The amount of money which is given to sports stars for their work is often the subject of great debate. Some people are angered by the staggering paychecks these professionals receive, considering it unfair that an unessential role is valued so highly, especially when compared to soldiers and doctors. On the other side of this, others believe that the money these people are able to make is completely fair, and is simply the result of huge consumer demand for their work. Whichever side of the fence you’re on, it’s unlikely that you’d be upset if you were to get such a generous salary.
Of course, though, the topic of money in sports reaches far further than the pay of the people playing the games. This industry is worth between $480 and $620 billion, and it isn’t likely to shrink any time soon, with sports remaining popular throughout the good times and the bad. But, how exactly does kicking balls and swinging bats generate such a huge amount of money? This article will be exploring this area, giving you an idea of how the largest sports teams in the world are able to maintain and grow their wealth, even when other kinds of businesses are struggling to keep their doors open.
Live sports have been one of the most popular options found on televisions for a very long time. People from around the world tune in to watch their favourite teams, and large-scale events often pull in the most viewers. The 2014 FIFA World Cup was able to capture the attention of more than 3.2 billion viewers, following a similar record in 2010, making it the single most popular live television event in history. With so many people watching sports on television, advertising professionals see this as one of the best ways to get their brand out into the world.
This is where sponsors come in. Most sports teams will have at least one sponsor funding them, and some will have a host of companies willing to pay them to get their name out. Players may also have sponsors, with some even having their hairstyles or outfits paid for by large companies. Stadiums will also have their own sponsors, and this is why many carry the name of a large brand. These sponsors are the backbone of a sports team’s wealth, with more than $62.7 billion spent on this in 2017 alone.
Tickets & Merchandise
If you’ve ever been to a large-scale sports game before, you will probably have some idea of how much a ticket can cost for events like this. Even the most expensive theatres in the world struggle to rival these prices. Of course, though, with demand for tickets so high, it makes sense that they cost a pretty penny, and it can be well worth spending this money if you want to see your favourite team play. Given that a lot of teams already own their stadiums, are making money from sponsors, and it doesn’t cost much to run a sports event, the money which is made from this is practically all profit, at least for the biggest teams. Loyal followers can make this cheaper for themselves by buying season tickets.
Alongside tickets, most sports teams also sell and licence a lot of merchandise to their fans. This can come in the form of replica kits, DVDs and CDs, and a whole host of other items which will be embellished with the team’s logo. Licencing is often the most profitable side of this, with some sports teams able to make money for doing absolutely nothing, and manufacturing firms being eager to sell products with this sort of popularity. It’s easy to see how many people buy items like this; the seats at most sports games are filled with them. Of course, though, this is only scratching the surface of the money which is wrapped up in sports.
For those that have played a lot of sports-based video games, the idea of each player having their own value isn’t a foreign one. Their performance on the pitch, popularity with fans, and even their attitude can all impact a player’s value. Soccer has historically has the most valuable players, and the biggest football transfers in history sit upwards of $100 million, making them an incredibly high-value asset. Of course, though, this isn’t always worked out fairly, as new players who haven’t had the chance to show off their abilities will often be valued far less than more experienced players, even if they are better at the game.
There are several teams around the world which have been able to make a fortune out of transfers like this. By taking on a new player, training them, and showing off their prowess in large-scale games, team owners can turn this side of the sport into one of their primary business ventures. Barcelona is a great example of this, though they often reinvest the money made into new players and carry the cycle on. According to Forbes, Kylian Mbappe was the most valuable football player at the start of 2019, with an estimated value of $249.9 million.
A lot of sports advertising is done through sponsorships, though this is only one side of the coin. To spread their reach even further, a lot of companies pay a huge amount to be able to say that they are in league with the best sports teams in the world. Breakfast cereals, energy drinks, and even cars are sold like this, and it often doesn’t matter if the product has anything to do with the sports team. This is similar to licencing merchandise, but works in a slightly different way, as it gives the business the chance to make it look as though they are affiliated with a team, rather than simply paying them.
The Players Themselves
Sports teams have been proven to be an excellent business model when they’re able to find success, but the value of the team isn’t what most people have on their mind. Instead, they will be thinking about the money each player makes. With just his salary alone, a player like Kylian Mbappe can make upwards of half a million dollars each week, ultimately resulting in a $30 million annual salary. This is before you consider other avenues players have when it comes to making money.
A lot of sports stars write their own books, and some work for advertising companies to put their face on a brand. Television appearances, being a speaker at events, and even releasing their own music are all options for sports stars, and some have even found fame in completely different industries. This has left people like David Beckham with a net worth of over $450 million, and this is staggering considering that these stars can often retire in their 30s. The money doesn’t have to stop when they’re done with their game, though, as many sports stars continue their career in other ways, with some even getting into fields like politics.
It can be easy to feel a little bitter about the money in the world of sports. The vast wealth of players and teams alike could be used for far more productive endeavours, though there is a very good reason for this field paying so much; competition. You have to be at the very top of your game to play for the world’s greatest teams, and very few people are able to reach this point. Of course, though, if you are young enough and have a passion for sports, it’s well worth working hard towards a goal like this.