Op-ed Personal Finance

An Ideal Soccer Franchise

As a young entrepreneur, I have always been interested in sports franchises, and I have always considered owning a soccer club franchise in the near future. Thus I have learned that this is a huge responsibility. Not only you are a leader of a very complex form of business, but also you are responsible for the happiness and/or misery of the community. Therefore I have realized that a typical sport franchise should be located in an urban area. It also should strongly reflect the culture of the community, and its profits and activities should contribute integrally to the economic and social development of the community.

Humans’ brain is wired in mysterious ways. The Amygdala, along with the Hippocampus, the Septal Nuclei and the Thalamus, plays a part in the emotions of love and affection. In similar fashion like a boy falls in love with a girl, people have developed affection and love towards the world of sports over time. Thus sports teams owe to the fans loyalty, respect and a return on their civic investment. When a sport franchise is very successful, it becomes not only a lucrative source of income for the owner, but also a source of joy for the supporters and the community. People become highly associated with the team, and that means emotions: good and bad, go with that. Fans will sometimes commit suicide because their team has lost a game.

European soccer teams used to look forward to playing Chelsea F.C, and more often beat them, but that was long before Roman Abrahimovic’s empire swept into West London and altered the premier league landscape. When Roman bought Chelsea F.C, success has been the anthem since. Domestically and internationally, Chelsea have won four 14 cups in five different competitions. These drastic changes have been built by Roman’s philosophy. Apart from investing billions of pounds in Chelsea, he has also crafted fundamental ideals that have changed Chelsea from an underdog team to a successful sport franchise it is today. He has rebuilt Chelsea based on the rich culture of west London. He has started the Chelsea foundation which brought together the Football in the Community and the Education department along with the club’s other charitable and community activities, including environment and anti-discrimination projects. And last but not least, he has emphasized a physical presence of Chelsea in London by ordering that all the offices, and Chelsea’s activities be based in London.

The economic justification of the prices paid for professional sports franchises—based on traditional pricing metrics, such as price/earnings multiples—is often difficult because many sports franchises do not generate positive accounting earnings. Yet, when it is well managed, a sport franchise can be an improbable economic powerhouse. Big clubs around the world report profits in millions of dollars each year. These magnanimous profits should be used to produce some forms of return on a massive civic investment. As a result, fans should benefit from the exponential growth of the franchise’s revenues. For example, fans should be allowed to buy cut-price tickets.

It is commonly admitted that some people will instead suggest that a soccer franchise be built in the rural area because the land is cheaper, but this is for a short term purpose. For visionaries, a soccer franchise that operates in big cities is more successful. This has a direct correlation between the income of supporters, the number of supporters and the spending ability of the fans. In fact, fans in urban area have generally higher income than the fans in rural settings. They are more committed to the teams, and in most cases they will choose to watch and support their team as a pastime. Thus, they will use their money to support the team. One should also mention that big cities are richer; therefore, they have more money available to fund private franchises.

In late 1886, a gaggle of workers from the Woolwich Arsenal Armament Factory decided to form a football team. They called themselves Dial Square as a reference to the sundial atop the entrance to the factory. The name Dial Square was later changed to Arsenal to reflect the Woolwich Arsenal Armament Factory. Until today, Arsenal football club has always used an image of an arsenal as their logo. This is not just a particularity of Arsenal; every successful soccer franchise should reflect the rich history of the club and of the community that surrounds it. Successful soccer teams should build a rich heritage and record of innovation in the community. The likes of Arsenal, Real Madrid, and other big soccer franchises have a rich culture build over time. This culture ensures immortality of the club, and it induces the exponential growth of the franchise over time.

My dream of owning a soccer franchise is shared by a bigger group of young entrepreneurs. While pondering ideas with my fellow future engineers, and entrepreneurs, it has been apparent to me that basic entrepreneurial practices of innovation, transparency and good management of business associates are known by most of us. The ideal soccer franchise should be bound by practices of innovation, good managerial practices, hard work… But it should retain the previously discussed points. When found in an urban area, when it reflects the culture of the community and when it returns to the community its civic investment, success is inevitable.

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