut out the middleman.

In 2021, Wolverhampton Wanderers rejected a new kit deal with Adidas in favour of the

relatively unknown British brand Castore.

While Castore are technically a middleman between Wolves and the fans, their relationship

with the club is drastically different than found in traditional kit deals.

Wolverhampton Wanderers will take responsibility 

for most of the supply chain,  including distribution,

allowing them to cut costs and take a bigger slice of the sale price.

So how big is football?

From an economic standpoint, football’s revenue is surprisingly negligible.

But in terms of popularity and reach, it is the biggest sport in the world.

And that reach creates trickle down effects that are very hard to measure.

Hundreds of jobs in the media, shoe or event industry are created because of football,

but are not always counted in official statistics as part of the “football industry”.

While the clubs and leagues might not be able to compete with the biggest companies in the

world, they are superior when it comes to entertaining and inspiring whole generations.

As you might have noticed, this video  was packed with data about the football  

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