Business of Soccer

The specific word “soccer” was developed in the 1880s in the Oxford University. There was a custom there to use “er” to the end of words they used in a short form. Thus the short name for rugby football had been shortened to “rugger.” The word soccer was the reply given by a student named Charles Wreford Brown, when he was questioned about his wish to play “rugger.” He expressed his desire to play soccer instead. The form was obtained by the shortening of the word AsSOCiation football. Afterwards, the football league was started and the first goal was scored by Jack Gordon, playing for Preston North End (The Essential History of Soccer). The earliest form of football was an exercise in China which dates back to the 2nd and 3rd centuries, BC. At that time, the rulers were the Han dynasty and they had a form of physical education called the “Tsu’Chu.” This form of exercise was to kick a leather ball which was filled with feathers and hair. The ball was to pass through a small opening of 30 to 40 cm. In width into a small net, and the net was fixed into long bamboo canes.

There was another variation of the same game where the player not to kick the ball into the “goal,” but to use his feet, chest, back and shoulders in moving the ball while his opponents tried to stop him. The use of hands was not permitted in this game. Another game was played in Japan called Kemari from about 500 or 600 years later, and is still played today. This is a game in which the players stand in a circular mode with the players passing the ball from one to the other, but here there is no great effort at getting the possession of the ball. The only difficulty is that in the passing exercise, the ball should not touch the ground. There was also the Greek game called “episkyros,” and the Roman game “Harpastum.” In the Roman game, it was played on a rectangular field with a center line. The aim was to get the ball to cross the opponent’s boundary lines. This game had also come to England with the Romans, but, it cannot be said that this was the origin of the present day game of football. The related games of rugby and soccer started in 1863 in England when the two games were controlled by two different associations. (Soccer History)

Industry Landscape:

The world has changed to a situation where entertainment is now the largest industry in terms of the volume of business and the people employed. Among the areas of entertainment, sports are the second biggest area after tourism. This has resulted in a situation where the American sports economic complex got sales worth2% of the gross domestic product or $152 billion in 1995. This figure is based on the calculation of the Bureau of Economic Analysis and the Economic Development Institute. This is expected to go up further to 3.5%. Among all the games in the world, soccer was the first to become international and also have a distribution wide enough to be called a global game. The efforts started first after 1974 World Cup through FIFA. There was a joint effort from the international marketing firms, companies making sporting goods, and the major network television units. This made FIFA the largest organizer of sports in the world, and a rival of the International Olympic Committee. It has a huge audience as it is played by nearly one billion people, and gets business of almost $260 billion every year and the World Cup gets an audience of nearly 36 billion. The details are available in the appendices (Soccer as an Economic Sector).

The game has fired up the imagination of the children and adolescents, and the highest attraction is among the poorest of the people, as they feel that they can use soccer to find a way out of their social difficulties. This feeling of being able to use soccer for social transformed into being used for social integration and strengthening of bonds between people. The fact that it is now an international game has also led to a situation where the transfer market and player contracts of soccer have become international. The salaries of International stars are now determined by the international market (Soccer as an Economic Sector). One of the soccer stars, David Beckham is probably the best known sports star in the world.

According to Sports Illustrated, he is estimated to be earning nearly $30 million a year, and in terms of money that is less than the earnings of Tiger Woods and Racing Driver Michael Schumacher. His face sells everything for motor oil to cell phones to Japanese chocolates, and his body likeness is even venerated in a Thai temple. In Britain, Beckham and his wife have replaced Princess Diana as the head of the celebrity culture, and the couple is adored by people of all ages, men and women, everybody. Yet, the club that he used to play for, United has not been able to make money without selling its players, and in terms of sporting prowess, the club has only won the European Club championship twice. (Brand It like Beckham).

The club which bought Beckham, Real Madrid has won the same championship nine times, and through adding Beckham, the club expects to get fans in England and Japan now and accordingly gone on the Internet in these languages. This could not have been done earlier, as there were strict restrictions on the number of non-nationals that a club could use. These rules were viewed as protectionist rules by the European Court of Justice in 1995, and this has opened up the transfer market in all over Europe. In the new club, Beckham will be playing along with other stars from England, Portugal, France, Brazil and the Congo. Even in England, there are now two managers from France in the clubs of Liverpool and Arsenal (Brand It like Beckham).

In terms of the development of the game, this is harming the game in the smaller markets in terms of club revenues. The clubs in those markets are not being able to retain their good players. The change came to the European clubs in the 1990s. The situation for the game and clubs had become very bad with no respect for fans and an amateurish approach to the game. Today the clubs are concentrating on the profit target that all businessmen have. England has become the center for professional and well managed soccer. The major clubs there are quoted on the stock exchange, and this is in spite of their history of not being permitted to play in many European tournaments in the past due to the violent behavior of their fans. (Soccer as an Economic Sector)

To achieve these changes, there was political action taken by the government in collaboration with the clubs and the federation. Laws were changed by the government to permit the modernization of the clubs. Strong measures were taken to stop vandalism and violence in the stadiums and nearby localities. A lot of finance was provided to the clubs through help in their tax and labor cost related loans. It is now realized that the main asset of the clubs is the passion for the club among the fans, and this sort of passion has a very high emotional content. Thus the strong club name has to be supported by excellent teams. This permits the club to give good performances, and that increases the value of the brand name of the club. This increase in the brand name permits the club to increase its earnings through business opportunities, and the increased earnings are expected to provide better returns. This has increased the demand and transfer rates for the players, as also their salaries. Due to all these changes, only five among the clubs usually show profits, and the others can show profits only when they sell their players. (Soccer as an Economic Sector)

Marketing Developments:

All clubs in soccer use their own methods to boost up the image of their clubs and their revenues. One of the biggest clubs is currently Manchester United or Man U. As it is commonly known. The revenue base of the club is nearly $200 million a year and is lower than only Washington Redskins and the New York Yankees among all international sports teams. The clubs goes into exhibition tours and the matches there regularly fill up stadiums with seating capacities of 85,000. The club also sells souvenirs in shops across Southeast Asia and those shops regularly have annual sales of millions of dollars. The games are also watched in pubs all around the world through satellite TV. The next aim on the plan of this club is the entry into United States, and the campaign for this purpose has already begun. Their operation will give any other organization as to how a marketing campaign can be conducted for a soccer club. The first effort of the club is to make sure that the delayed games of the club are broadcast on the new YES network, and for this purpose a deal has been signed by the club with YankeeNets LLC, which is the parent company for the Yankees and New Jersey Nets. (Insight on the news)

There will also be exhibition tours for matches against Major League Soccer clubs. The name of the club will be promoted by Nike through a 13-year, $430 million marketing and licensing contract. This is expected to make the club a household name. The reason for the fame of Manchester United is the same – explosive growth, along with dominance on the field. From 1993, the team has won seven titles in the English premier league, and these include the title for three consecutive years. Apart from this the club has won nine other league titles from 1908, ten FA Challenge Cup titles, two European Championship Club cup titles and one World Club Championship. In the meantime, the club is undergoing a lot of change in leadership and the chairman, Sir Roland Smith is retiring and Roy Gardner will be taking charge. The person in charge of day-to-day operations will still be Kenyon and the change in management is not expected to stop the international push of the club. (Insight on the news)

The situation of finances in sports is improving throughout the world, and the situation even in Germany has improved. In 1998, the sports related gross domestic product amounted to nearly 53 billion DM in Germany and this is nearly 1.4% of the total GDP of around 3,799 billion DM. In terms of expenditure in sports, the German citizen spent nearly 40.6 billion DM on sports during 1998. When the figure is compared to the total household consumption, this amounts to roughly around 1.9% of the total household consumption. The expenditure is comparable with the expenditure on tobacco or personal care products. The government also provides funds totaling to 11.5 billion DM for sport through the different bodies at the federal, state and local governments. This shows that about 1.5percent of the total consumption of the total government is for use by sport. Apart from this direct expenditure, the government has granted subsidies worth 1.4 billion DM to the sport clubs and sports associations. (The Economic Effects of the Soccer World Cup 2006 in Germany with Regard to Different Financing)

The government does not provide much money for the clubs to build up the infrastructure, as the sports infrastructure is supposed to be built up by the local government, as also the construction of the club’s own infrastructure. The finances for this are shared between the states, communities and sports clubs. There was also the employment of a large number of people, 783,000 in all. They amount to more than 2.4% of all employees and they were all directly related to sports. This also shows that as many people are employed in sports as are employed in banking. Of course the number includes people in certain jobs where social insurance was not compulsory like exercise therapists and secondary trainers. The presence of this group of employees clearly shows that the high quality sport services offered by the sports clubs. (The Economic Effects of the Soccer World Cup 2006 in Germany with Regard to Different Financing)

Soccer in the U.S.

The game has started to succeed in the U.S. with the building of new stadiums, and they are expected to become the stores for fond memories, team pride and all the rest that is associated with football. One of the latest stadiums was built in the National Training Center in Carson, California. This is the second biggest stadium in the country after the Crew Stadium in Columbus, Ohio. The stadium is the home for the tem, Los Angeles Galaxy as also the U.S. national team and the federation itself. The stadium has a seating capacity of 27,000. It is the center of attraction of a large 85 acre sports complex. This is large complex with 10 locker rooms, two training rooms, a weight room, a players’ lounge, laundry facilities and space for office and storage. The coaches and the referees will also be able to use the center for their training programs. The club, Galaxy based at the center will now be free to determine its own training schedule and this will provide it more time to assess the incoming talent. The training facility could also be used by foreign clubs and thus be a commercial proposition.

Steps are being taken towards this, and the city of Los Angeles is trying for a relationship with the club of River Plate in Argentina. This club comes for training in California in June, when they had also played exhibition matches. This was recognized by the club management who said that they were aware of the fact that foreign clubs trained around the world, and they were keen to provide a place for the foreign clubs to train. The place could be used by these clubs for preparing for the regional and national championships. The agreement could be through leases or some type of partnership agreements, in which case the expenses of the clubs would be lower. The main method of making money for the club would be through the control of the concessions and the revenue they expected to earn from parking. (There’s no place like home: the new home of U.S. Soccer doesn’t open until next year, but it’s already the sport’s most important domestic development since MLS)

The ground will also have unique facilities that is not available to many other grounds, and that is a team store and a restaurant with a sitting capacity for 450 people. The stadium of course will earn a lot of money through ticket sales and here also there are new thoughts. The seats will be low in number, so that they will not be available very easily. The stadium will be European in style, and the stands are expected to be rectangular so that the audience can be closer to the scene of action – only 24 feet away from the sidelines. This is also the feature in the other major stadium in the country called the crew stadium which has a rectangular shape, seats close to the field and the relatively low seating capacity of 22,555. That stadium had opened in 1999, and has consistently recorded good attendance from the beginning. (There’s no place like home: the new home of U.S. Soccer doesn’t open until next year, but it’s already the sport’s most important domestic development since MLS)

The building of this stadium is being carried forward with the building of other stadiums for other major clubs in the United States. These include a stadium for the city of Harrison, NJ and a stadium for the MetroStars. There are also plans for building up a stadium in collaboration with the DC Sports and Entertainment Commission in Washington about a new stadium for United. There are also plans for new grounds in Dallas and Kansas City. The main problem to the further development has been due to the finance problems of the billionaire, Philip Anschutz, who had been supporting all this activity. His company called Qwest Communications has been in trouble. The construction of new stadiums is seen by every country as essential to the development of the game. (There’s no place like home: the new home of U.S. Soccer doesn’t open until next year, but it’s already the sport’s most important domestic development since MLS)

The game is also rapidly spreading among the future citizens and the leading role in this is being taken by the Soccer Association for Youth (SAY) and they are working in the project for over three years. The aim is to develop a special program for children in the economically stressed communities. The name for the program is HOPES, a short form for Honoring Opportunities to Participate Equally in Soccer. The program consists of providing a day of fun to children who may not otherwise be able to play soccer. It also provides professional training to these children. The event is in the form of “stations” through which the children go around. These different stations teach the children the arts of soccer like dribbling, passing and scoring, playing 5 man team games, instructions from British soccer camps, involvement with local police and fire departments, getting close to professional athletes for autograph and interaction sessions and some other sources of fun. The centers at individual communities can receive the free equipment from SAY for the purpose and the United States Soccer Foundation is expected to continue this program. (Bringing soccer to your kids)

The history of soccer in United States is linked with Lamar Hunt, and he has three teams in major league soccer: the Columbus Crew, the Kansas City Wizards and the Dallas Burn. To him the biggest reason for the league not taking off is the lack of soccer specific stadiums. He is well aware of the fact that the success of soccer depends on the stadiums that exist. To find out the details of good stadiums, he went on fact finding rips to all the 20 stadiums that were used for the World Cup, at the age of 70. He has taken photographs of each stadium and studied the facilities available in each stadium. To him the ideal soccer player in United States is Brian McBride and he can be marketed very easily. He has participated in major league soccer for seven years, and not left American soccer to play in other countries. He is viewed to be good enough on magazine and newspaper covers. Another aspect that has impressed him is the passion of some countries for the game.

In Korea when the Koreans were playing, all the supporters of the Korean team were dressed in the team colors and cheering the team for its good performance. The supporters of the American team were only about 2,000 and they were dressed in the team colors, but they could not give the team similar support. In terms of success, the game has succeeded, and soccer has the largest participation of youth among all games in the U.S. It has also succeeded at the level of the schools, colleges and club teams. Even the women have taken to soccer. The players from U.S. have also succeeded in being taken on as players in Europe, which would not have been possible to even think about a few years ago. (The first father: one of soccer’s longtime supporters explains why he thinks it will become a major sport in the U.S.)

Soccer has along history in the U.S., and it has been playing in the Olympics for many years, and may be noted for its failure to go beyond the first round after 1924. The situation has been changing with the development of soccer in United States. The country has gone to the Olympics for as many as 11 times. Last time, the Americans had good success and this was in part due to the strong attacking side they had. The draw was also quite favorable to them. The draw placed them in a group with Czech Republic, Cameroon and Kuwait. The coach of the team was also a balanced man with clear ideas about his job. The matches of the team were also fixed in a manner that suited them with their schedule of matches being with Czech Republic first, then with Cameroon and finally with Kuwait.

This made them expect a place in the quarter finals. The treatment of the team by the coach had also been good and he had treated the players like men and not boys. When the Americans failed in soccer in the past, the team management and the coaches had complained that the team was too young to do well. The players were being commended on their performance as students just out of college and competing with teams who had a lot of professionals. The team was also quite strong with a good goal-keeper, Adin Brown of Colorado Rapids. The other good regular players in the team were Brian Dunseth, Chad McCarty and Ramiro Corrales. The weak spot was the fullback, where Cherundolo, went out of the team due to injuries. The forwards of the team were good with people like Chris Albert and Ben Olsen in the team. They are the future stars of United States soccer. Other great successes of the team were expected to be Josh Wolff, Thorrington, Donovan and DaMarcue Beasley. (Beginning of a New Age)

These players played well in the Olympics. Comparing the team with others was difficult as the teams containing players under 23 continuously keep changing, and that is why it is very difficult to say which team will dominate the Olympics. This has happened even with established teams like Italy which could not perform very well in the 1996 Olympics and did not go beyond the first round in spite of being a world power. Instead, Nigeria became the first African nation to take the Olympic gold, though it was not considered as a great team. Brazil has performed very well in the World Cup with a tally of five World Cups, but has never been very successful at the Olympics. This is the beauty of soccer where the chances of success and failure may be just the difference of one goal. This has happened to U.S. many times in their campaign for the Olympics and now even for the World Cup. The U.S. had also won Olympic matches quite a few times, but never gone very far (Beginning of a New Age).

Thus the U.S. has all the basic ingredients for the development for soccer including players, developing stadiums and professional teams. What it now requires is for crowds to fill up the stadiums, and for the rewards to be made attractive for the players. Once that is done, the U.S. will also become a great nation in soccer.

Appendices:

Type of sports

References

Brand It like Beckham” Retrieved at http://www.time.com/time/columnist/elliott/article/0,9565,460400,00.html. Accessed on 12 April, 2004

Bringing soccer to your kids” Dec, 2002 Retrieved at http://www.findarticles.com/cf_dls/m1145/12_37/96620922/p1/article.jhtml. Accessed on 12 April, 2004

D’Hippolito, Joseph. “There’s no place like home: the new home of U.S. Soccer doesn’t open until next year, but it’s already the sport’s most important domestic development since MLS” Oct-Nov, 2002 Retrieved at http://www.findarticles.com/cf_dls/m0FCN/4_25/92201931/p3/article.jhtml-termAccessed on 12 April, 2004

Fischer, Eric. “Insight on the news” May 27, 2002. Retrieved at http://www.findarticles.com/cf_dls/m1571/19_18/87024947/p1/article.jhtml. Accessed on 12 April, 2004

Hutchison, Bill. “The Essential History of Soccer” Retrieved at http://worldsoccer.about.com/cs/historyandstats/a/sochist_2.htm. Accessed on 12 April, 2004

Lewis, Michael. “Beginning of a New Age” August, 2000 Retrieved at http://www.findarticles.com/cf_dls/m0FCN/3_23/63917333/p1/article.jhtml. Accessed on 12 April, 2004

Lewis, Michael. “The first father: one of soccer’s longtime supporters explains why he thinks it will become a major sport in the U.S.” Dec, 2002 Retrieved at http://www.findarticles.com/cf_dls/m0FCN/5_25/94261165/p1/article.jhtml. Accessed on 12 April, 2004

Soccer as an Economic Sector” Retrieved at http://www.iadb.org/vpo/seminars/sport/pelesport.pdf. Accessed on 12 April, 2004

Soccer History” Retrieved at http://www.wsoccer.com/history_and_rules/soccer_history.htm. Accessed on 12 April, 2004

The Economic Effects of the Soccer World Cup 2006 in Germany with Regard to Different Financing” Retrieved at http://kiepia.kiep.go.kr/project/economy.nsf/3DFABA7E6E42550349256BBC001D6047/$file/worldcup2006.pdf. Accessed on 12 April, 2004

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