Football is not only the world’s most popular sport but is also the most lucrative one! And, according to many commentators, has become a product in its own right.
All of this is borne out by the German Bundesliga Champions, Bayern Munich, who have just posted their best financial results ever for the last twelve months (their 2013-2014 financial year), with a turnover of £417m and a profit of £13m, putting them on the same financial level as Manchester United and Real Madrid.
These results show that they are now well on the way to achieving their aim to become the world’s richest football club by 2020 and domination of the European football scene.
In the last year, they sold 1.7 million replica shirts, which is more than all the other Bundesliga clubs put together sold during the same period. In fact, a fifth of their income comes from merchandising.
One of the reasons for their financial success is that, unlike Real Madrid, for example, Bayern Munich are not weighed down by crippling debts. As a result of a deal done with their latest investor, the Insurance Company Allianz, they have been able to repay the money owing on their stadium 15 years ahead of time.
Another reason for their strong financial position is that more than 10 years ago, the Club decided to abandon their status as an entirely-member owned club, allowing in such investors as ADIDAS and AUDI. However, they are still majority-owned by their fans. Also, a large amount of their investment goes on the footballing side – their squad is worth some £450m and their coach, Pep Guardiola, is reputedly paid £13m a year!
This financial model could well be adopted by other leading European football clubs to put them on a firmer and successful financial footing in line with the UEFA Financial Fair Play Rules, which aim to stop football clubs from living beyond their financial means.
Bayern Munich are a well-managed club and have largely their President, Karl-Heinz Rummenigge, to thank for their continuing financial and sporting success!
Prof Dr Ian Blackshaw is an International Sports Lawyer Academic and Author and may be contacted by e-mail at ‘firstname.lastname@example.org’