Business » Companies
Author`s name Dmitry Sudakov

Russia's FC Zenit to make millions of dollars on fans

Russia's FC Zenit to make millions of dollars on fans. 45322.jpegRussia's football club Zenit is going to promote its official merchandise in Europe. For the time being, Zenit remains the only Russian club, which tries to succeed in classic football business.

Nielsen, a research company, conducted an opinion poll among 19,000 men and women aged from 14 to 55. The poll showed promising results for the club: the people spend 1,900 rubles ($65) a year vs. 20.3-58 EUR over the same period (according to Sport+Markt).

The club needed the data to make a business forecast for the federal expansion of retail products, as well as for the development of the commercial network.

Zenit is the ultimate Russian leader when it comes to the distribution of the official merchandise for fans. In St. Petersburg, the club has 16 official shops that sell flags, scarves, souvenirs, uniforms, shoes, training collections and every-day clothes.

For comparison, another extremely popular club - CSKA - has only one shop in Moscow. Spartak has four, one of which is a franchise. Merchandise sales do not bring much profit for the budgets of those clubs.

Merchandise does not bring much income to Zenit either, but the club gains millions of dollars from it. In 2010, the profit made up $12 million. The total revenue of the football club from commercial activities in 2010 made up $59 million. Thus, the official shops returned five percent of the total revenue in 2010. The number became even higher than the club administration expected.

"This year, the income from selling sports clothes, uniforms and merchandise is expected to make up $10 million. In four or five years, we plan that the income will grow up to $40-45 million a year," Alexander Dyukov, the President of Zenit told Vesti in June 2010.

Zenit intends to expand and renew the range of its products. The club also intends to develop the distribution network.

It seems that this is the only example of the classic marketing approach in Russian football. Russia knows how to hit record highs when spending money, but the country has not learned how to make record profits yet.

Last year, the budget of the Russian Premier League totaled $558 million. This year, the number has grown to $947 million, Finance magazine wrote.

Russian football clubs spend a lot more than 18 clubs of the top Spanish division (save for Real and Barcelona), as well as 17 clubs of Italian Series A (save for Inter, Milan and Juventus). This is more than the total spending of the Dutch and Portuguese championships altogether.

British clubs give an example to follow to other football clubs in terms of finance. Top teams form over 30 percent of their budgets with the help of ticket sales, seasonal ticket sales and football merchandise. TV broadcast sales return from 20 to 50 percent of profit. The rest comes from sponsors, advertising and player sales.

The financial well-being of Russian football clubs entirely depends on sponsors, state-run companies and regional authorities. They provide as much as 80 percent of the budgets of the clubs. In Europe, sponsors bring the profit of only 20-30 percent.

Vitaly Salnik

Bigness

Read the original in Russian