Football is the world’s most loved sport, but surprisingly, many football clubs, even the biggest ones are not profitable. Despite having millions of fans, big TV deals, and global sponsorships, many top clubs continue to report losses. So why most football clubs are not profitable?

High spending and low profits

Football clubs spend huge amounts on player wages, transfer fees, agent commissions, and stadium operations. While revenue from broadcasting, sponsorships, and matchday income is strong, it often isn’t enough to cover costs. Top clubs like Barcelona, Manchester City, Chelsea and many more pay extremely high wages to attract world-class talent. Barcelona recorded over €1 billion in debt in 2021, with player wages taking up nearly 74% of the total revenue.

Manchester United remains one of the richest clubs in the world. But despite earning over £600 million in revenue yearly, the club still had a net loss of around £42 million in the 2022–23 season. A key reason? The Glazer family, who own the club, take annual dividends, over £20 million, even when the club is in debt. This puts pressure on United’s finances and limits investment in players and infrastructure.

Even in the Indian Super League, clubs like Kerala Blasters, ATK Mohun Bagan, and Mumbai City FC have spent big on foreign players and Indian stars. But the league doesn’t generate enough revenue through ticket sales, sponsorships, or TV rights to cover those costs.

Dependence on Owners for Survival

Many football clubs survive only because of rich owners. Manchester City and Paris Saint-Germain are backed by billionaires from the Middle East. These clubs operate with heavy losses, but their owners cover the gap.

In ISL, most clubs are owned by big companies like Reliance, JSW, or major celebrities. These owners are ready to book losses to build brand value, but this model is not financially sustainable in the long term.

Limited Revenue from Matchdays

Unlike cricket in India, football does not attract big crowds consistently. ISL matches often have empty stands, which means low ticket revenue. Even in Europe, matchday income has declined, especially after COVID-19. Clubs are now over-reliant on sponsorships and broadcasting deals, which are unpredictable.

No Real Profit Motive in Most Cases

Football clubs are run more like passion projects or brand-building tools than businesses. Most owners care about prestige, not profits. For example, Roman Abramovich owned Chelsea for nearly 20 years, spending over £1.5 billion, but the club rarely made profits.

Similarly, in India, clubs like Chennaiyin FC or Bengaluru FC are part of a longer-term brand or CSR strategy. Making money is not their main goal, at least for now.

Losses Don’t Always Mean Failure

Interestingly, booking losses doesn’t always mean the club is in trouble. Losses can help reduce tax, improve market value, or help in long-term investments like youth academies and stadiums.

For example, FC Goa continues to run in loss but has built a strong local fanbase and youth system. That long-term impact is valuable, even if there are short-term losses.

The rules of FFP and PSR

To prevent clubs from overspending, UEFA introduced Financial Fair Play (FFP) and the Premier League has its own Profit and Sustainability Rules (PSR). These rules ensure clubs don’t spend more than they earn over a three-year period.

However, some clubs have found loopholes. For example, Chelsea signed players on very long contracts (like 7 or 8 years) to spread the cost of transfer fees over many seasons. This helped them avoid breaching PSR in the short term, but it’s risky in the long run.

Recently, Everton and Nottingham Forest were penalised for breaking PSR rules, showing that authorities are starting to crack down harder.

What needs to change?

To become sustainable, clubs must shift their focus:

• Invest in youth academies instead of expensive foreign players.
• Create better commercial strategies like merchandising, fan engagement, and local partnerships.
• Improve stadium experiences to boost matchday income.
• Use data-driven scouting to find affordable talent.

Even top clubs must reinvent themselves to meet FFP and PSR demands, or face fines, transfer bans, or points deductions.

Final word

Football clubs are more than businesses, they are emotional assets for fans. But for long-term survival, especially in today’s financial climate, clubs must balance passion with profit. The sooner they adapt, the more sustainable and exciting the game will become.