"Football is over its boom years"

There is too much football

James Mackreides says the money won't stop coming, but the goals will.

Jim Ratcliffe is one of Britain's most astute businessmen, as evidenced by his Ineos empire. However, he hasn't shown much evidence of being successful in his role as Manchester United's co-owner.

At 666.5 million, the football team's revenues were up less than 1 percent when it released its results last week, but it lost 33 million for the fiscal year. The team had a difficult season, finishing in 15th place in the leagueits lowest finish in over 30 yearsand missing out on Champions League football.

It's not the only team having trouble. Their fierce rivals on the opposite side of town, Manchester City, had a much better season on the field. In contrast, revenues increased by less than 1 percent last year, from 712 million to 715 million.

In Paris, PSG won the Champions League and is regarded as the world's best team at the moment. However, last year's revenues only increased by 1% to 806 million.

According to Deloitte's annual "Money League" report on the financial performance of the biggest clubs in the world, overall revenues increased by just 6%, with Real Madrid's stadium renovations accounting for a large portion of that gain. It seems that the days of the world's biggest football teams being able to rely on annual revenue increases are over.

It's an ex-growth industry, football.

This is due to three factors. First of all, sponsorship has run its course. Nearly every available space on a pitch, shirt, or website has a number of corporate logos emblazoned on it. Last season, Manchester United partnered with 41 brands. Barcelona had 34, PSG 44. One or two more could be added, but there are only so many partnerships that can be formed, and it is obviously not feasible to have 60 or 70 sponsors and still provide anything of value to the businesses that are funding the initiative.

The broadcasters are also not paying outrageous sums of money for the right to broadcast live games on television. The Premier League in the United Kingdom is the most valuable, with a record 6.7 billion for the 2025 - 2029 rights. However, that was only a slight increase over the previous round, and it is unlikely that it will increase significantly when the rights are up for renewal at the end of the decade. After accounting for inflation, the Premier League's current revenue from the broadcasting rights is 31% lower than it was during the 2016 - 2019 package.

It is difficult to envision a return to revenue that doubles every few years as it did ten years ago, given the sharply competitive subscriptions market and declining average viewing numbers per game as the number of live matches has increased.

Overall, the tech companies have kept their checkbooks closed, despite Amazon purchasing the rights to a few games. The big hope was that one of the streaming giants would enter the market and pay whatever price was required to secure a deal. They are aware that it would not be worth the billions of dollars to become a major player in this market.

Fans and players have had enough.

Lastly, it is unrealistic to expect the players to continue playing games. The Champions League has already undergone a redesign to accommodate many more games between the top teams. The Fifa Club World Cup, which is held at the end of each season every four years, has been strengthened along with the Europa League and Conference League. The next one, which is scheduled for 2029, will feature 32 teams.

More games translate into more opportunities for sponsorship, more broadcasting rights, and more tickets to sell. Fans, however, are growing disinterested as well, as evidenced by the half-empty stadiums and low attendance for the Club World Cup.

To put it briefly, football is overdone. The days when clubs could easily increase their revenue, reach a wider audience worldwide, and charge more and more for sponsorship deals and broadcasting rights are long gone. Following a three-decade boom that revolutionized the industry, this sector is currently stagnant and ex-growth, with investors receiving only average returns. There is no immediate prospect of a return to the boom years.