It is very easy to detect a major flaw in this business model.
It comes down to a very simple metric - Profit.
Football clubs produce pathetic profits.
Real Madrid and Barcelona are relatively profitable: Madrid have made total profits of around €200 million in the last five years, including €47 million last season; while Barcelona’s loss was only €12 million.
More importantly, both clubs registered hefty profits: Barcelona’s €49 million was their all-time record, while Madrid’s €32 million was also a notable achievement.
Those two are absolute best & most profitable football clubs in the world. Yet 49m euros was Barcelona’s all time record profit.
That was in 2012, in last 4 years, the expenditure on players have increased exponentially & annually; while the revenue in footballing world increases on contract length basis - TV contract, sponsorship contract.
80% of clubs hardly make 4-5m profit.
People keep saying football is now a business but it has to, else they wouldn’t even make a penny if they go by fans’ desires.
In contrast, I recently joined a firm which till last year had barely 100 employees, but it annually racks up 90m dollars as profit. And it is only going to increase because the continual expenditure is just human labour.
The equipments are one time payment with minimal maintenance fees.
Whereas core equipment of football are players who have shelf life of 4-5 years and their wages keeps increasing.
Football clubs are just that - football clubs. It will not branch out to offer something else.
Google went from search engine to mobile OS to google maps to arrays of products which can generate money.
The present is secured, and the future is also safeguarded.
Football clubs just sell one product.
I maybe wrong here but stock exchange relies of variation in selling buying behaviour. Stagnation neither brings value of stocks down or up.
I am assuming that football club stocks are mostly purchased by fans themselves who would never sell the shares as they are attached to the sentiment.
I never understood what Shiekhs/Abrahimovic gained from acquiring & investing heavily in football clubs.
They could have used the same money to market their brand better through usual mediums.