How smaller market teams are starting to compete financially

In every professional sport, there is no denying that there are a discrepancy and a gap between teams. This divide can often be classified as “big-market teams” and “small-market teams”. Big-market teams are often classified as those who are stationed in popular places. For instance, a big market team in the sport of soccer would be the likes of FC Barcelona, Real Madrid, Manchester United, etc. The advantage of being a big-market team is the fact that they are able to attract more star players primarily because of location and their financial capacity. This has resulted in the dominance of these big teams in their respective leagues; however, over the years, there seems to be a trend towards smaller market teams being able to afford bigger players. This trend is possible due to a number of soccer business investments that these owners make.

One of the main sources for this increase in revenue among smaller-market teams is the increase in TV broadcast and commercial revenue. It pays to be broadcasted and aired on live television, therefore, the more a team gets streamed, the more money they earn. Back in the 2018/2019 Premier League season, the Premier League was able to earn a total of 2.5 billion euros. This staggering amount of money was divided among the 20 top-flight teams, and the teams were promised 50% of the total to be equally split among all of them. This gave an opportunity to smaller clubs to gain more financial capacity. The more access to money, the greater the access to signing a big player. One instance of this is seen through the club Wolverhampton Wanderers, otherwise known as, “Wolves.” Shortly after the 2018//2019 season, the club managed to sign a great striker in Raul Jimenez for a club-record 30 million. 30 million may not seem much in today’s market with star players going for 80, 100 or even 150 million, for a small-market team like Wolves, a signing like Jimenez is something crucial. While it is not directly a cause-effect situation, there is no arguing that the added sales allowed for this transfer to happen. Jimenez is just one of many examples of a small-market team being able to acquire big players due to added revenue from TV streams. All across Europe, in other professional leagues, it is easy to see that there is an increase in these small clubs’ ability to get new players, such as Nabil Fekir going to Real Betis, Ayoze Perez, and Youri Tielemens to Leicester City, among others. 

Another and perhaps the main source of income for these clubs is seen in shirt and jersey sales. Every year, the jerseys a team uses become available for commercial use. An average jersey costs around 30-40 euros, so if that unit price is multiplied by the total sales in a season, it can garner an average of 10-20 million euros a season. These figures are staggering to look at because these 10-20 million euros can be crucial for smaller clubs in order to compensate for player salaries, facility maintenance, stadium renovations, etc. It is often said that Real Madrid was able to earn back the initial 80 million euros they paid for Cristiano Ronaldo through jersey sales alone, showing the power of jersey sales. The advantages that a smaller club would have in this scenario is definitely the fashion and culture aspect as well. While jerseys are a good way to show support for a club, there is a level of fashion that comes with buying a jersey. A great example of this is seen in the 2018 World Cup where the Nigerian kit became a fashion trend worldwide. This gives the opportunity for smaller teams to not only attract their fans but if they get the right sponsorships and partners to help in designing their kits, they can attract more people as well. With that increase in revenue comes the ability to spend and search for more quality players. 

While there is no denying that there is still a huge divide among clubs, the recent trends show an opportunity and a chance for small-market teams to compete in the race for good players. Here in ETA Sports, we do not only help smaller teams develop their players, but we also help in the soccer business. We recognize the business aspect of the game, so be sure to check us out as we can find a way to assist you. So for any small team out there, continue to persevere, continue to work hard on the game, but realize that there is a business and commerce side to the sport. Realizing this can set a team apart from being great to being excellent.