It's All About Money, Honey!

Dev AshishAnalyst IJanuary 16, 2009

Disclaimer: Content of this article is completely fictitious, inspired from standard facts, and represents the author's intention to portray the business aspect of the sport to the layman without involving any specific details or in-depth analyses, keeping aside any emotional sentiments at bay as a sports fan, to present an unbiased picture.


I remember as a kid I used to spend the evenings with friends kicking the ball in the park practicing for football match on the weekend against our rivals from the other side of the city. All our friends and sometimes families came together to watch those games.

An ice-cream vendor was always present near the spectators, enjoying our game as well as selling his treats. On a later day, he admitted he did sell out more often on game days than on normal days.

As we grew up, we started playing tournaments for cash prize and pride. There was usually a park was booked by the organisers for a fixed period where we used to fight our epic battles. As of today, those parks are now full-fledged sports complex offering a variety of sports at a very nominal fee.

By the time my friends and I started dating, it was obvious with our little pocket money and meagre part-time job salaries that we could not afford to take our girls on a decent date or buy gifts either. So, searching for an alternative source of income as high school students, the only way to earn easy cash soon and without much effort other than selling weed, was to organise a football tournament.

All we had to do was book a park for a month or so, decide the tournament pattern, decide the tournament entry fees, sell a few counters to food and refreshment vendors, and fix the prize amounts.

For example, 16 teams with a nominal fees of Rs. 600 per team, we got Rs. 9600 in total. Park booking for a month normally meant paying the Municipal Committee a very nominal charge around Rs. 2500-3000. That leaves nearly Rs. 7000 cash in hand.

Now set the prize money for winners at Rs. 2500 and for runners up at Rs. 1500. That leaves Rs. 3000 in hand plus more from vendor agreements amounting to around Rs. 5000.

So, a total of Rs. 8000 was available for us the moment the tournament begins and the money gets equally divided among the organisers, usually four. Depending on the number of organisers, the number of teams and entry fee per team keeps varying proportionally.

Now that we knew of an easy source of income, surely there will be competition from others. How did we beat it? By advance booking the parks and advertising the tournaments. That required a bit of investment, but it came back with huge returns.

As we had housefulls stands for every match, we put a small ticket on entry of Rs. 5 per person. The crowd thinned out a bit, but still the ticket money was an additional profit!

The money was pouring but the competition was heating up. We couldn't monopolise the sports altogether, eventually we had to give in but we had a better plan.

Alternating day and night matches under lights for a month, (two tournaments in one month, with increased prize money), bringing in double profits. Added to that we increased ticket prices to Rs. 25 with a coke mini-bottle and snacks pack included.

As for the vendors, we paid them a fixed amount for all the sales, after of course they entered bids. The ones with lower prices and good service won the contracts. We took bribes of course. Considering a coke mini-bottle and snacks cost not more than Rs. 15 and paying the vendors Rs. 13 per customer, we still made Rs. 2 per spectator, plus Rs. 10 extra on tickets.

Now you do the maths on the profits earned by us. It definitely got three-folds in no time.

Other innovations to keep our business alive included bringing in the local cable channel to cover the matches, bringing in the sponsors and partnering with other tournaments to widen our scope.

By now, you must be wondering what this got to do with anything.

Assuming you got the concept of what me and my friends were doing, supersize the concept into millions of dollars. Add to that club ownerships, player salaries and sale of team merchandises, we got ourselves a billion dollar industry, whose operating profits are more than the GDP of many African countries combined.

With almost every club running under debts, owning a club is more of a status symbol for billionaires than anything else these days.

The media and marketing are the major deals through which the clubs earn revenues, after from ticket sales from the matches.

Better player at the clubs bring in more fans, more viewers, more media exposure and more merchandise sales, apart from the trophies and awards which could be won.

This, in turn, leads to competition among clubs to shell out more money to buy the players, irrespective of whether or not they are worth it, rather depending on the depth of owners' wallets and need of the team.

To conclude, you see football has grown from being a weekend entertainment to a multi-billion dollar industry. Its no longer a sport, its commerce. As the demand grows, the prices are bound to rise. With so much cash in flow, the players and management are bound to demand,"Show me the money!!!"

After all, it's just business, nothing personal.


NOTE: 1 USD = 48.757 INR , 1 GBP = 71.872 INR ... Comparing Indian teen lifestyle in a metro with an US or Uk teen, I would say what I quoted as Rs.3000 in the start could well be around $100 roughly give or take, or you can assume almost an amount one and half times your pocket money and part-time jon salary combined, whichever is less.