Economic model of a professional football club in France

Abstract

The economic model of football clubs is a revenue model, but also a cost model in relation to their objective. It can be defined as the search for balance between revenues, costs and objective, and the latter can vary: profit maximization, sporting maximization under strict constraint (“hard” constraint) or “soft” budget constraint (Andreff, 2009). In France, the revenue model of football clubs has evolved with time. This mutation fits in the switch from an SSSL (Spectators-Subventions-Sponsors-Local) model to an MMMMG (Media-Magnats-Merchandising-Markets-Global) model at the European level (Andreff and Staudohar, 2000). Before 1914, sport financing came mainly from practitioners (Bourg and Gouguet, 2001, p. 19). Thereafter, with competitions being a spectacle, spectators have become the primary source of revenue, ahead of the subsidies granted by the local authorities and industry patrons. Advertising revenues have gradually become more and more important, and in the 1960s and 1970s, sponsorship increased significantly as firms were seeking a more direct identification in terms of audience, image, reputation and sales (Andreff and Staudohar, 2000, p. 259). In France, during the 1970s, operating revenues of first division football clubs came mainly from the spectators, supplemented by subsidies and sponsorship. The SSSL model was at its peak, with its “L” finding its justification in the fact that the revenues were generated from local or national residents.