How to Maximize Club Capital - Essay Example

How to Maximize Club Capital - Financial Soccer Introduction Financial Soccer is a fast-paced, multiple-choice catechism game, testing player’s ability of banking administration abilities as they beforehand down field, and tries to account goals. Educators are encouraged to analysis and download the assignment modules, at right, afore absolute bold play. If you are already broiled up and accessible to play, bang the button aloft to begin.“Finance is basically the management of a huge amount of money mostly by large companies or even governments and it involves allocation of assets and liability” (Zohn 33-75). Soccer is one the most common games worldwide that is played with the feet and a ball and consists of two teams with each 11 players battling it out to score goals of which the one with most wins. They obviously follow a set of rules and regulations laid down by the worlds soccer governing body FIFA (FédérationInternationale de Football Association) whose memberships consists of 209 national associations(www.deloitte.com). Discussion Soccer is usually played for fun as a sport but when clubs are associated, this is where finance and soccer get into crossheads. Friends, workmates or just groups of people with the purpose of having fun initially formed soccer clubs but as professionalism came into play and larger numbers of crowds and fans became associated, “Soccer clubs then became considered as limited companies that can make profits and play in soccer leagues that are present all over the world” (Booth 78-90). So as we have seen soccer clubs do make profit and hereby we see the relationship between finance and soccer. Now we have to look at how these clubs generate their incomes and how they maximize on it. Most professional soccer clubs have academies where talent is nurtured from youth levels and the players get promoted to the next level as they grow up and also how good they get in the game. At one time, “most of the youth players make the first team squad but the rest who do not are usually sold to other clubs to further their careers” (http://soccerlens.com). “The club is responsible for providing all the necessary equipment needed for training of the players inclusive of gyms and fitness instructors as well as club doctors” (Walter 56-77). So how does a club earn income to carter for all of these expenses including paying the players wages. Well first we look at advertising. All professional soccer clubs have sponsors. These sponsors are mostly big companies or corporations. They give certain amount of money to the club and in return the soccer clubs put the sponsor’s name in front on their jerseys. This is a way of advertising. If we take examples of real world soccer clubs that are well known and their sponsors like FC Barcelona, Qatar Airways sponsor which is a Spanish based club, Real Madrid also Spanish club is sponsored by Emirates Airline. Emirates has also sponsored other clubs such as Arsenal FC, an English based club; AC Milan, Italian based; Paris Saint-Germain(PSG), a French based club among others. Soccer clubs can also have many sponsors, for examples the sports company that makes their jerseys and shoes. For examples Nike has sponsored FC Barcelona, Manchester United, Juventusetc while Adidas has sponsored Real Madrid, Bayern Munich, Chelsea etc. The players are also sponsored by different sports company that provide things like shoes for example, Lionel Messi (considered as the world’s best soccer player) is sponsored by Adidas. This sponsorship is separate from the clubs sponsorship. Other sponsors are like beverage companies that provide energy drinks for the players, motor companies that provide the players with luxury cars and so. All of these sponsorships earn the club a large amount of income which is used to pay the players’ wages and pay other bills. Another way of a club earning money is through the selling of players. A player that plays for a club is considered as an asset of the club and can be sold to make profits. Each player signs a contract before joining the club that contains clauses of things like the salary one would make, the number of years to be spent playing for the club, the rights the club has on the player and also the release clause of a player. The release clause contains the amount of money the club would agree to sell a player for, even if the player is not up for transfer. Most clubs put high amounts for talented players in order to discourage other clubs from making a bid for that player. “In the event a club has reached the release clause of a player, the parent club has no option but to sell the player whether they like it or not” (http://paulrobertlloyd.com). Players are usually transferred when the transfer window is open. The transfer window in Europe is usually open in summer (3 months) when the soccer leagues have finished their respective competition and during January (for just one month). During this time, “clubs through their scouts, scour for talent across the transfer market, as it is commonly referred to, and place bids for player that they are interested in” (Chingamuka 36-39). They state the amount they want to buy the player for and also communicate with the players themselves to come to an agreement with their contract. If the player agrees, then all is left is to agree with the parent club on the amount for the transfer of the player. A parent club can ask for more money for the transfer of their player, which what happens in most cases especially if the player is a star player in the team. Some clubs are forced to part with their star players for a handsome amount to keep the club away from debt. This way clubs can earn money from selling their players. A lot of profit is earned if the player came from the youth ranks in the academy or if the player was bought for a cheap amount and sold for a lot more. “A good example is the Real Madrid star Gareth Bale whose was sold for a record fee of € 91 million (euros) equivalent to $ 123 million (dollars) from Tottenham Hotspurs (an English club) where he was previously bought for € 7 million(euros) equivalent to $ 9.4 million(dollars)” (Bail 13). Selling of player jerseys is another way of making profit. Star players on the team are usually good for business because the love the fans have for them make them go and buy their iconic jersey shirts to wear and associate with them. Since the player is a property of the club, the club has rights to make any number of jerseys in the player’s name and sell them worldwide, which earn them a good amount of income. The jerseys are usually sold in outlets of the sports companies sponsoring the club, and also in the fan shops that are located in/near the club’s stadium. Also online marketing should be made available considering the fact that technology runs almost everything today. “One should be able to purchase a jersey from the click of mouse” (https://sites.google.com). Every big professional soccer club has a stadium that has the capacity of holding thousands of fans and spectators. During a match day, tickets to watch a home game are usually sold. The sales of these tickets usually generate a lot of income but most of which is used in the maintenance of the club’s stadium. The pitch should be well maintained, the seats dusted, the locker rooms should also be maintained not forgetting the electricity bill should be paid to avoid embarrassing blackout during the game. Most of these expenses can be covered by the sale of match day tickets. Now we have an idea of how soccer clubs operate and how they earn their income, now we need to see how we can maximize on this. First, we can say that getting more sponsors is one way. By having more sponsors, it means that you’ll be doing more advertising that will in turn earn you more income that will be useful to the club. Each sponsor represents a different field and this comes in handy because your club becomes popular in various fields and can even incite more and more sponsors to invest in your club. Some sponsors too come with their own customers hence this means the club will get a bigger fan base which can increase the sale of jerseys and tickets during match days. We can also maximize the income by nurturing more talent and letting them mature before selling them for huge amounts of money. “Some may not agree with this philosophy but soccer is just business and someone has to recognize this because when you’ll be languishing in debt, no one will be by your side”(http://sports.ndtv.com). Therefore academies should be taken more seriously not only to secure good players but because this is good for business. The stadiums should be increased in size to allocate more seats for fans and spectators during match days. This will consequently increase ticket sales. Also businesses such as fast food should be installed within or near the stadium to avail food and drinks for the fans. Also luxuries such as Wi-Fi should be installed to keep the fans up to date with other matches that might be going on. “The Etihad Stadium, owned by Manchester City FC based in England is one example where high speed 4G Wi-Fi internet is available” (Litchfield 212-332). Becoming competitive is another way to maximize the income. In every tournament played, there is award money that is given to clubs that qualify to certain stages for example reaching the knock-out stage, the quarter final, the semis and the final. At each level each club that qualifies for that stage earns award money. Winning a tournament is the icing on the cake since grand prize money awaits you aside from the trophy and fame it comes with. All competitions participated in earn the club money so by being competitive and qualifying for these tournaments, the club can directly become rich by just playing soccer! A club museum is good way of maximizing on capital. In the museums, trophies and honors won by the team and players individually are put on display for all to see. The club’s history and legends are also incorporated to these museums to give the fans and tourist a good view of what the club is about how it used to be in the earlier days. The museum should then have visiting hours during the day and holidays to carter for the ones who are longing to come but are often busy daily except during the holidays(www.investopedia.com). This way, capital is maximized by for displaying the clubs history and reminding the fans what the club is all about. Another good way of maximizing on capital is by renting out the stadium to outside parties that would like to use it. For example, rallies can be held at the stadium, concerts, voting and big tournaments like the Olympics or the World Cup. For events such as these, the club earns quite a lot of income. But all this should not in any way interfere with the schedule of the club’s games. Maybe it should be done in summer when all competitions are finished to ensure that renovations and repairs are made in case these events marred any part of the stadium. Conclusion In conclusion, it has been clearly seen how financing and soccer get along really well. All you need is information from both and merge them into one to get what you want. Many top soccer clubs are valued as the some richest clubs in the world that generate a lot of income and earn a lot of profit. This is because of the vast knowledge contained on how to do business by the people who own and control the clubs (www.emirates.com). It should not be confused that although the club aims at making money, the soccer philosophy should also be upheld. Soccer is a game that brings together many a people, who are different in almost every aspect, and it has done so for many years and for many years to come it should be left to continue doing so. Works Cited Booth, Douglas.The race game: sport and politics. Sport inthe global society, [4]. London: F. Cass, 2008, pp 78-90. Chingamuka, Saenna. Changing society‘s cultural mindset in and throughFIFA 2010 World Cup‖ inGender, media and sport; edited by DeborahWalter. (Johannesburg: Gender Links, 2009): 36-39. Litchfield, Eric.Cape Town City. Cape Town: Howard Timmins, 2002, pp 212-332. Walter, Deborah.Gender and soccer 2010. Johannesburg: Gender Links,2010, pp 56-77. Zohn, Ethan, Rosenberg, David, and Braley, Shawn. Explore the world through soccer.Nomad Press, 2010, pp 33-75. Bail, Gareth. Goal, 2013, Retrieved on November 19, 2013; from http://www.goal.com/en/people/wales/13913/gareth-bale?ICID=AR#p Madrid. Gareth Bale transfer cost Real Madrid 91 million euros: Club president, 2013, Retrieved on November 19, 2013; fromhttp://www.goal.com/en/people/wales/13913/gareth-bale?ICID=AR The Weekly Pay. 2013. 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Retrieved on November 19, 2013; from http://www.deloitte.com/view/en_GB/uk/industries/sportsbusinessgroup/sports/football/deloitte-football-money-league/ Read More