Revenue, football, and crowds: a spreadsheet

By Midfielder / Roar Guru

Sport is business, in many ways. The key to any business is revenue. The greater the revenue, the more money you have to spend and a greater influence you can have.

Revenue in sport comes from points, media, sponsors, merchandise sales and crowds.

The world of sport today requires a strong media deal. The media deal among other things has brought extra coverage and the media coverage brings in sponsors. This media coverage affects merchandise sales thus sponsors get a free ride with fans wearing sponsors logos for all to see.

The underpinning of all this is the crowd size.

The AFL have the best crowds in Australia and using a figure of 7 million though the gate at an average of, say, $15.00 per person is $105 million in revenue. Selling merchandise to this many also provides additional revenue.

Large crowds also attack over time the media. Even the most biased media cannot ignore large crowds over time.

Football’s next media deal is due sometime over the next 18 months. I think what happens this year and maybe in the early season will determine if football can crack the $500 million maybe even $600 million for its next media deal.

What football needs is to grow its crowds.

Football needs to lift its crowds above the 10,000 average this season. I actually think it will average closer to 11,000 or higher.

However, that the time has come for this to happen is beyond doubt if we want the big media deal.

Crowds bring revenue and with five matches per round, 27 rounds, with 11,000 per match using the same $15.00 per match. This would equate in round terms of 1.5 million fans and 22 million dollars in revenue.

Plus merchandise sales. The extra crowd would help the next media deal.

Assuming the next media deal is over $500 million or $100 million per year, and if we can average 11,000 per match, football’s revenue will be, even without sponsors and merchandise, $122 million per year.

Every one thousand increase in crowd adds just over two million in revenue.

Extra crowds should also bring a better media presentation, more sponsors, and an increase in merchandise sales.

Hopefully all the planning that has gone into this season and the return of Harry Kewell and Brett Emerton will bring back the crowds.

I have attached a spreadsheet which can be used for forecasting, recording or both. The first line in the spreadsheet has 0 written, this is to make it work.

Simply after filling in the first week’s crowd for each team, the 0 can be removed. Home games in grey cells.

It has A-League seasons one to six listed as well for comparisons. So we can all be on the same page.

The Crowd Says:

2011-10-09T12:20:01+00:00

Midfielder

Guest


Opening round MV … 40, 357 Roar.. 13, 467 Jets .. 12, 467 Perth .. 9, 452 GC … 4, 113 Total … 79, 856 Average … 15, 971 Compared to other opening rounds Hal 1.. 70, 343 average 17, 586 … 4 games Hal 2 .. 62, 965 average 15, 741 … 4 games Hal 3.. 58, 214 average 14, 553 …. 4 games Hal 4.. 53, 332 average 13, 333 …. 4 games Hal 5.. 68, 156 average 13, 613 … 5 games Hal 6.. 54, 047 average 10, 804 …. 5 games

2011-10-09T07:01:24+00:00

Midfielder

Guest


JB No mate I did not think you were having a go at me at all... was just adding to your comment and my clever remark was meant ... I also like looking at the big picture...

2011-10-09T06:59:26+00:00

Midfielder

Guest


I agree with you

2011-10-08T13:30:44+00:00

j binnie

Guest


ICF - For your information by using the same logic as above & removing those ridiculous 3 mid week fixture crowds (1 of them actually played "away" from home due to the flood damage you mentioned) & the 1 weekend fixture held at the same venue, the Roar actually attracted a game average over their other 11 games of 10,250. Sydney City using the same method of calculation averaged 8900 to the remaining 11 of their games. I won't comment on your other article as you have obviously not thought out what "expansion" has cost the league in its formative years & what a continuation of the policy would do to the standard of football. Of course another Sydney team would make a difference in 3 crowds (derby games) but with that the only benefit,who's kidding who? jb..

2011-10-08T04:10:41+00:00

ItsCalledFootball

Roar Guru


I might be wrong, but I would suggest that Sydney football crowds would actually go up with a 2nd Sydney team and the FFA should fund one ASAP and not wait till "things setlle down". Like the AFL, they should pay Palmer to re-locate the Gold Coast to Sydney's West and re-name them as the Golden West Rovers. Surely they could pull more than 3,777 spectators and the Penrith Football club have already promised them the CGU Stadium which holds 25K and is a rectangular stadium and available all summer long.

2011-10-08T03:56:39+00:00

ItsCalledFootball

Roar Guru


And what about the weather - widespread flooding across the east coast of Australia and Suncorp under water for Roar's last 6 games, 80% of games washed out or rained on. Had a big effect on the gates and attendances - half decent weather and the Roar's home ground available at the business end of the season and we would have nudged the 10K avge, which still puts the A-League in the top 20 football leagues of the universe.

2011-10-08T03:44:38+00:00

j binnie

Guest


Midfielder - I'm not exceptionally clever,it's just that I make a hobby at looking at the big picture in analysing crowd figures & the factual reasons,(not the invariables like weather over which no one has control)) that I can muster in arriving at a figure. I think you may have thought I was having a go at you ,not true, I was only pointing out that if the original HAL format had been adhered to your hoped for figure of 10,000 per game (the first number you mentioned)would probably have already been reached.I simply removed the expansionist club attendances from the overall figure then replaced the actual midweek fixture crowds with the 'home" team's average gate,& hey presto,got to 9900,give or take a few. You mention the Mariners. With a corrected (as above) average last year of 8040 for 12 home matches (remember they had a double header in Sydney) & a team playing well enough to reach the GF (on merit,not an invariable like luck). I cannot find a plausible reason why they should not better their average by 1800 per home game especially when one notes in their last 5 home games last year their average attendance had risen to 9400. Good indicator as to the possible. Now for a correction.I did NOT say GC & Heart will again have the lowest crowd figures, I did say they, plus Fury, had the lowest fan base in last year's competition,another fact, & I certainly did NOT mention a Wollongong,Canberra,or second Sydney team being brought in as an FFA mistake. IMO their mistake was expanding the league in the first place ,long before the clubs already there were established & the standard of football being played was IMMEDIATELY lowered due to the dilution of quality players across the added clubs. I think recent occurrences may back this up,also,now introducing the step to make teams take the game to outer areas pointed out a way that more games could have been procured simply by the 8 original clubs playing each other 4 times with every "second "home game being taken to another site where their hardcore fans could still reach but new fans could be encouraged. eg Mariners take a game to Kempsey, Port McQuarrie.or such places. Keep up the good work.Spread sheets? I think not,spent too much time on them during my working life but thanks for the suggestion & the work in preparing it. jb

2011-10-08T01:02:10+00:00

The_Wookie

Roar Guru


The difference between an AFL club running at a loss and clubs from other leagues is that they are still technically solvent due to the AFL effectively having to guarantee funds which will cover those losses in general. this is important because under Victorian law, VFL/AFL clubs are not allowed to lose more money than the AFL can safely guarantee (Victorian clubs are all audited by the Victorian Treasury and have been since the 80s when they were all losing money. The argument about using the media deal to pay off debt has come up with the AFL as well, and they are using some funds to aim at debt reduction, but more policies at equalisation and revenue improvement strategies. Simply paying off debt is lazy and clubs and club owners learn nothing from it.

2011-10-08T00:37:35+00:00

Midfielder

Guest


JB Clever you are ... you should also add the weather effect over the last two years and especially last year... every game except one it poured on the CC for all our home games... Moreover if the A-League in its current format can drag the averages above the 10, 000 mark it is a remarkable achievement... Me thinks as I said earlier the average will be just a tad above 11, 000... Some clubs will get more than others..... I hope the Mariners can get above the 10, 000 mark however its my hear not my head talking... Your point that the GC & Heart will again have the lowest crowds and why did FFA not wait another year and get a second Sydney and Wollongong or Canberra team is without doubt the greatest mistake made under the Lowy era .... hopefully it will not be fatal as we need a good media deal next time. In the meantime all we can do is go too matches and encourage others to do the same and watch if possible.. JB down load the spreadsheet and play with it ... helps one from going crazy...

2011-10-07T23:24:47+00:00

j binnie

Guest


Midfielder - For one who likes to play with figures I thought you might be interested in the following. The worst "supported" clubs last year were Heart,Fury & GCU the 3 clubs admitted under "expansion" reasons. Remove their crowd figures from the overall total of the HAL's potential gate income & the total lowers from 1,380,480 fans to 1,155,840 fans but increases the "original" 8 team's potential gate income to 9632 fans instead of the overall average of 8366 fans for the 11 teams. Now if you stick with the higher average from those 8 clubs & take away the gates from those ridiculous mid week fixtures introduced by the FFA but add the shortfall to their 9632 fans their average could actually have jumped to 9990 fans,not far from the 10,000 you said they had to achieve. So is one not justified in asking why did the gates drop in the last 2 years?.Forget the WC bid for a moment, what did "expansion" & "mid-week fixtures" contribute to those lowered figures for 2010.?? jb ps Don't come back with Heart's home gate average of 8279 fans which included 2 HOME games v Victory.I would just retaliate by saying ,take away those 2 gates, & the other 11 home games only averaged 5749 fans, so, how many fans at the "derby" games were some of Victory's seasonal average of 15050 who crossed town for the games?. Wonderful thing figures & how they can be construed.jb

2011-10-07T22:38:08+00:00

j binnie

Guest


Fussball - Totally agree with your basic observation. Spend more than your wages and you are soon in trouble.Basic economics that obviously Midfielder chose to ignore in the excitement of the new season.On a deeper note however this simple observation appears to have very low standing among the youngsters of today.Dangerous. jb

2011-10-07T13:17:44+00:00

ItsCalledFootball

Roar Guru


Speaking of revenue, the SFC v Victory Etihad game last season drew 17,299. If this year's game draws 40K as predicted, Harry's first game revenue will be about $500,000.00 - not bad for a 90 min game of football. He probably won't even have to play 90 min in his first game. If he keeps that up it would be roughly $6M or more for a 27 game season + finals. That's loosely based on 80% of all revenue increases - about 10K avge increase per home game at avge $20 per ticket, plus similar increased sponsorships, advertising and merchandising.

2011-10-07T12:31:01+00:00

The_Wookie

Roar Guru


Been a little busy being robbed by umpires and stuff. You know how it is. You probably paid for it.

2011-10-07T12:22:13+00:00

Nathan of Perth

Guest


Wookie, haven't seen you around these board since the semi-finals!

2011-10-07T12:06:51+00:00

Peter Wilson

Roar Guru


A-League clubs are cheaper to run than NRL or AFL clubs and the average yearly loss is about 1.5 to 2 million. Now if the FFA get between 80 to 100 million a year for media rights as Midi says, then assuming the FFA gives about half back to clubs, that would wipe out the clubs avge debts and make A-League clubs on average sustainable, without bleeding their rich owners. That would boost the competition and allow the clubs to spend more on players, advertising etc and it would have a big flow on effect. The next media deal is going to be huge for the code here and if they get closer to 100 million a year, the knock on benefits will be enormous.

2011-10-07T11:56:26+00:00

Karmikel Funk

Roar Rookie


Nice one Midfielder. I was a midfielder too, a very attacking no 8. Mate, very few football clubs in the world actually make a profit from their own football operations. So profits alone don't tell you if a club is going to survive. The world's biggest club, ManU lost over 300 million pounds on its football operations last season and has nearly a billion pounds in debt. And that's the most popular club in the world. Dare I say it - most NRL and AFL clubs make a loss on their football operations - they get big handouts to make it look like they make money, but in reality they don't. Dalmege sunk $8 million over 3 years into Manly - this year's premiers and that money is gooooone forever.

2011-10-07T11:08:17+00:00

The_Wookie

Roar Guru


One HD (Ten) made an offer recently to the NBL to either do one broadcast live on a sunday afternoon or three delayed matches late at night (Fri/Sat/Sun) - the NBL have opted for the delayed telecasts. Not sure what the cost on that was, but id suspect a similar offer might be made to the FFA.

2011-10-07T11:02:23+00:00

The_Wookie

Roar Guru


AFL clubs are required to pay a minimum 92.5% of the cap. Otherwise known as the Fitzroy rule

2011-10-07T11:00:43+00:00

Nathan of Perth

Guest


You're correct, Fuss, there is definitely a floor on the cap.

2011-10-07T10:58:23+00:00

Fussball ist unser leben

Roar Guru


Ian Whitchurch I'm sure you are wrong about the AFL not setting a floor on the salary cap - think the floor is set at around 90% of the ceiling. Will have to get confirmation from an AFL person, but I'm certain they do - clubs like Footscray & Nth pay close to the minimum they are allowed It's Economics 101 - when labour supply is short but you are required to pay workers a set fee regardless of competency, then you reward mediocrity.

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