All sports organisations generate income in many different ways. Here at Nifty we were interested in how the top earning sports teams generate revenue, so we asked what people believed was the best way of generating income.
As you can see, sponsorship smashed it with 42.7% of people saying it’s the best revenue stream for the top earning sports teams. Let’s take a look at why that is, and what other options there are for sports organisations to generate revenue.
Sponsorship revenue has several advantages for both parties. It offers an additional source of income for the person or business while also raising their profile and trustworthiness. It gives the sponsor more exposure, enables them to connect with new audiences, and fosters positive brand connotations. Moreover, sponsorships can assist businesses in growing their clientele and entering new markets. We understand why so many sports organisations voted for this as their best revenue stream as it is an easy way to secure large sums of revenue. However, sponsorship deals can often go wrong, leaving organisations short for cash or in crisis management mode. Even if your sponsorship deals are smooth sailing we recommend looking into other revenue streams to expand your income.
Ticket revenue is pretty straight forward, you earn revenue from the sale of tickets. However, there are limitations on how much revenue can be made purely from ticket sales as there are only so many tickets to be sold. Sports organisations will always try to fill their stadiums as not only do sports teams benefit from the revenue generated by ticket sales but a sold out stadium also positively impacts the organisation by attracting sponsors and more fans. The problem is, thanks to the cost-of-living crisis and other external factors sports organisations are struggling to sell tickets, seats are empty, athletes are deflated and revenue is drying up. This is the point where teams need to turn to other methods to earn much needed revenue that can be reinvested to get fans back into stadiums.
Merchandise revenue is an old but efficient source of revenue for sports teams. There is a lot of potential in merchandise revenue particularly when a sports organisation signs a new star player. For example, when Cristiano Ronaldo returned to Manchester United, the club made £187M just from shirts. This highlights that although merchandise revenue can earn big cash, they are also dependent on external factors, like the performance of the club and star athletes.
Social media: (12%)
Social media revenue being the lowest percentage of the votes is evidence sports organisations are completely unaware of the revenue that can be made from monetising social media content. The revenue stream from social media is completely untapped as of yet and companies are truly leaving money on the table. Monetising social media content is not only risk free but also high reward. Did you know if you had 100k Instagram followers you can make £9980 purely from only 2% of your audience paying £4.99 a month for exclusive content like behind the scenes footage?
These results were definitely interesting to us at Nifty. It will be fascinating to see if the top earning sports teams will begin to tap into the huge potential that is social media monetisation.
If you want to learn more about social media monetisation head over to the resources page and have a read of the Nifty Ebook