COMMERCIALIZATION OF FOOTBALL IN EUROPE

COMMERCIALIZATION OF FOOTBALL IN EUROPE

Aim

To investigate the commercialization of football, its dependence on sponsorship and its development through finance.

Objectives

  1. To critically review the literature in relation to football developments over the years with specific reference of European football clubs.
  2. To evaluate the impact/reasons of football commercialization and the influence has had on fans.
  3. To discuss the importance of sponsorships in football development
  4. To investigate the reasons for football clubs ownership by non- EU businessmen.

Research Questions

  1. What are the negative and positive impacts of commercializing football?
  2. What are the perceptions of football fans on the influx of football clubs ownership by non- EU businessmen?
  3. How have the non- EU football clubs ownership impacted on European football competition?
  4. How important is football club sponsorship in Europe?

Recourses of this Project/ Proposed Methodology

  1. Websites
  2. Text books
  3. Journals
  4. Literature trade
  5. Questionaire

Review of the Literature

Introduction

This chapter will present a clear review of the literature with secondary data relating on the following contents. (History and definition of commercialization of football, negatives and positive impacts on commercializing football, the perceptions of football fans on the influx of football clubs ownership by non- EU businessmen, how non – EU football clubs ownership impacted on European football competition, and how important is football club sponsorship in Europe). These chapters will primary define the terms of commercialization, then will move on to the history of football commercialization (how and when it started), it will discuss the positives and negatives of football commercialization, then analyze the approach of football fans on the arrival of non- EU businessmen ownership to their football club. There will also be an analysis of how non- EU football club ownerships impacted on European football competition and finally it will investigate the importance of football clubs sponsorship in Europe.

History & Definition of commercialization of football

Football is arguably the most loved sport on the planet. In past years it used to be played on the streets, on fields with soils and only for fun and time for recreation and pleasure. According to (Watterson 2002) in the early twentieth century football news were roughly limited when usually is existing from people who are present in an event or those who have information from primary shape of communication such as the word of mouth. However by time to time this has changed with the arrival of huge distribution of popular press that brought news from sporting events to a large amount of people (Storm 2011). Then cinemas first took place in Britain in 1920s and 1930s, and consequently the introduction of radio followed by television broadcasts in 1938 when was the first ever football match showed live. After that football was then started to develop. More and more football fans around Europe grow around the commercialization, football became a professional sport with professional football players and large amount of money in the banks of European football clubs thanks to TV rights and sponsorships. People now have the luxury to watch their favorite team on satellite television or to even internet, hear about the news of their team or even make membership to watch a live match on the stadium (Slack 2004). This is how the commercialization of football developed from time to time and will continue to develop because now football is the most loved and famous sport on the planet.

Positives & Negatives

Commercialization is about media receptiveness for the sport. There are various positives of commercializing football. Firstly because of the unlimited commercials of the sport people have it as their favorite, as a result coverage television gain revenues by their advertisements and exposing more people and fans to the sport which this lead to the second advantage, the profitability. Because of sponsorships, advertisements and other means of commercialization local football clubs archive profits, which that might grow revenues for local economy and thus encourages community enthusiasm when the team performance is good. Another positive is the participation of children (Bauer et al 2005). For instance when watching on TV the national football team winning the world cup children will want to start playing football. This will also help the when there is a national health problem for kids who are not eating well by giving them motivation for willingness to exercise and decrease obesity. It will eventually help the children to keep their favorite hobby and take them off the streets by pretending crimes.

However there are different views of perspectives which are negatives. Because of money football lost its value and the sport became more of a business. For example well financed businessmen buy football clubs along with world club players with budget over 300millions to spend, money that are paranormal for most of people. Player salaries used to be £50 per week, now is £100k per week and record signing of a football player to 100millions. Also sponsorships pay enormous amount of money to football clubs only to advertise the brand for ex. Nike, adidas, puma etc. Another negative is when businessmen and football club conferences want their primary target to gain profits from selling advertising space such as sponsor logos, improving facilities or billboards around the stadium. In some occasions also fortunes to change historic stadium names to corporate trademarks only to increase revenues (Carter 2006). Fans don’t agree with that when it happens to be demonstrations every once or twice a month in Europe. This is more about pride, respect and willingness to see their favorite team to succeed, is the only manner which counts to them. And finally commercialization sometimes offers destruction for football players. For example they might ignore to compensate for their national or local team because of their high salaries, sponsorship deals and commercials distract them from money rather than playing football.

The Perceptions of football fans on the influx of football clubs ownership by non- EU businessmen

European football clubs date back to 100 years ago. Football players realized more financial benefits when the game started attracting more spectators (Giulianotti and Robertson 2004). Therefore, to a certain extent, business has been part and parcel of the football industry. Since 1980s, there has been tremendous economic development in football with the involvement of both the domestic and foreign organizations. In the last decade, football clubs have been largely commercialized leading to increased revenue (Krabbenbos 2013). Consequently, football has now become an international business. European clubs and players are increasingly being transferred on expensive transfer fees. Football players are transferred from different clubs all over the world in exchange of millions of Euros. In relation to the extreme commercialization of football, there has been an alarming increase in club ownership by non-EU businessmen. This has had a major impact on the perception of football fans. Most of the fans are taking the transfer of the EU football clubs to non-EU business as major threat to their home teams.

Supporter Relations

The development in professional football has had a major impact on the relationship between fans and their clubs. Football fans have opposed the commercialization of football. Footbal fans have seen their favorite teams turn into corporates. In football business, increased financial capital is directly or indirectly generated (Brown 2000). Through these transfers, owners of non-European football club tend to increase the cost of watching a game. This is mainly done to regain the funds lost during the purchase. As a result, football fans are exploited. They are left disillusioned by their clubs as a result of this exploitation.

The decline of supporters

Due to ownership transfer of football clubs, especially by the non-EU businessmen, there is always an increased cost of match tickets. As a result, there is the decline in the number of traditional supporters and a great increase of new consumer fans. Most of the European football clubs have generational supporters and supporters from the working class. However, the transfer of ownership to non-European businessmen poses a big risk for clubs since the cosmopolitan fan is at greater chance of leaving the club (Brown 2000).

Identity of the football club

In football, it is a culture among fans to have a close identification with their respective clubs. A football club must have a positive identity in order to have a strong relationship between the club and its fans. When a European team is sold to non-European businessman, it loses its original brand identity (Brown 2000). European club fans do not see need of supporting these transferred clubs due to loss of identity. According to Brown (2000), identity is what builds the connection between the consumer and the brand. Therefore, the success of a club relies upon how the club’s image is perceived by both foreign and domestic fans.

How non – EU football clubs ownership impacted on European football competition

Billions of Euros spent on investments into non-EU football clubs not only has a potential long term economic implications to the European Union but also social implications. Non-EU club ownership directly affects the economic activities of the European Union. In recent years, the European football governing body UEFA has claimed the lack of financial fair play which has adversely affected the European Union football clubs. Rich non-EU businessmen tend to exploit the EU football clubs (Andreff and Staudohar 2000).

The financial Fair Play

In the recent years, non-EU businessmen have been buying players from EU football clubs at an alarming rate. The signing of deals with the EU-football players has had a reduced play quality. Therefore, the football governing body (FIFA) decided to regulate the exploitation of football clubs by these businessmen. Financial fair play is the controlling of clubs by the football governing bodies so that they can use their finances fairly in the transfer markets. According to EUFA president, Michael Platini, many clubs have reported worsening and repeated deficits that have led to high club debts in the recent years (Holt 2006). Additionally, participants and private investors have extensively increased their interest in European football clubs. As a result, these clubs have experienced liquidity shortfall hence not being able to pay club managers and players. On the other hand, other clubs have climbed to the top with the help of external funds (Peeters and Szymanski 2013). The well-known example is Chelsea’s Roman Abramovitch. In the past years, he had spent up to half a billion Euros in funding Chelsea to the top. Chelsea is now among the leading European football clubs in the world. In the year 2010, UEFA announced a set of financial constrains that clubs experienced when seeking to enter the comparative market. Financial fair play has significantly reduced the diluting of top European teams (Vopel 2011).

The importance of football club sponsorships in Europe

Sponsorship has been in existence for very many years. Football clubs use sponsorship as the main tool for marketing strategy. A few years back, sponsorship was regarded as a philanthropic and charity idea. However, in the recent years, sponsorship is being used as a marketing tool for football clubs. Sponsorship is defined as the attainment of rights to directly associate with an event for the purpose of delivering benefits to that association (Sloane 2000). EU-Football clubs usually use this opportunity to attain their broader market objective. Many opportunities have come up in the recent times as football clubs compete with each other in creating better sponsorship deals. Therefore, many football clubs  are aware of the fact that they need their customers to survive in the market place. Football clubs are in constant need to satisfy their customers by managing the marketing mix so as to gain a comparative advantage over others. The main importance of football sponsorship in Europe is the advantage of acquiring football kits for the players (Vrooman 2007).

Sports Sponsorship as a Marketing tool

Sports sponsorship is a marketing tool used by corporations to reach the wider audience on the global market. Through a platform of potential customers alongside targeted audience, football clubs are able to penetrate the market place efficiently (Abiodun 2011). The success of a football club is determined by the availability of finances directed towards the development of the club. One of the major ways football clubs are financed is through investments and sponsorships from business and companies. The prospects of a lucrative agreement between football clubs and corporations can be very beneficial to football clubs. Given the incentives, football clubs are able to gain more exposure and income advantage since the clubs receive large amounts of funds and exposure. These funds allow football clubs to develop and progress. However, there are many ways a football club can benefit from a sponsorship program.

Conclusion

Football clubs are ruining the game by emphasizing on the commercial aspect over the football aspect. Football has simply become a money-making activity. Every organization requires profits to be enabled to run its daily activities and expenses. However, the rate at which football clubs are concentrating on the financial aspect is becoming a major concern. For other clubs, they would rather make money than please their fans. As a result, the welfare of the club is deserted hence no motivation among players. For a club to gain a competitive advantage in the market place, it must invest in the welfare of its players.

 

Reference list

Abiodun, O., 2011. The Significance of Sponsorship as a Marketing Tool in Sport Events.

Andreff, W., and Staudohar, P. D., 2000. The evolving European model of professional sports finance. Journal of sports economics, 1, 3, 257-276.

Bauer, H. H., Sauer, N. E., and Schmitt, P., 2005. Customer-based brand equity in the team sport industry: Operationalization and impact on the economic success of sport teams. European Journal of Marketing, 39, 5/6, 496-513.

Brown, A., 2000. European football and the European Union: Governance, participation and social cohesion—towards a policy research agenda. Soccer and Society, 1, 2, 129-150.

 

Carter, N., 2006. The football manager: A history. Routledge.

 

Giulianotti, R., and Robertson, R., 2004. The globalization of football: a study in the globalization of the ‘serious life’. The British Journal of Sociology, 55, 4, 545-568.

 

Holt, M., 2006. UEFA, governance and the control of club competition in European football. Football Governance Research Centre, Birbeck University.

 

Krabbenbos, T., 2013. Commercialization strategies in football.

 

Peeters, T., and Szymanski, S., 2013. Financial fair play in European football, No. 2013021.

 

Slack, T. Ed., 2004. The commercialisation of sport. Routledge.

 

Sloane, P. J., 2000. Scottish journal of political economy: the economics of professional football: the football club as a utility maximiser*. Scottish Journal of Political Economy, 18, 2, 121-146.

Storm, R. K., 2011. Winners and losers in Danish football: commercialization and developments in European and Danish first-tier clubs. Soccer & Society, 12, 6, 737-753.

Watterson, J. S. (2002). College football: History, spectacle, controversy. JHU Press.

 

 

 

 

Vopel, H., 2011. Do we really need financial fair play in European club football? an economic analysis. CESifo DICE Report, 9, 3, 54-60.

 

Vrooman, J., 2007, Theory of the beautiful game: The unification of European football. Scottish Journal of Political Economy, 54, 3, 314-354.

 

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