How do football clubs spend their money?

With its ever-increasing popularity and fanship, football is not just a sport; it is a worldwide phenomenon. However, as much as it is a matter of passion and love for the players and the fans, it equally is a massive business for many. The overall money and transactions involved with the game of football are humongous. Famous football clubs mint money in billions and provide employment opportunities to a large amount of the population. It is well-known that the clubs earn money by selling broadcasting rights, merchandise, and sponsorships. Below listed are the areas where these clubs spend these enormous amounts of revenue.

Purchasing players and transfers

It is estimated that an average football club spends around 46% of its revenue on player purchases and transfers. The essence of football lies with top-class games, and that kind of game needs maestros playing it. Hence, not surprisingly, nearly half of all the revenue earned by the clubs is spent on players. This is the reason why top tier footballers are some of the wealthiest athletes around the globe. For an insight, La Liga club Juventus bought Ronaldo, considered the greatest football player right now, for a hefty sum of around £105 million from Real Madrid, the club he played for previously. Neymar, a Brazilian football star, was transferred from FC Barcelona to Paris Saint-Germain for around £198 million in August of 2017. This gives a pretty good idea of how significant expenditure the clubs incurs in the purchase and transfers of players.

Paying loans and interests

Nearly all the clubs have loans taken previously for various reasons. Also, some people have invested in the club. The club needs to repay these loans and interests timely. It is estimated that the clubs spend nearly 22% of their total revenue on repaying these loans and interests. To get an idea of the kind of loans these clubs take, AC Milan, an Italian football club, is in a debt of around €260 million in 2020. Valencia CF, one of Spain’s biggest clubs, has a debt of €274 million currently to be paid by it. Juventus, the La Liga club who bought Cristiano Ronaldo for a too exorbitant amount, has a loan of around €372 million to be paid as of 2020. Atletico Madrid is a Spanish club that plays in La Liga. It currently has a debt of around €384 million to be repaid. From this, it is quite evident that big, rich, and successful football clubs also have not escaped the cycle of debt.

Salaries

As stated above, football clubs employ a lot of people in various fields. Salaries are needed to be paid to these people timely. These people include famous and influential people like the coaches and the managers, along with other small employees of the club.

Capital Expenditure

It is estimated that football clubs spend around 19% of their revenue on building stadiums, training circuits, and similar infrastructure, that can be included in capital expenditure.

Conclusion

Maintaining a football club is a tricky business. While the hefty amounts that these clubs earn are visible to the public, not many people are aware of the expenditure they need to incur.