Football is big business
The Premier League and its clubs add £3.4bn to the UK’s GDP and pays £2.4bn in taxes to the UK government. Tourists attending football matches in the UK bring another €490m into the economy every year.
A whole industry has been built around footballers and their clubs that includes agents and lawyers, PR and accountancy. Tax issues alone can affect where footballers choose to play and how much they pay (or don’t pay) in taxes.
Like many business, a significant percentage of football clubs’ expenditure goes on salaries. UK Premier League clubs and their supply chains support over 100,000 full-time jobs but their wages are a fraction of those paid to players. It’s no coincidence that the highest-paid footballers in 2015 played for the world’s richest clubs.
There is much criticism of the level of dividends paid to the shareholders of football clubs and the way the clubs’ assets are used to leverage debt to support owners’ other interests. FC United of Manchester is a fan-owned football club set up partly in protest at Malcolm Glazer’s ownership and treatment of Manchester United.
However, the world’s richest football clubs also spend their money trying to be responsible members of their sporting and local communities. This article is about how football clubs and their membership organisations spend their money being responsible citizens.
So, who are the richest football clubs in the world?
Real Madrid is the richest football club in the world for the 11th year running. Here’s the rest of the top 10 by revenue in 2014/15:
- Real Madrid (€577m)
- Barcelona (€560.8m)
- Manchester United (€519.5m)
- Paris Saint-Germain (€480.8m)
- Bayern Munich (€474m)
- Manchester City (€463.5m)
- Arsenal (€435.5m)
- Chelsea (€420m)
- Liverpool (€391.8m)
- Juventus (€323.9m)
A record 17 of the top 30 are English Premier League football clubs.
Commercial revenue is still the highest percentage of each club’s income, followed by broadcast income then matchday revenues. However, Real Madrid, as the richest club, has a more even balance of all three income streams.
Football is good business
The need for corporate responsibility
Football reaches massive global audiences and has the means and the potential to promote positive messages to those audiences. However, because we crave scandal and salaciousness, the media tends to focus on stories of bad behaviour.
Football is also attractive to young people and many see footballers as role models, so has the power to be a positive influence in their lives, to offer opportunities and to promote responsible behaviour.
Football clubs are under increasing pressure to demonstrate that they’re a responsible member of the community, whether it’s to retain the ongoing engagement of their supporters or to gain the support of the local community when applying for planning permission to build new grounds.
According to research from Birkeck, University of London, 56% of european football clubs report a formal CSR strategy and 53% have an individual dedicated to working on corporate responsibility activities.
Corporate Responsibility in governing bodies
As leaders in the industry, football’s governing bodies promote social responsibility to their members. It’s a requirement of membership of UEFA to have a youth development programme in place, policies to tackle anti-discrimination and promote equality and an appointed disability access officer.
Additionally, governing bodies have their own social responsibility. Organising large scale football events such as EURO 2016 and The World Cup can have huge impacts on communities, economies and the environment.
Jacques Lambert, president of EURO 2016 SAS states “A coherent policy of social and environmental responsibility is an integral part of the organisation of major sporting events. It is not a luxury, much less a gadget but a civic responsibility and has now become an operational requirement as much as safety, marketing or ticketing sales.”
UEFA has worked with Climate Friendly to develop the UEFA EURO 2016 Eco-Calculator, enabling fans to explore how their journey to the tournament contributes to greenhouse gas emissions and offset their emissions.
UEFA’s programmes include fighting racism and discrimination, promoting health and exercise and supporting the Homeless World Cup. In 2013/14, its €4.5m budget on corporate responsibility was spent on the following themes:
- Solidarity (€1.8m)
- Diversity (€750k)
- Inclusion (€560k)
- Dialogue (€405k)
- Peace & reconciliation (€400k)
- Environment (€350k)
- Health (€310k)
- donations to foundations & charities (€250k)
FIFA’s own social responsibility initiatives are undermined by corruption scandals and criticism of its operating practises in World Cup host countries. While they set up programmes to benefit the local community in Brazil, they lobbied to change the law (dubbed the ‘Budweiser Bill‘) to reintroduce public drinking for the benefit of key sponsors and to the detriment of public health.
Here’s John Oliver with more on the subject:
Common corporate responsibility programmes
The primary methods of delivering corporate responsibility in football include the following:
- philanthropy – according to a study in 2011, 43.9% of European football clubs make financial donations to local community projects; 31% make financial donations to local schools; and 52% donate a percentage of profits to charity.
- community involvement – including participation in programmes that help define a sense of identity or place, supporting local youth programs, employing people from the local community, supporting local homeless people, developing code of conduct charters with supporters, anti-discrimination and anti-racism initiatives, disability sports and inclusion projects, working on community projects in developing countries;
- youth educational activities – working with local schools, work experience placements, youth award schemes.
- youth health initiatives – working with youth clubs on sport and fitness programmes, setting up youth academies.
The Premier League’s Creating Chances programme invested £111m into local communities over three years, benefitting 14 million people. For every £1 it invests, it attracts £3 in match funding from government departments and other partners. It also provides over £30m of funding to support other organisations supporting people, including:
- The Football Foundation, which directs £30m every year into supporting grassroots sports, including funding facilities and equipment. They even provide emergency funds to fix problems caused by the extreme weather resulting from climate change.
- The Professional Footballers’ Association, which campaigns to protect, improve and negotiate the conditions, rights and status of all professional footballers. It’s also helping professional footballers set up their own named charitable funds to give to charity, through its Your Cause, Your Way programme.
Football clubs are also setting up charitable foundations in order to deliver their corporate responsibility programmes.
The Chelsea Foundation invested £4.9m in its community projects during the 2013/14 season, delivering programmes to 493 schools with more than 910 participating in its programmes. They deliver 500 sport sessions every week across 15 different sports other than football.
“Your Cause, Your Way” will help players create their own named charitable funds, which will be supported and administered by experts at their local community foundation. There are 48 community foundations across the UK.
A few examples
Former Liverpool player Jamie Carragher used the proceeds from his testimonial to set up the Carragher 23 Foundation, with an initial fund of over £1m to be used to for contributions to local charities, clubs and community initiatives in perpetuity. The charity has so far helped local charities including Liverpool Homeless FC and Alder Hey Children’s Hospital – the hospital where he was born and spent the first six weeks of his life.
Manchester United midfielder Juan Mata delivered toys he personally donated to Kingfisher Community Special School in Oldham and the Starlight Unit at the University Hospital of South Manchester, promoting the Spanish tradition of Los Tres Reyes Magos (The Three Kings), celebrated on 6th January by exchanging gifts to honour the role of the the Three Wise Men in the nativity.
The Arsenal Foundation has raised £1m for its global charity partner Save The Children. The partnership has helped Save the Children respond to emergencies in the Philippines, Sierra Leone, Syria and Nepal. It also supports the charity’s work in China and Indonesia helping children receive a quality education in a safe environment.
Bayern Munich will donate €1m to help Syrian refugees and will set up a football training camp as Germany welcomes refugees and increasing numbers settle in the city.
The Asian Football Confederation has teamed up with World Vision International and the Football Association of Malaysia to educate children on the importance of nutrition as well as instilling self-discipline and sportsmanship.
Most football clubs with formal corporate responsibility programmes will publish their own report, often through the charitable foundations they’ve established. If you’d like to read more about the work football clubs are doing in the community, I encourage you to read some of the reports and articles below, and to seek out your favourite club’s report.
Further reading & sources
- Deloitte Football Money League 2016
- Football and Corporate Social Responsibility, a report by Mark Panton
- Corporate Social Responsibility in European Football, a report by Dr Geoff Walters and Richard Tacon
- Jamie Carragher, Juan Mata and the charitable footballers making a difference
- How much do Premier League football clubs give to charity?
- Real Madrid: Corporate Social Responsibility Report 2014/2015
- FC Barcelona Annual Report 2014-2015
- CSR at Manchester United FC
- Paris Saint-Germain Foundation
- The work of Arsenal in the community
- Chelsea CSR Report 2013/14
- Creating Chances 2012: Using the power of football to positively change lives
- UEFA Football and Social Responsibility Report 2013/14
- European Club Association Annual Awards 2014
- European Club Association Annual Awards 2015