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Episode
145

When Football Became Big Business

Mar 30, 2021
Business
-
19
minutes
Football
Sports
Advertising
Business
Marketing
Life in the UK
Weird history

Footballers are some of the best-paid people on the planet, and there has never been more money involved in the game.

Discover the journey of how and why football became such a lucrative industry, from a time when it was illegal to pay footballers anything through to when the best-paid footballers earn millions of dollars every week.

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[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English. 

[00:00:12] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.

[00:00:22] I'm Alastair Budge and today we are going to be talking about football, and specifically, when football became big business.

[00:00:31] Footballers are some of the best paid people in the entire world, with many earning astronomical amounts of money. 

[00:00:41] But it wasn’t so long ago that the situation was very different.

[00:00:46] So, today we are going to take a look at the history of the business of football, from when it was actually illegal to pay a footballer, through to today, where the very best footballers can be paid millions of euros every single week.

[00:01:03] It’s a really interesting story, so without further ado, let’s get right into it.

[00:01:11] Nowadays, it’s a common thing to hear football players talking about their love for the sport, that the money they make isn’t important, it’s just a number, and that they have such a deep affection for the game that they would play no matter what they were paid.

[00:01:29] You can decide for yourself whether to believe that, but just over 100 years ago it certainly was the case for everyone who played for football clubs in the UK.

[00:01:41] Because they didn’t get paid anything, it was actually illegal to be paid to play football professionally.

[00:01:49] Up until then, football players were only allowed to play at an amateur level, they all had other jobs, football truly was just something they did out of love for the game.

[00:02:03] It was only in 1885 that the Football Association, the organisation that governs the sport in the UK, allowed for footballers to be paid by their clubs.

[00:02:16] But, there were certain restrictions

[00:02:19] A club could pay a player, but only if that player had been born or had lived for two years within 10 kilometres of the stadium. 

[00:02:30] If you think of what that would mean for today’s game, hardly any professional players would qualify.

[00:02:37] At this time, most footballers were still part-time players, they weren’t full-time, professional footballers. 

[00:02:45] Nevertheless, the clubs started to pay them for their work, and for the very best players, they were paid quite well.

[00:02:54] The typical salary for an average working man, in a factory, or a normal job, was around £1 a week at this time, which is around €100 in today’s money.

[00:03:09] But the most skilled footballers were able to command much higher salaries, with some earning up to £10 a week, so that’s around €1000 a week in today’s money. 

[00:03:23] Still, if you are asked to think of a number that footballers now earn, €1000 a week is probably not the one you think of.

[00:03:33] In any case, it was a lot of money back then.

[00:03:37] People thought it was actually too much, and the Football Association proposed a cap, a limit, on the amount of money a footballer could be paid. 

[00:03:48] That limit? 

[00:03:49] It was £4 a week, so around €400 a week in today’s money.

[00:03:57] That limit was introduced from the 1901 season, and there was actually an official maximum wage that an English club could pay footballers until 1961. 

[00:04:12] That limit did increase in line with other salaries, and with inflation, but it was still capped at around double the salary of an industrial worker.

[00:04:25] After the limit was removed, as one might expect, salaries grew and grew.

[00:04:31] Immediately after it was removed, the record was set by the England captain, Johnny Haynes, who was paid £100 a week, which is today’s equivalent of about €2,500.

[00:04:47] €2,500 a week is of course a pretty great salary by most people’s standards, but if you offered a top football player a salary of €2,500 today they would probably laugh in your face.

[00:05:02] Over time, these salary records were broken again and again.

[00:05:07] And in line with the salaries, the transfer fees paid by the clubs, the money the clubs paid each other to buy players from each other, grew and grew, not just inside the UK, but further afield as well.

[00:05:23] In 1961, Luis Suárez Miramontes became the first player to be sold for more than £100,000, when he was sold by Barcelona to Inter Milan for £152k.

[00:05:39] In 1979, Nottingham Forest was the first team to pay £1 million to sign a player, a man called Trevor Francis. 

[00:05:50] And they also became the first club to pay a player more than £1,200 a week, and that lucky man was the England goalkeeper Peter Shilton.

[00:06:02] Diego Maradona, who will actually be the subject of the next episode, broke the record twice, when he was sold from Boca Juniors to Barcelona for £3 million in 1982, then from Barcelona to Napoli for £5 million just two years later.

[00:06:22] Then, starting in the mid 1990s, things really started to really shoot up.

[00:06:29] I can vividly remember Alan Shearer being sold by Blackburn Rovers to Newcastle in 1996 for £15 million, and that being considered an eye-wateringly large amount of money. 

[00:06:45] It's about €30 million in today’s money, not a huge amount of money for a footballer.

[00:06:52] Then Ronaldo, the original Ronaldo, transferred to Inter Milan for £17 million in 1997, Hernan Crespo broke the £30 million mark when he swapped Parma for Lazio in 2000 for today’s equivalent of €56 million.

[00:07:12] And then Zinedine Zidane went from Juventus to Real Madrid in 2001 for a record-breaking 150 billion lire, the equivalent today of around €90 million.

[00:07:26] Zidane’s transfer record lasted for 8 years, perhaps the bubble had burst, and that really was the most that a club could justify paying for a footballer.

[00:07:39] But, of course, since then it has been eclipsed several times, most recently with the €222 million transfer of Neymar from Barcelona to Paris Saint Germain in 2017.

[00:07:54] And, naturally, footballer’s salaries have increased in line with the prices that clubs pay to buy them. 

[00:08:02] The best paid footballer in the world at the moment, Lionel Messi, is set to earn over half a billion euros over the course of his four-year contract at Barcelona.

[00:08:15] So, footballers are paid a lot. And football clubs pay a lot to get footballers.

[00:08:21] But you probably knew this already - what is much more interesting is to ask ourselves….why?

[00:08:29] Yes, football is very popular, there is only room for 22 people to play on the field at any one time, and there are billions of people around the globe who love watching it, so perhaps it’s only natural that the people on the pitch should be paid so much.

[00:08:49] Indeed, there is an article on the Bank of England website which uses football as an example to explain supply and demand economics, showing that the best footballers are in very high demand, and therefore clubs compete to pay the highest salaries for them.

[00:09:10] That is, of course, true, but there are some interesting other elements to the question of why footballers are paid so much, and when and why football became such a big business.

[00:09:24] Really, the most important period for it, at least in the UK, is the year 1992, when the FA Premier League, the Football Association Premiere League, the top league in the country was created. 

[00:09:40] The Premier League was created as a way for the best football clubs in the UK to make more money. 

[00:09:48] Football clubs make money in lots of different ways: from ticket sales, sponsorship, and merchandise, but also through the broadcasting rights, the rights that TV companies pay to show the matches on the television.

[00:10:05] From 1988 to 1992, a TV channel called ITV paid the Football League £11 million a year, which is around €25 million in today’s money, to show live matches.

[00:10:22] It was paid to the English Football League, which would distribute the money to all of the 92 clubs in the Football League.

[00:10:32] For starters this wasn’t much money, and furthermore it was shared between almost 100 different clubs.

[00:10:42] The best clubs in the country thought "this wasn't very fair", and they decided to break away, setting up their own league, the Premier League, and negotiating their own broadcasting deals.

[00:10:56] After a tense negotiating period, the TV broadcasting rights were sold to a company called BSkyB, a satellite TV company, for a record-breaking £304 million, about €500 million in today’s money, over the course of a 5-year period.

[00:11:19] At the time, newspapers questioned how it was possible for it to cost so much - It was almost 10 times what the previous company had paid.

[00:11:30] It was a lot, but it was a lot less than one single footballer, Lionel Messi, is now paid.

[00:11:37] What people hadn’t understood back then was how transformative this would be, and how much money there was to be made from football.

[00:11:48] People questioned whether football fans would be willing to pay for a satellite TV subscription to watch matches. 

[00:11:56] They were, and BSkyB, the company that had shelled out a massive sum for the TV rights made a large profit just the following year.

[00:12:08] And, as you may know, the price for the broadcasting rights in the UK, and also in other countries, has increased dramatically ever since.

[00:12:19] In 2018 the rights to the Premier League matches were bought by a combination of companies: Sky Sports, BT Sports, and Amazon, for a combined value of €2 billion a season. 

[00:12:36] Obviously, it is a lot of money, and this has been one of the major reasons that the prices paid for footballers, both the prices paid to get them, and their weekly salaries, have reached such stratospheric levels.

[00:12:51] These clubs receive a lot more money from the broadcasting rights than they did 30 years ago, and a large amount of this goes straight on the players. 

[00:13:01] As the Bank of England says, it is, on one level, simple supply and demand.

[00:13:08] Obviously, the football clubs want to have the best players, so that they can have the best chance of winning trophies, so that they can win prize money, they can keep their fans happy, and get new young fans who will support the club for the rest of their life, spending money every year to follow them.

[00:13:27] The clubs have also realised that football players are able to bring in vast amounts of money off the pitch, that the value of a player is much more than just their playing ability. 

[00:13:41] For example, when Cristiano Ronaldo was sold to Real Madrid in 2009, they paid Manchester United £80 million pounds, almost €100 million euros. 

[00:13:53] People at the time said it was a crazy amount of money, but within a year Real Madrid had sold 1.2 million football shirts with the Ronaldo Number 9 on the back - the amount of money the club made just from shirt sales would have practically recouped the amount of money they paid for him.

[00:14:16] And while the footballing world used to be dominated by European clubs, big money from outside Europe is starting to have an impact. 

[00:14:27] There have been a series of players who have been lured to China by sky-high wages, for example the Brazilian Oscar, who is paid a reported €450,000 every single week. 

[00:14:43] While the quality of these Chinese clubs is still nowhere near as high as their European counterparts, they are hoping that the arrival of big-name players from Europe will at least help them get a new generation of fans, sell more stuff and partially offset the huge cost of their wages.

[00:15:04] And back in Europe, there are question marks about what this has done to the actual game of football.

[00:15:12] Certainly ticket prices have increased, with standard ticket prices reaching almost €100 for many English clubs, and making it unaffordable for many fans to go to the games that they want to.

[00:15:27] And in terms of whether this has actually led to better football, a higher quality of the game, this is an everlasting question. 

[00:15:37] Certainly one would be hard-pressed, it would be very difficult, to argue that footballers are now 1,000 times better at the game, even though they are paid in many cases 1,000 times more.

[00:15:52] Yes, perhaps football stadiums might be nicer and safer, and the quality of the game has increased overall, but is it so much better that it is justified for a footballer to earn more in a single day than a nurse or a teacher might do in 10 years?

[00:16:13] Perhaps not, but as the Bank of England rightly points out, this is the law of supply and demand. 

[00:16:21] Football is an increasingly popular sport, and there is only a very small selection of people who can ever be at the top of the game. 

[00:16:30] Millions of people pay to watch them live in a stadium, and hundreds of millions more pay to watch them on TV, with hundreds of millions more buying shirts, computer games, duvet covers, you name it

[00:16:44] And as to the question of whether the prices paid by media companies to show football matches and the amounts of money paid by clubs to footballers can continue to increase, one must surely say that the prices can’t go up forever. 

[00:17:00] There must be some sort of ceiling

[00:17:03] While die-hard football fans might still pay €100 a ticket, would they still pay €200, €500 or €1000? 

[00:17:14] It certainly seems unlikely, but at every point that there has been a price paid for TV rights, for a football player, or for their wages, people have said “that’s mad, it makes absolutely no sense”. 

[00:17:29] And then a few weeks, months, or years pass, the record is broken, and people say exactly the same thing. 

[00:17:37] So it would appear that, so long as there are superstar football players, and so long as it’s a sport that continues to capture the hearts and minds of billions of people from all over the world, there is no limit to how big the business of football can be.

[00:17:55] OK then, that is it for today's episode on When Football Became Big Business.

[00:18:01] I hope it's been an interesting one, that you've learnt something new, and that it’s helped you understand some of the factors that mean that footballers are paid such vast amounts of money.

[00:18:12] As always, I would love to know what you thought of the episode. 

[00:18:15] For the football fans among you, what do you think the impact of there being so much more money in the business has done to the game?

[00:18:24] And whether you are a football fan or not, what do you think of the fact that football players are paid such incredibly high wages

[00:18:32] Or do you think that they’re not high at all, given the value that they provide?

[00:18:38] I would love to know.

[00:18:39] You can jump right in to our community, which is at community.leonardoenglish.com and get chatting away with other curious minds.

[00:18:48] You've been listening to English Learning for Curious Minds, by Leonardo English.

[00:18:53] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.

[END OF EPISODE]


Continue learning

Get immediate access to a more interesting way of improving your English
Become a member
Already a member? Login

[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English. 

[00:00:12] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.

[00:00:22] I'm Alastair Budge and today we are going to be talking about football, and specifically, when football became big business.

[00:00:31] Footballers are some of the best paid people in the entire world, with many earning astronomical amounts of money. 

[00:00:41] But it wasn’t so long ago that the situation was very different.

[00:00:46] So, today we are going to take a look at the history of the business of football, from when it was actually illegal to pay a footballer, through to today, where the very best footballers can be paid millions of euros every single week.

[00:01:03] It’s a really interesting story, so without further ado, let’s get right into it.

[00:01:11] Nowadays, it’s a common thing to hear football players talking about their love for the sport, that the money they make isn’t important, it’s just a number, and that they have such a deep affection for the game that they would play no matter what they were paid.

[00:01:29] You can decide for yourself whether to believe that, but just over 100 years ago it certainly was the case for everyone who played for football clubs in the UK.

[00:01:41] Because they didn’t get paid anything, it was actually illegal to be paid to play football professionally.

[00:01:49] Up until then, football players were only allowed to play at an amateur level, they all had other jobs, football truly was just something they did out of love for the game.

[00:02:03] It was only in 1885 that the Football Association, the organisation that governs the sport in the UK, allowed for footballers to be paid by their clubs.

[00:02:16] But, there were certain restrictions

[00:02:19] A club could pay a player, but only if that player had been born or had lived for two years within 10 kilometres of the stadium. 

[00:02:30] If you think of what that would mean for today’s game, hardly any professional players would qualify.

[00:02:37] At this time, most footballers were still part-time players, they weren’t full-time, professional footballers. 

[00:02:45] Nevertheless, the clubs started to pay them for their work, and for the very best players, they were paid quite well.

[00:02:54] The typical salary for an average working man, in a factory, or a normal job, was around £1 a week at this time, which is around €100 in today’s money.

[00:03:09] But the most skilled footballers were able to command much higher salaries, with some earning up to £10 a week, so that’s around €1000 a week in today’s money. 

[00:03:23] Still, if you are asked to think of a number that footballers now earn, €1000 a week is probably not the one you think of.

[00:03:33] In any case, it was a lot of money back then.

[00:03:37] People thought it was actually too much, and the Football Association proposed a cap, a limit, on the amount of money a footballer could be paid. 

[00:03:48] That limit? 

[00:03:49] It was £4 a week, so around €400 a week in today’s money.

[00:03:57] That limit was introduced from the 1901 season, and there was actually an official maximum wage that an English club could pay footballers until 1961. 

[00:04:12] That limit did increase in line with other salaries, and with inflation, but it was still capped at around double the salary of an industrial worker.

[00:04:25] After the limit was removed, as one might expect, salaries grew and grew.

[00:04:31] Immediately after it was removed, the record was set by the England captain, Johnny Haynes, who was paid £100 a week, which is today’s equivalent of about €2,500.

[00:04:47] €2,500 a week is of course a pretty great salary by most people’s standards, but if you offered a top football player a salary of €2,500 today they would probably laugh in your face.

[00:05:02] Over time, these salary records were broken again and again.

[00:05:07] And in line with the salaries, the transfer fees paid by the clubs, the money the clubs paid each other to buy players from each other, grew and grew, not just inside the UK, but further afield as well.

[00:05:23] In 1961, Luis Suárez Miramontes became the first player to be sold for more than £100,000, when he was sold by Barcelona to Inter Milan for £152k.

[00:05:39] In 1979, Nottingham Forest was the first team to pay £1 million to sign a player, a man called Trevor Francis. 

[00:05:50] And they also became the first club to pay a player more than £1,200 a week, and that lucky man was the England goalkeeper Peter Shilton.

[00:06:02] Diego Maradona, who will actually be the subject of the next episode, broke the record twice, when he was sold from Boca Juniors to Barcelona for £3 million in 1982, then from Barcelona to Napoli for £5 million just two years later.

[00:06:22] Then, starting in the mid 1990s, things really started to really shoot up.

[00:06:29] I can vividly remember Alan Shearer being sold by Blackburn Rovers to Newcastle in 1996 for £15 million, and that being considered an eye-wateringly large amount of money. 

[00:06:45] It's about €30 million in today’s money, not a huge amount of money for a footballer.

[00:06:52] Then Ronaldo, the original Ronaldo, transferred to Inter Milan for £17 million in 1997, Hernan Crespo broke the £30 million mark when he swapped Parma for Lazio in 2000 for today’s equivalent of €56 million.

[00:07:12] And then Zinedine Zidane went from Juventus to Real Madrid in 2001 for a record-breaking 150 billion lire, the equivalent today of around €90 million.

[00:07:26] Zidane’s transfer record lasted for 8 years, perhaps the bubble had burst, and that really was the most that a club could justify paying for a footballer.

[00:07:39] But, of course, since then it has been eclipsed several times, most recently with the €222 million transfer of Neymar from Barcelona to Paris Saint Germain in 2017.

[00:07:54] And, naturally, footballer’s salaries have increased in line with the prices that clubs pay to buy them. 

[00:08:02] The best paid footballer in the world at the moment, Lionel Messi, is set to earn over half a billion euros over the course of his four-year contract at Barcelona.

[00:08:15] So, footballers are paid a lot. And football clubs pay a lot to get footballers.

[00:08:21] But you probably knew this already - what is much more interesting is to ask ourselves….why?

[00:08:29] Yes, football is very popular, there is only room for 22 people to play on the field at any one time, and there are billions of people around the globe who love watching it, so perhaps it’s only natural that the people on the pitch should be paid so much.

[00:08:49] Indeed, there is an article on the Bank of England website which uses football as an example to explain supply and demand economics, showing that the best footballers are in very high demand, and therefore clubs compete to pay the highest salaries for them.

[00:09:10] That is, of course, true, but there are some interesting other elements to the question of why footballers are paid so much, and when and why football became such a big business.

[00:09:24] Really, the most important period for it, at least in the UK, is the year 1992, when the FA Premier League, the Football Association Premiere League, the top league in the country was created. 

[00:09:40] The Premier League was created as a way for the best football clubs in the UK to make more money. 

[00:09:48] Football clubs make money in lots of different ways: from ticket sales, sponsorship, and merchandise, but also through the broadcasting rights, the rights that TV companies pay to show the matches on the television.

[00:10:05] From 1988 to 1992, a TV channel called ITV paid the Football League £11 million a year, which is around €25 million in today’s money, to show live matches.

[00:10:22] It was paid to the English Football League, which would distribute the money to all of the 92 clubs in the Football League.

[00:10:32] For starters this wasn’t much money, and furthermore it was shared between almost 100 different clubs.

[00:10:42] The best clubs in the country thought "this wasn't very fair", and they decided to break away, setting up their own league, the Premier League, and negotiating their own broadcasting deals.

[00:10:56] After a tense negotiating period, the TV broadcasting rights were sold to a company called BSkyB, a satellite TV company, for a record-breaking £304 million, about €500 million in today’s money, over the course of a 5-year period.

[00:11:19] At the time, newspapers questioned how it was possible for it to cost so much - It was almost 10 times what the previous company had paid.

[00:11:30] It was a lot, but it was a lot less than one single footballer, Lionel Messi, is now paid.

[00:11:37] What people hadn’t understood back then was how transformative this would be, and how much money there was to be made from football.

[00:11:48] People questioned whether football fans would be willing to pay for a satellite TV subscription to watch matches. 

[00:11:56] They were, and BSkyB, the company that had shelled out a massive sum for the TV rights made a large profit just the following year.

[00:12:08] And, as you may know, the price for the broadcasting rights in the UK, and also in other countries, has increased dramatically ever since.

[00:12:19] In 2018 the rights to the Premier League matches were bought by a combination of companies: Sky Sports, BT Sports, and Amazon, for a combined value of €2 billion a season. 

[00:12:36] Obviously, it is a lot of money, and this has been one of the major reasons that the prices paid for footballers, both the prices paid to get them, and their weekly salaries, have reached such stratospheric levels.

[00:12:51] These clubs receive a lot more money from the broadcasting rights than they did 30 years ago, and a large amount of this goes straight on the players. 

[00:13:01] As the Bank of England says, it is, on one level, simple supply and demand.

[00:13:08] Obviously, the football clubs want to have the best players, so that they can have the best chance of winning trophies, so that they can win prize money, they can keep their fans happy, and get new young fans who will support the club for the rest of their life, spending money every year to follow them.

[00:13:27] The clubs have also realised that football players are able to bring in vast amounts of money off the pitch, that the value of a player is much more than just their playing ability. 

[00:13:41] For example, when Cristiano Ronaldo was sold to Real Madrid in 2009, they paid Manchester United £80 million pounds, almost €100 million euros. 

[00:13:53] People at the time said it was a crazy amount of money, but within a year Real Madrid had sold 1.2 million football shirts with the Ronaldo Number 9 on the back - the amount of money the club made just from shirt sales would have practically recouped the amount of money they paid for him.

[00:14:16] And while the footballing world used to be dominated by European clubs, big money from outside Europe is starting to have an impact. 

[00:14:27] There have been a series of players who have been lured to China by sky-high wages, for example the Brazilian Oscar, who is paid a reported €450,000 every single week. 

[00:14:43] While the quality of these Chinese clubs is still nowhere near as high as their European counterparts, they are hoping that the arrival of big-name players from Europe will at least help them get a new generation of fans, sell more stuff and partially offset the huge cost of their wages.

[00:15:04] And back in Europe, there are question marks about what this has done to the actual game of football.

[00:15:12] Certainly ticket prices have increased, with standard ticket prices reaching almost €100 for many English clubs, and making it unaffordable for many fans to go to the games that they want to.

[00:15:27] And in terms of whether this has actually led to better football, a higher quality of the game, this is an everlasting question. 

[00:15:37] Certainly one would be hard-pressed, it would be very difficult, to argue that footballers are now 1,000 times better at the game, even though they are paid in many cases 1,000 times more.

[00:15:52] Yes, perhaps football stadiums might be nicer and safer, and the quality of the game has increased overall, but is it so much better that it is justified for a footballer to earn more in a single day than a nurse or a teacher might do in 10 years?

[00:16:13] Perhaps not, but as the Bank of England rightly points out, this is the law of supply and demand. 

[00:16:21] Football is an increasingly popular sport, and there is only a very small selection of people who can ever be at the top of the game. 

[00:16:30] Millions of people pay to watch them live in a stadium, and hundreds of millions more pay to watch them on TV, with hundreds of millions more buying shirts, computer games, duvet covers, you name it

[00:16:44] And as to the question of whether the prices paid by media companies to show football matches and the amounts of money paid by clubs to footballers can continue to increase, one must surely say that the prices can’t go up forever. 

[00:17:00] There must be some sort of ceiling

[00:17:03] While die-hard football fans might still pay €100 a ticket, would they still pay €200, €500 or €1000? 

[00:17:14] It certainly seems unlikely, but at every point that there has been a price paid for TV rights, for a football player, or for their wages, people have said “that’s mad, it makes absolutely no sense”. 

[00:17:29] And then a few weeks, months, or years pass, the record is broken, and people say exactly the same thing. 

[00:17:37] So it would appear that, so long as there are superstar football players, and so long as it’s a sport that continues to capture the hearts and minds of billions of people from all over the world, there is no limit to how big the business of football can be.

[00:17:55] OK then, that is it for today's episode on When Football Became Big Business.

[00:18:01] I hope it's been an interesting one, that you've learnt something new, and that it’s helped you understand some of the factors that mean that footballers are paid such vast amounts of money.

[00:18:12] As always, I would love to know what you thought of the episode. 

[00:18:15] For the football fans among you, what do you think the impact of there being so much more money in the business has done to the game?

[00:18:24] And whether you are a football fan or not, what do you think of the fact that football players are paid such incredibly high wages

[00:18:32] Or do you think that they’re not high at all, given the value that they provide?

[00:18:38] I would love to know.

[00:18:39] You can jump right in to our community, which is at community.leonardoenglish.com and get chatting away with other curious minds.

[00:18:48] You've been listening to English Learning for Curious Minds, by Leonardo English.

[00:18:53] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.

[END OF EPISODE]


[00:00:00] Hello, hello hello, and welcome to English Learning for Curious Minds, by Leonardo English. 

[00:00:12] The show where you can listen to fascinating stories, and learn weird and wonderful things about the world at the same time as improving your English.

[00:00:22] I'm Alastair Budge and today we are going to be talking about football, and specifically, when football became big business.

[00:00:31] Footballers are some of the best paid people in the entire world, with many earning astronomical amounts of money. 

[00:00:41] But it wasn’t so long ago that the situation was very different.

[00:00:46] So, today we are going to take a look at the history of the business of football, from when it was actually illegal to pay a footballer, through to today, where the very best footballers can be paid millions of euros every single week.

[00:01:03] It’s a really interesting story, so without further ado, let’s get right into it.

[00:01:11] Nowadays, it’s a common thing to hear football players talking about their love for the sport, that the money they make isn’t important, it’s just a number, and that they have such a deep affection for the game that they would play no matter what they were paid.

[00:01:29] You can decide for yourself whether to believe that, but just over 100 years ago it certainly was the case for everyone who played for football clubs in the UK.

[00:01:41] Because they didn’t get paid anything, it was actually illegal to be paid to play football professionally.

[00:01:49] Up until then, football players were only allowed to play at an amateur level, they all had other jobs, football truly was just something they did out of love for the game.

[00:02:03] It was only in 1885 that the Football Association, the organisation that governs the sport in the UK, allowed for footballers to be paid by their clubs.

[00:02:16] But, there were certain restrictions

[00:02:19] A club could pay a player, but only if that player had been born or had lived for two years within 10 kilometres of the stadium. 

[00:02:30] If you think of what that would mean for today’s game, hardly any professional players would qualify.

[00:02:37] At this time, most footballers were still part-time players, they weren’t full-time, professional footballers. 

[00:02:45] Nevertheless, the clubs started to pay them for their work, and for the very best players, they were paid quite well.

[00:02:54] The typical salary for an average working man, in a factory, or a normal job, was around £1 a week at this time, which is around €100 in today’s money.

[00:03:09] But the most skilled footballers were able to command much higher salaries, with some earning up to £10 a week, so that’s around €1000 a week in today’s money. 

[00:03:23] Still, if you are asked to think of a number that footballers now earn, €1000 a week is probably not the one you think of.

[00:03:33] In any case, it was a lot of money back then.

[00:03:37] People thought it was actually too much, and the Football Association proposed a cap, a limit, on the amount of money a footballer could be paid. 

[00:03:48] That limit? 

[00:03:49] It was £4 a week, so around €400 a week in today’s money.

[00:03:57] That limit was introduced from the 1901 season, and there was actually an official maximum wage that an English club could pay footballers until 1961. 

[00:04:12] That limit did increase in line with other salaries, and with inflation, but it was still capped at around double the salary of an industrial worker.

[00:04:25] After the limit was removed, as one might expect, salaries grew and grew.

[00:04:31] Immediately after it was removed, the record was set by the England captain, Johnny Haynes, who was paid £100 a week, which is today’s equivalent of about €2,500.

[00:04:47] €2,500 a week is of course a pretty great salary by most people’s standards, but if you offered a top football player a salary of €2,500 today they would probably laugh in your face.

[00:05:02] Over time, these salary records were broken again and again.

[00:05:07] And in line with the salaries, the transfer fees paid by the clubs, the money the clubs paid each other to buy players from each other, grew and grew, not just inside the UK, but further afield as well.

[00:05:23] In 1961, Luis Suárez Miramontes became the first player to be sold for more than £100,000, when he was sold by Barcelona to Inter Milan for £152k.

[00:05:39] In 1979, Nottingham Forest was the first team to pay £1 million to sign a player, a man called Trevor Francis. 

[00:05:50] And they also became the first club to pay a player more than £1,200 a week, and that lucky man was the England goalkeeper Peter Shilton.

[00:06:02] Diego Maradona, who will actually be the subject of the next episode, broke the record twice, when he was sold from Boca Juniors to Barcelona for £3 million in 1982, then from Barcelona to Napoli for £5 million just two years later.

[00:06:22] Then, starting in the mid 1990s, things really started to really shoot up.

[00:06:29] I can vividly remember Alan Shearer being sold by Blackburn Rovers to Newcastle in 1996 for £15 million, and that being considered an eye-wateringly large amount of money. 

[00:06:45] It's about €30 million in today’s money, not a huge amount of money for a footballer.

[00:06:52] Then Ronaldo, the original Ronaldo, transferred to Inter Milan for £17 million in 1997, Hernan Crespo broke the £30 million mark when he swapped Parma for Lazio in 2000 for today’s equivalent of €56 million.

[00:07:12] And then Zinedine Zidane went from Juventus to Real Madrid in 2001 for a record-breaking 150 billion lire, the equivalent today of around €90 million.

[00:07:26] Zidane’s transfer record lasted for 8 years, perhaps the bubble had burst, and that really was the most that a club could justify paying for a footballer.

[00:07:39] But, of course, since then it has been eclipsed several times, most recently with the €222 million transfer of Neymar from Barcelona to Paris Saint Germain in 2017.

[00:07:54] And, naturally, footballer’s salaries have increased in line with the prices that clubs pay to buy them. 

[00:08:02] The best paid footballer in the world at the moment, Lionel Messi, is set to earn over half a billion euros over the course of his four-year contract at Barcelona.

[00:08:15] So, footballers are paid a lot. And football clubs pay a lot to get footballers.

[00:08:21] But you probably knew this already - what is much more interesting is to ask ourselves….why?

[00:08:29] Yes, football is very popular, there is only room for 22 people to play on the field at any one time, and there are billions of people around the globe who love watching it, so perhaps it’s only natural that the people on the pitch should be paid so much.

[00:08:49] Indeed, there is an article on the Bank of England website which uses football as an example to explain supply and demand economics, showing that the best footballers are in very high demand, and therefore clubs compete to pay the highest salaries for them.

[00:09:10] That is, of course, true, but there are some interesting other elements to the question of why footballers are paid so much, and when and why football became such a big business.

[00:09:24] Really, the most important period for it, at least in the UK, is the year 1992, when the FA Premier League, the Football Association Premiere League, the top league in the country was created. 

[00:09:40] The Premier League was created as a way for the best football clubs in the UK to make more money. 

[00:09:48] Football clubs make money in lots of different ways: from ticket sales, sponsorship, and merchandise, but also through the broadcasting rights, the rights that TV companies pay to show the matches on the television.

[00:10:05] From 1988 to 1992, a TV channel called ITV paid the Football League £11 million a year, which is around €25 million in today’s money, to show live matches.

[00:10:22] It was paid to the English Football League, which would distribute the money to all of the 92 clubs in the Football League.

[00:10:32] For starters this wasn’t much money, and furthermore it was shared between almost 100 different clubs.

[00:10:42] The best clubs in the country thought "this wasn't very fair", and they decided to break away, setting up their own league, the Premier League, and negotiating their own broadcasting deals.

[00:10:56] After a tense negotiating period, the TV broadcasting rights were sold to a company called BSkyB, a satellite TV company, for a record-breaking £304 million, about €500 million in today’s money, over the course of a 5-year period.

[00:11:19] At the time, newspapers questioned how it was possible for it to cost so much - It was almost 10 times what the previous company had paid.

[00:11:30] It was a lot, but it was a lot less than one single footballer, Lionel Messi, is now paid.

[00:11:37] What people hadn’t understood back then was how transformative this would be, and how much money there was to be made from football.

[00:11:48] People questioned whether football fans would be willing to pay for a satellite TV subscription to watch matches. 

[00:11:56] They were, and BSkyB, the company that had shelled out a massive sum for the TV rights made a large profit just the following year.

[00:12:08] And, as you may know, the price for the broadcasting rights in the UK, and also in other countries, has increased dramatically ever since.

[00:12:19] In 2018 the rights to the Premier League matches were bought by a combination of companies: Sky Sports, BT Sports, and Amazon, for a combined value of €2 billion a season. 

[00:12:36] Obviously, it is a lot of money, and this has been one of the major reasons that the prices paid for footballers, both the prices paid to get them, and their weekly salaries, have reached such stratospheric levels.

[00:12:51] These clubs receive a lot more money from the broadcasting rights than they did 30 years ago, and a large amount of this goes straight on the players. 

[00:13:01] As the Bank of England says, it is, on one level, simple supply and demand.

[00:13:08] Obviously, the football clubs want to have the best players, so that they can have the best chance of winning trophies, so that they can win prize money, they can keep their fans happy, and get new young fans who will support the club for the rest of their life, spending money every year to follow them.

[00:13:27] The clubs have also realised that football players are able to bring in vast amounts of money off the pitch, that the value of a player is much more than just their playing ability. 

[00:13:41] For example, when Cristiano Ronaldo was sold to Real Madrid in 2009, they paid Manchester United £80 million pounds, almost €100 million euros. 

[00:13:53] People at the time said it was a crazy amount of money, but within a year Real Madrid had sold 1.2 million football shirts with the Ronaldo Number 9 on the back - the amount of money the club made just from shirt sales would have practically recouped the amount of money they paid for him.

[00:14:16] And while the footballing world used to be dominated by European clubs, big money from outside Europe is starting to have an impact. 

[00:14:27] There have been a series of players who have been lured to China by sky-high wages, for example the Brazilian Oscar, who is paid a reported €450,000 every single week. 

[00:14:43] While the quality of these Chinese clubs is still nowhere near as high as their European counterparts, they are hoping that the arrival of big-name players from Europe will at least help them get a new generation of fans, sell more stuff and partially offset the huge cost of their wages.

[00:15:04] And back in Europe, there are question marks about what this has done to the actual game of football.

[00:15:12] Certainly ticket prices have increased, with standard ticket prices reaching almost €100 for many English clubs, and making it unaffordable for many fans to go to the games that they want to.

[00:15:27] And in terms of whether this has actually led to better football, a higher quality of the game, this is an everlasting question. 

[00:15:37] Certainly one would be hard-pressed, it would be very difficult, to argue that footballers are now 1,000 times better at the game, even though they are paid in many cases 1,000 times more.

[00:15:52] Yes, perhaps football stadiums might be nicer and safer, and the quality of the game has increased overall, but is it so much better that it is justified for a footballer to earn more in a single day than a nurse or a teacher might do in 10 years?

[00:16:13] Perhaps not, but as the Bank of England rightly points out, this is the law of supply and demand. 

[00:16:21] Football is an increasingly popular sport, and there is only a very small selection of people who can ever be at the top of the game. 

[00:16:30] Millions of people pay to watch them live in a stadium, and hundreds of millions more pay to watch them on TV, with hundreds of millions more buying shirts, computer games, duvet covers, you name it

[00:16:44] And as to the question of whether the prices paid by media companies to show football matches and the amounts of money paid by clubs to footballers can continue to increase, one must surely say that the prices can’t go up forever. 

[00:17:00] There must be some sort of ceiling

[00:17:03] While die-hard football fans might still pay €100 a ticket, would they still pay €200, €500 or €1000? 

[00:17:14] It certainly seems unlikely, but at every point that there has been a price paid for TV rights, for a football player, or for their wages, people have said “that’s mad, it makes absolutely no sense”. 

[00:17:29] And then a few weeks, months, or years pass, the record is broken, and people say exactly the same thing. 

[00:17:37] So it would appear that, so long as there are superstar football players, and so long as it’s a sport that continues to capture the hearts and minds of billions of people from all over the world, there is no limit to how big the business of football can be.

[00:17:55] OK then, that is it for today's episode on When Football Became Big Business.

[00:18:01] I hope it's been an interesting one, that you've learnt something new, and that it’s helped you understand some of the factors that mean that footballers are paid such vast amounts of money.

[00:18:12] As always, I would love to know what you thought of the episode. 

[00:18:15] For the football fans among you, what do you think the impact of there being so much more money in the business has done to the game?

[00:18:24] And whether you are a football fan or not, what do you think of the fact that football players are paid such incredibly high wages

[00:18:32] Or do you think that they’re not high at all, given the value that they provide?

[00:18:38] I would love to know.

[00:18:39] You can jump right in to our community, which is at community.leonardoenglish.com and get chatting away with other curious minds.

[00:18:48] You've been listening to English Learning for Curious Minds, by Leonardo English.

[00:18:53] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.

[END OF EPISODE]