1. Introduction
It is widely considered that competitive balance between every teams is always a significant parameter to measure whether a league is success or not, because the result will be more uncertain and therefore the match will be more interesting (Szymanski & Kesenne, 2004). It seems that a football team which wants to be successful would continuously increase its competitive strength. Partech (2009) 英國(guó)dissertation網(wǎng)pointed out when the successful team won more and more bonuses, it was able to invest more funds to strengthen the athletics level, and thereby, it could obtain greater success in the future. There are not all of the clubs are able to obtain high bonuses from their league. Therefore, commercial operations may have become one of the primary sources of revenue in numerous football clubs. However, not every football team has excellent business models. Capling (2004) has warned that many football teams are facing serious financial problems in the world. In fact, in all professional sport clubs and football clubs as well, revenue has become a common issue for both club officials and supporters. This study explored various operation models for football clubs which based on the different sources of revenue.
3. Aims and Objectives
The original purpose of the dissertation was to examine specific parameters of the football industry in European. The specific parameters addressed were the financial situation of the top football clubs, the competitive balance of the top 4 national league in European, and management practices in the football industry.
3.1 Key factor
The dissertation examines specific parameters of financial situation in the top football clubs main according to various sources of revenue in football clubs. The sources of revenue include TV broadcast rights, matchdays revenues, commercial activities and player transfers, which are all important components for club’s revenue.
3.1.1 TV broadcast rights
Lee & Chun (2002) found that: “Sport and television coexist in a high-priced equation.” The English Premier League earned more than £2.7billion from TV broadcast rights in the three years beginning 2006-2007 Season (BBC News, 2007). Szymanski (2001) noted that the broadcasting revenue in England is divided into three parts: half of the revenue is equally divided between twenty clubs; one quarter is divided between clubs based on their final ranks and another quarter is for the cost of equipment maintenance. Therefore, TV broadcast rights is one of the most important sources of revenue for professional sport clubs.
3.1.2 Matchdays revenues
Hanson & Gauthier(1989)noted earlier studies showed that there are four main factors pricked people on go to the stadium: economics, demographics, game attractiveness, and other factors. The stadium facility and capacity are also important factors of decision tickets income. Hawkins (2008) said that capacity of a stadium plays an important role in determining average attendance. His report show that, moving to a new stadium which has enough capacity can help the club increase matchdays revenue. Lee & Chun (2002) found that Increasing luxury suites are already seen as an indispensable strategy in most stadium redevelopment and construction project.#p#分頁(yè)標(biāo)題#e#
3.1.3 Commercial activities
Commercial activities have become an indispensable part of profession team sport. Ozanian (1994) discussed that profession team sport franchises are valued on revenue compared to finance which emphasized on cash flow and assets. Commercial activities are main source of revenue except athletics revenue. There are a large number of people enjoyed in the commercial activities of professional sport team in the world. Commercial activities main include advertising (Lee & Chun, 2002), sponsorship (Kartakoullis & Theophanous, 2009), named after corporations (Spangler, 2006) and so on.
3.1.4 Player transfers
Player transfers’ fees are extra revenue which mainly determinate by ability of the player. Lee & Chun (2002) pointed out that the most basic principle of professional sports is buying and selling goods, services, and labour. Tervio (2006) explained that transfer fees are paid for the player when he or she wants to stop the contract and transfer another club. In the research, he also discussed that there are some clubs which emphasize on invest young gifted players aim obtain valuable transfer fees from these players. In his opinion, in order to prevent player prematurely transfer, these clubs will offer a long-term contract to young players generally.
3.2 Aims and Objectives
The previous literatures have provided us with some valuable insights into the nature of professional football team sports. Competitive balance determines whether a football league is able to attract more fans or not; Clubs’ revenue determine whether a football is able to compete with other teams; the four main sources of revenue determine whether a club has a good financial situation or not. Therefore, the sources of revenue include TV broadcast rights, matchdays revenues, commercial activities and player transfers are very significant parameters for professional football system. However, further researches are needed due to the limitation of previous researches. There has been extensive research regarding one of the four main sources of revenue how to influence the football club respectively, but there have been few studies explore interactions amongst these sources of revenue. There are more than more than 3 million registered football clubs in the world. Every football club emphasize particularly on different model in earning revenue among these four main sources. Various clubs emphasized on different sources of revenue or sources combination, we can regard as there are various operation strategies among numerous clubs. We can attempt to analyse these parameters of the four sources in clubs so that finding out these various operation strategies. Therefore, aims of the dissertation are:
? Examining specific parameters of the four main sources of revenue in typical football clubs.
? Exploring the interactions amongst the four main sources of revenues.
? Summarising different operation strategies in general football clubs.
? Comparing and contrasting operation strategy in top European football league and in famous American sport associations so that finding out deficiencies of European football system.#p#分頁(yè)標(biāo)題#e#
4. Methodology
A combination of methods has been used to gather the material required to analyze these operation strategies of clubs in European. They are:
4.1 Information collection
Due to the theory of sources of revenue in clubs and the nature of my research objective, there is not much information widely availed in textbooks. Therefore, my research is mainly based on websites and library databases to obtain online academic journal articles, magazines related to football operation strategies. All related data was collected from the Union of European Football Associations, BBC Sports, and Deloitte Football Money League. The task of collecting information for the football clubs was not as hard. The difficulties are initially predicted, as this has been already done by Deloitte Football Money League.
4.2 Case study on the football system in European
A review of literature suggests that there are many factors influencing football clubs revenue. Kartakoullis & Theophanous (2009) said it is evident that primary sources of football clubs revenue involve ticket income for home matchdays, TV broadcast rights and commercial activities. Various clubs emphasized on different sources of revenue or sources combination, we can regard as there are various operation strategies among numerous clubs. Therefore, the sources of revenue in football club as important parameters for influencing club’s operation strategies.
4.3Typical samples analysis
This study has chosen four football clubs as the main research samples, which ranks the 10 biggest football clubs in the world based on revenue. They are AC Milan, Arsenal, Real Madrid and Bayern Munich which are not only super clubs in top 4 leagues in Europe respectively, but also they are typical representative in four different operation models. The important parameters of revenue for these four football clubs will be examined by this study.
4.4 Statistical Analysis
SPSS 分析 ••• 數(shù)據(jù)無(wú)
4.5 Data and Information
Some certain area of data has been outlined which the study needed initially, however, following the development of dissertation itself, more detailed and systematic data will be desired.
Rank Club Revenue
(million) Country
1. Real Madrid €351.0 Spain
2. Manchester United €315.2 England
3. Barcelona €290.1 Spain
4. Chelsea €283.0 England
5. Arsenal €263.9 England
6. AC Milan €227.2 Italy
7. Bayern Munich €223.3 Germany
8. Liverpool €198.9 England
9. Internazionale €195.0 Italy
10. Roma €157.6 Italy
Table 1. Rankings for the 2006–07 season the 10 biggest football clubs in the world based on revenue
Source: Deloitte Football Money League 2008
According to the ‘Deloitte Football Money League 2008’, four football clubs which were chosen by the study as the main research objects all have excellent performances in earning broadcasting revenue from national leagues and The European Champion league in total (See the four clubs broadcasting revenue in table 2). And AC Milan got a stunning success with the broadcasting revenue in excess of £100 million. Bayern Munich obtained £41.2 million, the least broadcasting revenue of the four clubs.#p#分頁(yè)標(biāo)題#e#
Rank Club Broadcasting Revenue
(million) Country
1. AC Milan €153.6m (£103.4m) Italy
2. Real Madrid €132.4m (£89.1m) Spain
3. Arsenal €65.8m (£44.3m) England
4. Bayern Munich €61.2m (£41.2m) Germany
Table 2. The four clubs broadcasting revenue in 2006–07 Season
Source Deloitte Football Money League 2008:
According to the ‘Deloitte Football Money League 2008’, Arsenal’s matchdays revenue reached amazing £90.6 million which is accounting 51% for their total revenue, when they moved into the new stadium in the first season. AC Milan obtain the least matchday Revenue in four clubs, only has £19.3 million (See table 3).
Table 3. The four clubs’ matchday Revenue in 2007
Rank Club Matchday Revenue
(million) Country
1. Arsenal €134.6m (£90.6m) England
2. Real Madrid €82.2m (£55.3m Spain
3. Bayern Munich €54.9m (£37.0m) Germany
4. AC Milan €28.6m (£19.3m) Italy
Source: Deloitte Football Money League 2008
According to the ‘Deloitte Football Money League 2008’, Arsenal’s matchdays revenue reached amazing £90.6 million which is accounting 51% for their total revenue, when they moved into the new stadium in the first season. AC Milan obtain the least matchday Revenue in four clubs, only has £19.3 million (See table 3).
Rank Club Commercial Revenue
(million) Country
1. Real Madrid €136.4m (£91.8m) Spain
2. Bayern Munich €107.2m (£72.1m) Germany
3. Arsenal €63.5m (£42.7m) England
4. AC Milan €45.0m (£30.3m) Italy
Table 4. The four clubs’ Commercial Revenue in 2007
Source: Deloitte Football Money League 2008
http://www.mythingswp7.com/Thesis_Tips/Proposal/In total commercial revenue of the four clubs, Real Madrid earned £91.8 million in commercial activities, which is accounting 39% for their total revenue. AC Milan obtained the least commercial revenue in four clubs well in excess of £30 million (See table 4).
Table 5. Top 9 the highest player transfers
Source: Deloitte Football Money League 2008
Rank Player From To Transfer Fee Year
1. Cristiano Ronaldo
Manchester United
Real Madrid
€ 93.1m(£80.0m)
2009
2. Zlatan Ibrahimovi?
Internazionale
Barcelona
€ 69.0m(£60.7m)
2009
3. Kaká
Milan
Real Madrid
€ 65.1m(£56.1m)
2009
4. Zinédine Zidane
Juventus
Real Madrid
€ 78.0m(£45.0m)
2001
5. Luís Figo
Barcelona
Real Madrid
€ 58.5m(£37.0m)
2000
6. Hernán Crespo#p#分頁(yè)標(biāo)題#e#
Parma
Lazio
€53.6m(£35.5m)
2000
7. Gianluigi Buffon
Parma
Juventus
€ 49.2m(£32.6m)
2001
8. Robinho
Real Madrid
Manchester City
€49.0m(£32.5m)
2008
9. Christian Vieri
Lazio
Internazionale
€ 48.3m(£32.0m)
1999
In the four clubs, AC Milan earned £56.1 million from kaka transfer to Real Madrid in the summer of 2009. Real Madrid got £32.5 million from Robinho transfer to Manchester City.
5 Proposal plan
5.1 Proposal chapter plan
1. Introduction
2. Literature Review
3. Methodology
4. Result
5. Discussion
6. Conclusion
(The particular plan see Appendix I)
5.2 Timescale
See Appendix II
5.3 Problem statement
Firstly, Due to the theory of sources of revenue in clubs and the nature of my research objective, there is not much information widely availed in textbooks. Therefore, my research is mainly based on websites and library databases to obtain online academic journal articles, magazines related to football operation strategies. However, there has been extensive research regarding one of the four main sources of revenue how to influence the football club respectively, but there have been few studies explore interactions amongst these sources of revenue. Secondly, this study need compare and contrast operation strategy in top European football league and in famous American sport associations so that finding out deficiencies of European football system, there are also lack of data and information of American sport associations. Therefore, during the process of find out the results I should use typical samples analysis and Statistical Analysis to obtain the results.
References:
BBC News, 2007. Available online at: http://news.bbc.co.uk/1/hi/business/6273617.stm
Boyopoulos, N. & Milakas, D. (2005) A religion without infidels – football. Athens:
Livanis A. A. Publications.
Capling, A. (2004) “It’s more than business” in Arena Magazine vol.70, pp.47-49.
Czarnitzki, D. & Stadtmann, G. (2002) “Uncertainty of outcome versus reputation: Empirical evidence for the First German Football Division” in Empirical Economics Vol. 27, pp.101-112.
“Deloitte Football Money League 2008” Available online at: http://www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/UK_SBG_FML08.pdf
Footballdatabase, 2009 Available online at: http://www.footballdatabase.com/index.php?page=player&Id=10&b=true&pn=Zlatan_Ibrahimovi?
Garcia, J. & Rodriguez, P. (2002) “The determinants of football match attendance revisited: Empirical evidence from the Spanish football league” in Journal of Sports Economics, 3/1, pp.18-38.#p#分頁(yè)標(biāo)題#e#
Hanson, H. & Gauthier, R. (1989) “Factors affecting attendance at professional sports events” in Journal of Sport Management, vol.3, pp.15-32.
Hawkins, M. (2008) “Size matters” in Deloitte Football Money League, pp.27-30.
Ingle, S. & Glendenning, B. (2003) “Baseball or Football: which sport gets the higher attendance?” Available online at: http://www.guardian.co.uk/football/2003/oct/09/theknowledge.sport
Kartakoullis, N.L. & Theophanous, A. (2009) “Important Parameters of the Football Industry in Cyprus: Challenges and Opportunities” in The Sport Journal 12/4.
Lee, S. & Chun, H. (2002)” Economic Values of Professional Sport Franchises in the United” in The Sport Journal 5/3.
Matheson, A. (2003) “European Football: A Survey of the Literature” Available online at: http://www.holycross.edu/departments/economics/vmatheso/research/soccerreview.pdf
Ozanian, M. K. (1994) “The $11 billion pastime: Why sports franchise values are soaring even as team profits fall” in Financial World 163/10, pp.50-63.
Partech, N. (2009) “Europe’s top football leagues becoming more predictable”. Available online at: http://www.chamber.ua/files/documents/updoc/tax_legal/19/PR_Football_study_2009_Eng.doc
Sage, G. H. (1998). Power and ideology in American sport: A critical perspective (2nd ed.). Champaign, IL: Human Kinetics Publishers. (Quoted from Lee & Chun, 2002)
Spangler, A. (2006) “A certain brand of soccer.” Available online at: http://www.thisisamericansoccer.com/archives/2006/03/a_certain_brand_1.html
Sugden, J. & Tomlinson, A. (2005). In Allison, L. The Global Politics of Sport – The
role of global institutions in Sport. Routledge -Taylor and Francis Group. London and New York.
Szymanski, S. & Kesenne, S. (2004) “Competitive balance and gate revenue sharing in team sports” in The Journal of Industrial Economics 52/1, pp.165-177.
Szymanski, S. (2001) “Income Inequality, Competitive Balance and the Attractiveness of Team Sports: Some Evidence and a Natural Experiment from English Soccer” in The Economic Journal vol. 111 pp.69-84.
Tervio, M. (2006) “Transfer Fee Regulations and Player Development” in Journal of the European Economic Association, 4/5, pp. 957-987.
Appendices
Appendix I - Chapter Plan
Appendix II – Timescale
Appendix I - Chapter Plan
Chapter 1: Introduction
It will briefly introduce dissertation structure, research objective, methodology and the goal I try to achieve. It will also introduce the case of football industry in European and the background of the operation strategies in football clubs.#p#分頁(yè)標(biāo)題#e#
Chapter 2: Literature Review
This chapter will cover literatures I reviewed related to some valuable insights into the nature of professional football team sports. It will focus on various sources of revenues in football clubs.
Chapter 3: Methodology
3.1 Information collection
Discuss the process of collecting information and data which involve football industry in European and American sport associations.
3.2 Case study
Case study focused on the football system in European.
3.3 Typical samples analysis
Typical samples analysis focus on the parameters of four top clubs.
3.4 Statistical Analysis
It will use Multiple Regression analysis specific explicate the interactions amongst these sources of revenue.
Chapter 4: Results
Find out the results of the interactions amongst the four main sources of revenues. Summarise the different operation strategies in general football clubs and reviewed hypotheses.
Chapter 5: Discussion
http://www.mythingswp7.com/Thesis_Tips/Proposal/Discuss the difference of operation strategies between football industry in European and American sport associations. Give some suggestions for football industry in European.
Chapter 6: Conclusion
Summarise above issues.
Appendix II - Timescale
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