The football industry across the UK and Europe is undergoing significant transitions. From a club’s perspective, the vision of being fan-friendly with competitively priced tickets and merchandise, hosting teams and fans in safe, environmentally sustainable stadiums and fostering community engagement, is increasingly challenged by the financial realities of the sport. Clubs aspire to build strong teams that can compete in leagues and competitions, develop talent through academies and attract lucrative sponsorship and broadcasting deals to fuel growth and profitability. However, the journey is fraught with challenges.
The Financial Reality
At the heart of every club's operation, lies the crucial element of finance. While there is substantial money within the industry, its distribution often favours a select few, leaving many clubs struggling to keep pace. Navigating this landscape requires a delicate balance between maintaining high passion for the game and achieving financial performance.
Assessing the Current Landscape
There is no magic solution or simple tweaks left to address these challenges. Clubs should take a step back and reflect on the core components that make up the beautiful game. Key areas for evaluation include player contracts, broadcasting revenue, stadium conditions and commercial partnerships. Industry reports from Deloitte, KPMG, and service providers like Turnstile offer valuable insights to help clubs assess their performance against these specific and sometimes, silo components.
Identifying Growth Opportunities
The potential for growth lies in understanding the operational links and interdependencies within the club's ecosystem. This goes beyond financial analysis to explore the day-to-day dynamics that connect different aspects of the club. Mapping these connections allows clubs to identify areas for controlled change and transformation, ensuring sustainable growth. To help navigate the landscape, a more holistic approach is needed. For this Mimo has generated such a framework, that aims to provide a map for the transformational approach. [INSERT LINK to REGISTER AND RECEIVE A DOWNLOAD OF THE SSF].
Leveraging Innovative Research and Industry Expertise
Mimo's research paper, co-written with leading UK academics in sports finance, provides a roadmap for identifying profitable growth opportunities. By strengthening the connections within the club's ecosystem, clubs can unlock new revenue streams and enhance overall performance.
For example an Innovative fan engagement that is more fan friendly. Currently, there is a strong perception of a trade-off by sports organisations to generate more revenue at the expense of fan affordability, whether it is ticket prices, refreshments or merchandise. Clubs have tried to offer fans more value with collectibles and NFTs, but this has been received by fans as exploitative. In parallel, due to the lack of affordable and configurable viewing subscriptions for fans, piracy has exceeded $28.8B. Some broadcasters have been accused of pricing fans away as they attempt to recoup their investments in the secured media rights. But what if rights holders and broadcasters could gain a share of the $28.8B? What if the un-authorised use of content that is the source of so many profitable memes could be approved and the value shared by rights holders? What if the fans could afford higher prices as they have more money, which has been generated by some of their content being bought by other fans, clubs and players? What if players could generate new income from their own media assets that could relieve some of the contractual tensions that force clubs to raise prices in the first place and allow clubs to remain aligned to key financial ratios?
Embracing the Challenge of Change
Such 'what if's' require a transformative mindset change. As Uber and AirBnB did, they unlocked transformative and more accessible inclusive value from assets that were sitting idle i.e. cars and houses when not being used. Sports clubs, broadcasters and players too have such assets sitting idle outside of the live broadcast; it is all the media content that is not shown via the primary broadcasting or social media channels. It is the content that is gathered before, during and after matches. It is content also captured by the fans. It is all the raw, genuine, authentic insights that are memorable. Collectible. Own-able. In short: Don't just license it. Don't just share it for ‘free’ on social media. Sell some of it too.
"It" equals copyright. Some say that copyright is the most precious asset and needs protection. We agree. But rather than continue to invest in controls to protect it alone, why not embrace transformational business models to unlock new value from it. Take Spotify. It was being accused of offering a pirate service, when actually its platform was designed to respond to piracy. It created a whole new economic ecosystem, made up of existing members, but configured in a different way and now all parties co-exist. Hilton and Marriott now co-exist with AirBnB. The black and yellow cabs of London and New York co-exist with Uber. And what is this approach worth? The global taxi industry before Uber was worth $100B. Uber, today is worth $100B alone. And Spotify, well it has a market valuation of $114B. So, while the path to financial stability and growth is challenging, it is not insurmountable. By taking a holistic approach and leveraging transformational insights, clubs can navigate the complexities of the football industry and achieve sustainable success.
Download the Detailed Report to Learn More
To learn more about other sports categories and to review the findings of the UK's leading sports financial academics of Rob Wilson and Daniel Plumley, please download the "Football Report".