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The Business of Soccer

Overview
Print Resources   Electronic Resources   
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Overview

Revenue System   Media and Marketing     Players

Soccer is the one sport that has overwhelming global appeal which transcends national, cultural, religious, and gender boundaries, as well as socio-economic class. Soccer's appeal continues to grow with an ever-expanding audience through out the world in both industrialized and developing countries.

Referred to as football in the rest of the world, professional soccer is truly an international sport. Estimates suggest that there are over 240 million registered players worldwide with fan participation in the billions. The Federation Internationale de Football Association (FIFA), serves as the international governing body of soccer. FIFA is composed of both men's and women's clubs from around the globe, which are organized and compete within a worldwide soccer league. Founded in 1904 in Paris France, FIFA is currently made up of 205 member associations with over 300,000 clubs and 240 million players from around the world.

Heading FIFA is the president, who is elected by the member organizations every four years. The president of FIFA serves as the legal representative of the body and officiates FIFA meetings.1 FIFA has only had eight presidents since 1904.

BERA - Business & Economics Research Advisor - A Quarterly Guide to Business & Economics Topics

Issue 3/4: Summer 2005
Updated July 2013

The Sports Industry

Table of Contents

Introduction
General Guides and E-Resources
Baseball
Basketball
Football
Golf
Soccer
Tennis

Pelé kicking soccer ball in the air, 1965
Pelé kicking soccer ball in the air, 1965
N Y World-Telegram and Sun Newspaper Photograph Collection (Library of Congress)
Reproduction number: LC-USZ62-120850

In 1954, FIFA began the creation of continental soccer (international football) confederations. A conference for Europe, the Union des Associations Europeennes de Football (UEFA) comprised of 25 member nations, was the first to be established, followed by the Asian Football Confederation (AFC). The Oceania Football Confederation was the last confederation to join FIFA, initially in 1966 and then becoming a fully sanctioned member in 1996.2 All member nations clubs within each confederation compete for the World Cup, the championship trophy awarded to the best soccer team in the international league. There is both a Men's and Women's World Cup competition. Currently, FIFA is divided into six confederations:

  • Asian Football Confederation (AFC)
  • Confederation Africaine de Football (CAF)
  • Confederation of North, Central America and Caribbean Association Football (CONCACAF)
  • Confederacion Sudamericana de Futbol (CONMEBOL)
  • Oceania Football Confederation (OFC)
  • Union des Associations Europeennes de Football

Each confederation is responsible for governing the games of its member countries according to FIFA rules and regulations. Although FIFA is responsible for regulating competition, games and players, individual countries and confederations are allowed some autonomy.

In looking at the confederations, the AFC is made up 45 member nations; the CAF, 52 member nations; CONCACAF, 35 member nations; OFC, 11 member nations; and UEFA, 51 member nations.

FIFA Revenue System

FIFA functions as a non-profit organization with an annual income over US $700 million. According to FIFA's 2012 financial report, total revenue for 2012 was USD 1,166 million with event related revenue being USD 1,108 with most of that coming from TV broadcast rights and advertisements for the World Cup™. The sale of licensing rights generated USD 23 million.3 Annual budgets are submitted to the FIFA Congress for approval each year and are considered cash budgets. These budgets include FIFA expenditures consisting mostly of operational costs and competitions, contributions to players, the confederations, and FIFA development programs.

During the first 20 years of FIFA's existence, it generated annual revenue of approximately CHF (Swiss Franks) 500-1,300, which consisted mostly of subscriptions from its associations and game levies, as well as increasing revenues from the World Cup™.4 By 1970 FIFA's revenue had increased to CHF 1.5 million. After 1982, FIFA expanded its commercial ventures including advertising and merchandising with the most significant increases in TV and marketing rights for the 1998, 2002, and 2006 editions of the World Cup.5 The 2010 FIFA World Cup™ (South Africa) generated total revenue of USD 3,655 million while figures.6 The revenues generated by TV and marketing continue to increase over time.

FIFA's 2003 financial report shows fundamental changes in the way the Federation is now funded. In 1930, 85% of FIFA's funding was from its associations in the form of subscriptions and game fees. However, by 2002 less than 1 % of FIFA's revenue came from the associations. The Federation receives a portion of the gross receipts from "A" matches or games played between national teams. This amount is determined by the Federation.

In looking at FIFA's revenue growth, in 1989 FIFA's revenue totaled nearly CHF 10 million; by 1997 it had increased to CHF 33 million. After that period, revenue jumped to CHF 389 million in 1998 and to CHF 963 million in 2002 and it continues to grow.7 This growth was due to TV rights and marketing for the World Cup™. This has transformed FIFA from an organization that was initially funded by its associations to a league that now funds its associations and confederations through successful commercial marketing and TV contracts.

Media and Marketing

FIFA's largest revenue generator is the broadcasting of the World Cup™. Europe and the U.S. are the two largest markets in generating revenue from television broadcasting rights of the World Cup™. The 2010 World Cup generated total revenue of USD 3,655 million for FIFA (excluding ticketing revenue) and incurred total expenses of USD 1,298 million. The sale of TV rights of USD 2,408 million, marketing rights of USD 1,072 million, hospitality rights of USD 120 million and licensing rights of USD 55 million.8

The World Cup™continues to be the principal source of revenue production for the Federation. It is also the most widely viewed sporting event in the world. The cumulative audience watching the 25 game day 2002 World Cup™, reached a total of 28.8 billion viewers making it the most widely covered and viewed event in television history. In 1996, FIFA agreed to a new World Cup™ media rights contract for the 2002 and 2006 World Cup event, which was worth approximately US $1.3 billion. The cost of the World Cup™ TV licensing rights agreement is expected to continue rising in the coming years, creating increasing revenue growth opportunities for the Federation.

The Internet is also playing a role in the growing popularity of soccer. FIFA's official World Cup™ web site reached an unprecedented number of viewers registering over 2 billion worldwide. No other sports web page has approached anywhere near this level of global viewership. FIFA has also begun to utilize the Internet for its marketing strategies through selling and promoting game tickets and other Word Cup™ marketing products.

Players

The 300,000 soccer clubs worldwide are comprised of 240 million players, 30 million of which are women. The salaries of these players vary dramatically. Some players are paid millions of dollars, while others are paid very little. European players are the most highly paid; however, salary distribution and management varies from club to club, association to association, and from confederation to confederation. For instance, player salaries of many UK soccer clubs account for nearly 60% of club revenues, while the U.S. Major Soccer League (MLS) institutes a player salary budget for each club.

The U.S. Major Soccer League is a member of FIFA. The MLS operates as a single entity, which contracts players with the league rather than individual MLS teams. Each MLS team is given an annual salary budget and is required to manage the roster salaries according to the team budget. Major League Soccer Players Union (U.S.) has published salary information on individual players since 2007 on their web site but coming up with league totals is more of an issue.

In the European premier leagues, total wages and salary costs for the 'Big Five' exceeded £5.6 billion in 2010/11 while their total revenue was £8.6 billion, a 2% increase over the previous year with the Premier League accounting for £2.5 billion. The Premiership club's total wage cost was £1,771m in 2010/11 (over £600m higher than the next league).9

Like many other professional sports, free agency has resulted in the dramatic increase in player salaries and fees paid for player contract purchases. This has led to growing income disparities between wealthy and poorer soccer clubs. The vast difference in salaries between the new FIFA member clubs and the older more established soccer clubs has created a rapid outflow of talent to the higher paying soccer communities increasing the player talent gap. FIFA also contributes funding for player salaries as well as contributing a small amount towards teams and participants. The players and teams participating in the World Cup receive the majority of their additional earnings from the World Cup matches rather than the through FIFA contributions.


1 Kagan's the Business of Soccer (Carmel CA: Paul Kagan Associates, 2000), 32.

2 Ibid., 34.

3FIFA Financial Report, 2012 (Paris: FIFA Congress, May 2013), 16. Available at http://www.fifa.com/aboutfifa/officialdocuments/doclists/financialreport.html External Link

4 FIFA Financial Report, 2003 (Paris: FIFA Congress, May 2004), 39. Available at http://www.fifa.com/aboutfifa/officialdocuments/doclists/financialreport.html External Link

5 Ibid., 39

6 FIFA Financial Report, 2010 (Paris: FIFA Congress, May 2011), 36. Available at http://www.fifa.com/aboutfifa/officialdocuments/doclists/financialreport.html External Link

7 FIFA Financial Report, 2003 (Paris: FIFA Congress, May 2004), 39. Available at http://www.fifa.com/aboutfifa/officialdocuments/doclists/financialreport.html External Link

8 FIFA Financial Report, 2010 (Paris: FIFA Congress, May 2011), 36. Available at http://www.fifa.com/aboutfifa/officialdocuments/doclists/financialreport.html External Link

9 Annual Review of Football, 2012 - Highlights (Deloitte & Touche), available at: http://www.deloitte.com/view/en_GB/uk/industries/sportsbusinessgroup/sports/football/annual-review-of-football-finance/External Link

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Selected Print Resources

Barros, Pestana Carlos, and Muradali, Ibrahimo. Transatlantic Sport: The Comparative Economics of North American and European Sports. Cheltenham, UK; Northhampton, MA: E. Elgar, c2002. 222 p.
LC Call Number: GV716 .T73 2002
LC Catalog Record: 2002070029

This book consist of a compilation of essays on the economics of sports and attempts to highlight both the similarities and differences in North America and Europe, as well as their implications for economic, policy and social issues.

Dobson, Stephen. The Economics of Football. New York: Cambridge University Press, 2001. 458 p.
LC Call Number: GV943.3 .D63 2001
LC Catalog Record: 2001018128

"This text presents a detailed economic analysis of football at club level, using a combination of economic reasoning and statistical and econometric analysis. The first economic analysis of the professional football industry. Presents original research and existing literature." Synopsis by Books In Print.

FIFA World. A publication of the Federation Internationale de Football Association. Zurich: The Federation.
LC Call Number: GV942 .F54
LC Catalog Record: 2009215168
Online version External Link

FIFA's official magazine, which includes articles on the latest soccer news and stories, interviews, and information on the World Cup.

Garland, Dominic Malcolm, and Rowe, Michael. The Future of Football: Challenges for the Twenty-First Century. London; Portland, OR: F. Cass, 2000.
LC Call Number: GV943.9.S64 F89 2000
LC Catalog Record: 00029442

The contributors to this volume in the Sport in the Global Society Series examine the state of contemporary football and offer their thoughts on the possible directions that the game might take in the future. The book covers a range of issues which players, fans and administrators will have to confront. This study also looks at the impact of global marketing industries, shareholding and the financial powers of mass media. Synopsis by Books In Print.

Hamil, Sean. The Changing Face of the Football Business. London: F. Cass, 2001. 121 p.
LC Call Number: GV944.G7 C43 2001
LC Catalog Record: 00011683

The contributors to this study investigate the origin and development of the movement to increase supporter involvement in the running of football clubs. This examination of changes taking place in the world of football focuses on its growing commercialization.

Hoffman, Robert, and Ging, Lee Chew. "The Socio-Economic Determinants of International Soccer Performance." Journal of Applied Economics, Vol. 5, No. 2 (November 2002), 253-272.
http://www.cema.edu.ar/publicaciones/download/volume5/hoffmann.pdf External Link [PDF: 73KB / 30p.]
LC Call Number: HB1 .J548
LC Catalog Record: 99110980

This paper studies regression results identifying the variables influencing a country's performance in international soccer games. The authors indicate the results reveal that economic, demographic, cultural and climatic factors are important.

Horne, John. Football Goes East: The People's Game in China, Japan and Korean. London; New York: Routledge, 2004.
LC Catalog Record: 2004046841

This text looks at the development of football as a major participatory sport in Japan, Korea and China. It analyzes the complex relationship between sport, culture, society and economy in the East. Synopsis by Books In Print.

Kagan's the Business of Soccer. Carmel, CA: Paul Kagan Associates. (Annual)
LC Call Number: GV943.3 .K34
LC Catalog Record: 2001207081

An annual publication that serves as a comprehensive source covering the commercial and economic aspects of professional soccer. The publication includes, fundamental business of soccer teams, a snapshot of the soccer industry, soccer's international sanctioning body and its organizations, soccer in the United Kingdom, as well as information on players and the media.

Kuper, Simon. Soccernomics : Why England Loses, why Germany and Brazil Win, and Why the U.S., Japan, Australia, Turkey and Even India are Destined to Become the Kings of the World's Most Popular Sport. New York : Nation Books, c2009.
LC Call Number: GV943.9.S64 K88 2009
LC Catalog Record: 2009023502

This book uses statistics, economics, psychology and intuition to understand the game of soccer and the development of the sport as a worldwide business. A 3rd edition is scheduled to be released in 2014.

McGill, Craig. Football, Inc.: How Soccer Fans are Losing the Game. London: Vision, 2001.

Looking at the changing role of referees and players, the media and how it influences the game, the politics of football and the international game, Football Inc. is a revealing and comprehensive account of the state of British football today.

Morrow, Stephen. The People's Game?: Football, Finance, and Society. Hampshire; New York: Palgrave MacMillan, c2003.
LC Call Number: GV943.3 .M67 2003
LC Catalog Record: 2003062242

Stephen Morrows examines the changing face of soccer, looking at issues such as the role of the stock exchange, the stakeholder approach, the Anew economics@ of soccer including the role of media firms.

Szymanski, Stefan and Andrew Zimbalist. National Pastime : How Americans Play Baseball and the Rest of the World Plays Soccer. Washington, D.C. : Brookings Institution Press, c2005.
LC Call Number: GV716 .S99 2005
LC Catalog Record: 2005001160
Table of Contents

This book compares the histories and institutional structures of baseball and soccer, the major sport in the rest of the world. It also looks at how the organizers of baseball and soccer have learned from each other in the past and will likely do so in the future.

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Electronic Resources


Papers and Reports
Official Soccer League Web Sites   Professional Soccer News
Interviews

Papers and Reports

Deloitte Annual Review of Football Finance. Deloitte LLP (Sports Business Group).
http://www.deloitte.com/view/en_GB/uk/industries/sportsbusinessgroup/sports/football/annual-review-of-football-finance/ External Link

The Annual Review of Football Finance was in its 21st year with the 2012 issue. This is a guide to European football and includes a review of the years events, a look at the financial issues, and information on how the industry has developed in that year but also looks to how the sport is likely to change in the future. Highlights are available for the most current few years.

FIFA Financial Report. Zurich: FIFA Conference.
http://www.fifa.com/aboutfifa/officialdocuments/doclists/financialreport.html External Link

The Federation Internationale de Football Association's official annual financial report that contains facts and figures. Full reports are on their website beginning in 2002. The report provides statistics and information on FIFA's income statement and budget. The report also includes annual highlights, forecasts, budget information, and a section on special topics including the Word Cup.

Football Money League. Deloitte Touche, Sports Business Group.

This is an annual publication that ranks the teams.
2013 External Link [PDF format: 949 KB / 40p.]
2012 External Link [PDF format: 2 MB / 44p.]
2011 External Link [PDF format: 2.48 MB / 44p.]
2010 External Link [PDF format: 7.5 MB / 44p.]
2009 External Link
2008 External Link [PDF format: 3 MB / 40p.]
2007 External Link [PDF format: 2.6 MB / 34p.]
2006 External Link [PDF format: 3 MB / 28p.]
2005 External Link [PDF format: 1.43 MB / 26p.]

Haan, Marco, and Koning, Rudd H. Market Forces in European Soccer. 7th December 2001. University of Gronigen, Economic Paper.
http://ccso.eldoc.ub.rug.nl/root/2002/200211/ External Link [PDF: 310.2 KB / 31p.]

This paper studies the effects regarding player-labor market changes on national and international competitions from both a theoretical and an empirical perspective. The authors attempt to show that the competitive balance in national competition has not been affected.

Jones, Dan, and Boon, Jerry. Annual Review of Football Finance 2004. Manchester: Deloitte & Touche Sport, 2004. 68 p.
http://www.deloitte.com/dtt/article/0,2297,sid%253D2855%2526cid%253D56148,00.html External Link

An annual publication that provides an overview of football finances for Europe's premier leagues. It includes analysis and statistics on the Profitability of English clubs, Player costs - wages and transfers, Stadium development, Financing the clubs, and Football tax information.

Rockerbie, Duane W. The Economics of Professional Sports. Lethbridge, Alberta: Department of Economic, University of Lethbridge, 2009.
http://classes.uleth.ca/201103/econ2120a/SportsText.pdf External Link [PDF: 1.49MB / 172p.]

This study examines the unique characteristics of the professional sports leagues, how they operate and what distinguishes the sporting industry from other industries. Also discussed, are the industries that rely on the professional sports industry, such as print media, national, local and cable networks, food services, marketing, construction, transportation, and other spin off industries.

Stefan Szymanski, PhD
http://ideas.repec.org/e/psz8.html External Link

Dr. Szymanski is the Stephen J. Galetti Collegiate Professor of Sport Management who writes regularly for Forbes External Link and The Guardian on the business and economics of sports. His articles include: "A Theory of the Evolution of Modern Sport," Working Papers 0630, International Association of Sports Economists & North American Association of Sports Economists and "Why Have Premium Sports Rights Migrated to Pay-TV in Europe but not in the US?," IASE Conference Papers 0308, International Association of Sports Economists. He has also written the books Handbook on the Economics of Sport (2005), Playbooks and Checkbooks : An Introduction to the Economics of Modern Sports (2009), and The Comparative Economics of Sport (2010). He also wrote Soccernomics with Simon Kuper.

Interviews

Sports Byline USA, Interviews with sports figures.
From the Sports Byline USA Collection
Motion Picture, Broadcasting, and Recorded Sound Division.
Digital ID: http://www.loc.gov/item/sports000015

Includes over 6,400 interviews with athletes, coaches, trainers, managers, owners, writers and others in the areas of baseball, football, basketball, hockey, soccer, tennis, golf, track and field and other sports. For the full collection of interviews, contact the Recorded Sound Reference Center.

Official Soccer League Web Sites

The Web sites listed below are the official sites for professional soccer leagues and the international governing body of world soccer, including its organizations and associations. Each web site contains links to official team home pages, league team sites, team rosters, depth charts, game schedules, league news, as well as statistics and scores. The FIFA web site provides links to its official financial reports and magazines.

FIFA, Federation Internationale de Football Association
http://www.fifa.com/ External Link

FIFA Confederations Homepage
http://www.fifa.com/aboutfifa/organisation/confederations/index.html External Link


FIFA Word Cup
http://www.fifa.com/worldcup/index.html External Link

Major League Soccer Players Union (U.S.)
http://www.mlsplayers.org/salary_info.html External Link

Premier League.com, European Soccer League
http://www.premierleague.com/ External Link

U.S. Major League Soccer (MLS)
http://www.mlssoccer.com/ External Link

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Professional Soccer News

This list of media sources provides links to the professional soccer homepages. The Web site includes: league news & analysis; team news; player links; scores & statistics; video and other multimedia links.

BBC Sport Football
http://news.bbc.co.uk/sport1/hi/football/default.stm External Link

CBS SportsLine.com Soccer
http://news.bbc.co.uk/sport1/hi/football/default.stm External Link

ESPN Soccernet.com
http://soccernet.espn.go.com/ External Link

Eurosport
http://www.eurosport.com/ External Link

FOX Sports.com
http://msn.foxsports.com/soccer External Link

SI.com Soccer, Sports Illustrated
http://sportsillustrated.cnn.com/soccer/wires/ External Link

Soccer America.com
http://www.socceramerica.com/ External Link

Soccer Times
http://www.soccertimes.com/ External Link

USA Today Soccer
http://www.usatoday.com/sports/soccer/front.htm External Link

Yahoo! Sports World Soccer
http://sports.yahoo.com/sow External Link

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Library of Congress Catalog Searches

Additional works on professional soccer business in the Library of Congress may be identified by searching the Online Catalog under appropriate Library of Congress subject headings. Choose the topics you wish to search from the following list of Library of Congress subject headings to link directly to the Catalog and automatically execute a search for the subject selected. Please be aware that during periods of heavy use you may encounter delays in accessing the catalog. For assistance in locating the many other subject headings which relate to the soccer business, please consult a reference librarian.

Last Updated: 07/09/2013

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