Football may seem like it’s awash with money, but away from the biggest clubs, most need to find new streams of revenue, says Stadia Solutions' James Cook...
Football may seem like it’s awash with money, but away from the biggest clubs, most need to find new streams of revenue.
Outside of the Premier League, where TV money provides a safety net, smaller clubs have more urgency to unlock incremental and sustainable sources of income.
As my role involves building commercial partnerships with clubs, I spend a lot of time talking to clubs of all sizes in different leagues. The more I meet, the more optimistic I feel about new commercial opportunities that can be explored, but are as yet untapped.
Take a typical lower-league club with an ageing ground in the middle of a town or city. That’s a prime piece of real estate, highly visible in the local community – most likely surrounded by passing traffic and often close to shops and public transport. Why then, are so many of these venues apparently closed for business outside of home match days? Clubs need to think how they can make their stadium pay – not just on match days, but 365 days a year.
You can see this thinking with many of the new stadia being built around the country. No new project gets off the ground unless the stadium is integrated with other revenue-generating assets – a hotel, shops, cinemas and restaurants. The modern stadium has become a multi-purpose venue that has football at its core, but plays a larger role as a focal point in the community, attracting business day after day, throughout the year.
Smaller clubs may think, “that’s fine for Roman Abramovich, but we have a 100 year-old ground where the only ‘incremental revenue’ is food and drink.”
But it’s not too late to adopt a smaller-scale version of this new way of thinking. In fact, it could be the key to keeping the club afloat in the long term.
Advertising, using screens outside the ground, is an obvious place to start. Think again about that central position the club may have in the community. Think of the traffic passing, the volume of people who see your club every day. Advertising screens on the outside of the ground – looking out into the community, as opposed to inside only – are a real opportunity. Remember, your value as an advertising medium in this context has nothing to do with your league position. It is all to do with location, position and passing eyeballs. You could be sitting on a prime piece of outdoor media.
Inside the ground, think about how you can drive new revenues on match and non-match days. When the ground is full of fans for a home fixture, concourse TV can provide an important advertising medium, but only if you add value for the fans by also providing relevant and targeted content that adds to the match-day experience.
You may not even need to buy these screens – a model whereby the advertising revenue is shared in return for installation of the hardware, is possible. The same is true for wi-fi networks, in the stadium bowl and in the hospitality areas. Wi-fi is increasingly being used as a money-making platform by sports clubs, in football and beyond, particularly in the U.S. Whether its betting or merchandise sales, engaging with fans and visitors online can enhance their experience and unlock new commercial opportunities. Up-front investment is not always necessary - there are many business models that can make it affordable and profitable.
Another key opportunity is to think about what the ground can host outside of the relatively small number of home fixtures in the football season. No asset of this size should shut its doors and go quiet for weeks and months on end. Music concerts, corporate events are just two opportunities that can be explored – think of the ground as a venue in the widest sense. And remember, that in order to attract this kind of extra business, it pays to have some attractive inventory and assets to offer – such as wi-fi or digital signage. Forward-thinking investment will help to bring the business in.
Finding these sustainable revenue streams can make all the difference for a smaller club, as it is more achievable to balance its on-pitch investment, with off-pitch income. If you have the wage bill and transfer costs of Manchester United, you’re not going to make that back with some advertising and Coldplay doing a gig in August. And in any case, the TV money is there to protect you.
However, if you’re lower league, your off-pitch income can account for a far larger share of the overall business and could perhaps balance the costs of the team on the pitch. It may not be necessary to do that much in order to find enough revenue opportunities to sustain the business for seasons to come.
None of this is easy, and every club’s situation is different. But many are so focused on the day-to-day struggles of football, that these wider possibilities are missed. As the commentators like to say, football is a game of two halves, after all.