Main sources of revenue streams clubs rely on

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Professional football clubs including South African clubs campaigning in the Absa Premiership and GladAfrica Championship rely on different sources of revenue or income which are currently affected by the Coronavirus outbreak and club bosses are forced to seek ways to neutralise the financial damage caused by the deadly virus.

In Europe, players and managers are accepting pay cuts to help their clubs mitigate the financial effects of Covid-19. Some of the prominent clubs to ask players to take the pay reduction include Bayern Munich, Borussia Dortmund, Juventus and Bournemouth.

However, in South Africa, clubs and the Premier Soccer League (PSL) are yet to take into consideration the issue of salary pay cuts for players, coaches and staff members.

‘Small’ teams in the PSL rely on the PSL grants to survive as they don’t have lucrative sponsors with owners having to dip into their own pockets to keep their clubs financially stable and running.

Big teams such as Kaizer Chiefs, Orlando Pirates and Mamelodi Sundowns don’t only depend on the PSL grant to survive as they have multiple sources of income – lucrative sponsors.

The global players union FIFPRO have listed the four main sources of revenue streams clubs depend on.

Broadcasting income – the focus is on the sales of television and digital rights. All over the world, the rights-holders such as leagues and federations package these rights on behalf of clubs and players negotiate with possible broadcasters for a fee. The League negotiates with broadcasters on behalf of clubs, it is also possible that clubs can negotiate individually depending on the model that works best.

Commercial Revenue Stream – this income is generated by individual clubs. Monies derived from sponsorship and or advertising (for an example main sponsor on the t-shirt, kit supplier). Players can also maximise on this space, footwear and all that. Clubs can also have events, and other partnerships, even staging off-season tournaments that would bring extra income.

Matchday revenue – this refers to football matches which are normally characterized by sales of general tickets, annual tickets, hospitality or VIP tickets. This aspect is informed mainly by the support or following of a team during home games.

Player transfer revenue – income generated by selling players. The monies are normally used to inject some necessary cash needed to run the business.

FIFPRO, went on to state that many professional players cannot afford to have their wages cut during this uncertain period.

“Most players can only afford a pay cut as much as any other worker. Their income is not in the range that people assume it to be,” said FIFPRO General Secretary Jonas Baer-Hoffmann.

“They are paid much less, often around average national income. Minimum wage players exist around the world and, for them, any cuts can have drastic personal consequences in terms of simply paying rent or buying groceries for their families,” he added.

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By FARPost Reporter 

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