Recent development

Professional football overcomes a rapid development in the recent years. The impact of money is playing a more and more important role for a team’s success. An example worth mentioning are the competitors having participated 2019 finals of the European Club competitions, which were wholly originated in the English Premier League. This league is the one implicating the most financial potentials and flows. Only regarding the past ten years, Premier League teams raised their team values at about 5.33 billion Euro or 180% (Fehr, 2018). This trend will hold on due to very potent investors, which makes football a business without a financial limit.

 

A similar trend shows up in all relevant european league, as figure 1 shows. A further example can be drawn in european football clubs’ wage structures. I made the example on hand of the german sqaud FC Bayern München. In the 1970s the top stars, Franz Beckenbauer and Gerd Müller, were their highest paid players with 350,000 respective 250,000 € (converted). In 2012, Bastian Schweinsteiger and Philipp Lahm had the highest salaries with each of them earning about 10 Million € (source: Die Gehälter-Entwicklung der Bundesliga). This was exceeded by ten players only six years later (source: Was verdienen die Spieler bei Bayern München? 2018).

Simultaniously to the raised money exertion the differences between the clubs rises. By a regularly participation in the Champions League, clubs can gain a huge competitive advantage. In 2019, 29 clubs qualified for the tournament that had participated the year before (Hürner and Witzenberger 2019). The 20 clubs implementing the most revenue multiplied their revenues in the last 20 years and formed teams and infrastructural requirements to exceed their success (see figure 2).

The higher a club is competing, the higher are its bonusses from the competitions. Clubs having less financial resources, must work effective with their economic possiblities and find ways to manage different managerial aspects effectively. In the following, I will explain some of these and show possible approaches to reach the aspects.

It is a money game

Clubs lacking enough money to buy themselves full-developed top star players to reach their goals, have to find other paths to build a successful squad. A promising, but very costly strategy is the development of youth local players. According to a study conducted by ARD-Radio Sport Recherche, only 3.5% of all youth players make the step to a top five league club (Germany, England, Spain, Italy, France), even only 2.6% do play constantly (Binder et al. 2019).

This follows that the development of a successful local player is associated with quite hugh expenses. Due to own calculations, a club has to invest on average about 1.1 Million € to pull a player through the youth teams to their first team. If a club is successful in this sector, it can earn a lot of money. A good example for such a club is the portugese squad Benfica, which has generated average proceeds of 12.4 Million € with youth players since 2008. This rewards an return of 1,100% per player. Another one displays the dutch squad Ajax Amsterdam, which also has well grounded scouting skills, having generated proceeds of 610 Million € or 3.4 Million € per player over the past 20 years.

This leads to the perception that the promotion of local players is, although being rather expensive and selective, an investment worth heading for. Clubs can acquire promising young players with comparable low expense. These players can pay off the investments through good productivity, which either leads to competitive success or transfer payments. This makes the promotion, a good infrastructure and good perspectives for youth players a key strategic goals for clubs, who don’t have the highest possible financial possibilities in their respective leagues.

Injuries as a major driver for costs

A massive exacerbating factor for professional football teams during a season are injuries. When an important players faces a long-term injury, the capability of the squad can be influenced strongly negative. Additionally, injuries cost a club a huge amount of money. Only in the season 2018/19, clubs of the German Bundesliga had to pay salaries of 125 Million € to players who were not active due to injuries. This makes an average of 7 Million € per Club. Bundesliga players had an average injury duration of 52 days, what is a huge minimizing factor for the games a player is available to his squad. While this isn’t a serious problem for player who isn’t basically essential to the starting eleven, a 50-day-injuried key player may have fatal outcomes to a teams success¹.

If you compare the figures listed above to the latest UEFA Elite Injury Report (Ekstrand 2019), you can build the hypothesis that the injury burden decreases with rising financial resources. The UEFA Elite Injury Report compares performance data measured in training and matches of 25 anonymized participants of the Champions League in 2018/19. This data shows that every players “only” missed 30 days per injuries. This leads to the conclusion that investiments in medical care and prevention is particular beneficial for clubs