Football teams see their merchandise sales decrease as revenue falls and insolvency looms
Football clubs make money in two main ways; through ticket sales revenue and through the sale of club merchandise to their fans. Merchandise can take the form of football shirts, football boots, t-shirts, footballs and a
lot of other things. The recession seems to have affected sales of football merchandise in a big way. Recently a study by Virgin Money has shown that people are really pinching their pennies and saving their money. Without this revenue stream, the clubs will
suffer financially in the next few years. They may have to find new and innovative ways to increase their financial positions.
Excessive debt, ballooning payments, and the recession have all taken their toll on football clubs in the Premier League. At the start of the 2009 season, the financial position of all the clubs in the League was attained
and they were given a credit score by the rating firm Equifax. It measured and evaluated the credit rating of clubs before the start of the season and then again once the season was over. It found that although over a third of the clubs had increased their
credit score during the 5 month period of the regular season, over half of the clubs were labelled insolvent by the rating firm. This is a very serious problem for the Premier League and the clubs really need to get their acts together.
The problem runs very deep in the English football club system. There is rising debt that looks unlikely to be repaid anytime soon, players are going unpaid, there is no money for any new signings and half of the clubs have
been sold to foreign investors. The recession hit the Premier League and it hit it hard. The clubs and their financial gurus need to put their heads together and come up with some new solutions that can get them out of this mess and they need to do it very
quickly or we will see many clubs going bankrupt and being sold.
At one time it looked as if football and the Premier League would be untouched by the recession and they would be fine because the sport has become almost a necessity as opposed to a luxury. But it seems that people are not
buying tickets to matches and they are not buying club merchandise. The spending sprees of the last few years of buying anything that had a Premier League badge on it is drying up and clubs are losing some serious amounts of money because of it.
Virgin Money did a survey of 4000 football fans in England and they found some surprising results. One of the things they found was that overall 42% of those surveyed said that they would be spending less money this year
on football related goods including replica shirts and other branded items. The team’s fans that are going to be spending the least amount of money are Bolton and Birmingham, decreasing by 52%, and even 48% of Chelsea will be spending less. The strange thing
seems to be that football clubs look like they are all set to continue charging the high prices they charge for their goods. A replica shirt, on average, will set back a fan more than £40 and that is a lot of money to pay for a football shirt. If it is personalised
then the cost can increase by £10-£15 on top of the retail price. Not too many people want to spend that kind of money during these hard times.
There can be numerous solutions to this problem. First of all they could try selling lower priced gear and make up the difference in the volume they sell. In hard times people might have a problem paying for a £40 shirt but
a £5 mug or a calendar might be easier to sell. Also they can think about slashing prices dramatically or have promotional deals such as buy one get one free to weather the storm. It will take some time but the recession will end and fans will start to buy
merchandise again, the clubs just have to be patient and ride out the financial hump. Hopefully they will all survive and look back at this time as a learning experience for them all.
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