In the last 30 years, football salaries have exploded and every year, they are being further stretched. In the late 1950s, a top English player would have an annual salary of around £75k. This amount is now a weekly salary for some players and besides, they can join 2020 UK most trusted sportsbook and receive advertising revenue. The fact is that the answer to this question can be found in a simple business term called supply and demand. Supply and demand determine the price of everything in the world. In football, demand is represented by the number of teams wanting to buy players and the number of people watching the sport whilst supply is the number of footballers.
Think of it this way, in a highly lucrative industry, people who are the backbone of it are paid more in order to keep them apart and also to entice future interest in this career. Becoming a famous footballer is every kid’s dream but only a few are successful and therefore, awarded for their troubles.
A short history of football
Football became a professional sport in 1885 meaning that players could get paid for their work. One of the most important moments in the history of football occurred in 1961. The Chairman of PFA, Jimmy Hill has removed the £20 a week wage limit for football players to stop the protests. Since then, inflation took its toll.
Premier League and TV Rights
In 1992 the Premier League has been formed. Sky TV paid £191 million for the rights of broadcasting the Premier League in its first five years. This meant that there was a lot of money entering the football industry and due to globalisation; it became available worldwide, drawing more attention and generating higher revenues. The Premier League TV rights for 2016 to 2019 were sold for $5 billion in comparison to less than £200 million for the first five years.
Interest Equals Revenue
It is logical. Let’s assume that people stop watching football. The clubs wouldn’t make money from TV rights, seats as well as jersey selling, sponsorships and similar. This means that footballers wages would decrease proportionally.
The football industry is very lucrative and one of the most popular sports worldwide with probably approximately 50% of people watching football regularly or occasionally. Imagine just ten million people buying a £50 jersey. Now, think about the sponsor names on these jerseys and the amount of money that they sponsor the club in order to be advertised. Additionally, stadium visiting and also names. Emirates Airways paid £100 million to Arsenal to name their stadium in the following 15 years.