Marketing Football Clubs: Current Practices and Key Success Factors

This project is about the industry of football, with particular reference to European football clubs and how they make use of the management and marketing tools at their disposal.
In recent years, the world of football has been referred to more and more as an industry, and indeed its characteristics have been getting closer to those of the entertainment industry: people worldwide choose indifferently whether to go to the cinema, to an amusement park, or to the stadium to watch a Football match.
The rank of football in the economy of those countries where it is the "national sport" has risen. Because of the capacity of football events to involve a considerable number of industries with its activity, today it represents a consistent percentage of nations' GDP's.
The industrialisation of football obliges the organisations within this industry to assume more and more the features of other common businesses, with professional management using the most advanced marketing tools. The broad diffusion of the internet, together with the worldwide standardisation of television and other important media, have caused the globalisation process to affect substantially the world of football. This has reflected in important changes in regulations and industry structure, which have conditioned the behaviour of football organisations.
Taking advantage of a combination of several sources, among which are books, newspaper articles, reports, working papers and interviews, I analysed sports management through the practices that are currently used in professional football clubs, highlighting how large football organisations behave in different countries and how they differ in the application of management and marketing theories. The accent has been put on European football, where this sport is followed by almost 80% of the total population.
Studies by Deloitte & Touche in collaboration with the European national football leagues demonstrate how the globalisation of the football industry has provoked a concentration of resources in the hands of a few big European clubs, which have had the ability and most of all the economic resources to face enlarged competition from foreign clubs and other businesses in the entertainment industry.
The transformation in the environment in which football organisations operate have caused changes in the key success factors. Although revenues of football clubs have grown over 60% in the last few years, cost of labour (most of which is represented by players' cost and wages) have gone up 72%. Then, if ten or even five years ago sports success was the key to popularity which brought economic success, nowadays the key success factors are not sports performance nor buying star players, but success in managing the whole set of possible economic and financial resources. More revenues bring more money to buy players, to win games, to attract more audience to gain more money to buy players, etc. In the present condition, the football industry contrasts with the fundamental principles of work ethic, which is to obtain the biggest possible result with minimum financial effort.
With the cost of labour representing 70% of total revenues, the only way left for football clubs to survive is to reduce players' costs and wages while exploiting the existing revenue sources and creating new ones. The crisis of TV broadcasters has also affected clubs policies, and where TV rights accounted for over 50% of total revenues, the situation is disastrous.
Among European countries, England is the one that has reacted best to this situation. English clubs have managed to exploit a wider range of revenue sources than their foreign rivals, which has allowed clubs such as Manchester United to absorb major losses coming from the difficulties of TV broadcasters in paying the promised incredible fees for TV rights. On the other hand, Italian clubs are suffering much more from these changes for two main reasons: 1) they do not have the professional management appropriate to such a competitive environment and 2) their revenue sources are rarely and badly diversified and, as a consequence of the first point, they are not developing alternative sources of revenues.
Basically, those clubs who have more and more stable revenue sources gain a sustainable competitive advantage over rivals and eventually survive, those who have their income and thus their destiny connected to one or a few sources are likely to have a very hard time.
At the present time, the biggest potential in Italian football is represented by: a) a wider exploitation of merchandising which represents today just 1% of a club revenues (in England it accounts for 23% of total revenues!); b) the exploitation of the club's image internationally; and c) the transformation of football stadia from match-day venues to whole-week recreational places.
In absence of these requisites, football clubs must prepare to face really difficult times, an