Business

Platform business model and the business of football

There are different business models but we shall be looking at Platform business in this article and how it relates to the game of football.
Platform business model is a business model that some people are not familiar with, but yet, it is the model on which most businesses around us stand. Examples of businesses that make us of this model include Google, Facebook, YouTube, Airbnb, Uber, Jumia, Coinbase, Alibaba, etc.

Now, let’s look at how the football business works with the platform business model.
The majority of football leagues and tournaments World cup and nations cup all operate on the same business model called the platform business model.

What is a platform business model?

Platform business creates value by connecting multiple independent groups to each other, usually producers and consumers.
The major focus of any platform business is mainly on repeated interaction between producers and consumers. It does not matter whichever league is formed, in as much that there are sustainable interactions between the consumers (in this case the football lovers) and producers (football clubs), the league is bound to succeed.

The reason why some local leagues are not gaining as much traction as they suppose to is because of the poor interaction between producers and consumers take for example the Nigeria Professional League (NPL) which has enough producers but very few consumers.

Leagues should be seen as an enabler of interactions

You should know that the goal of any platform business is to enable interactions repeatedly and efficiently; Facebook and Youtube consistently ensure that their platforms are suitable for content creators and consumers, Google’s Playstore allows app developers to list their apps for interested users, Uber allows drivers signal their availability and consumers also to give them ratings based on their experiences.

There was a proposed league called Super League which was introduced around April 2021, organized by the European Super League Company, and it was created so it could rival UEFA Champions League.

Now, let’s look at how the Platform business model applies to this proposed league.

The priorities of platform businesses can be grouped under three categories, but only two applies to the Super League:

1. Pull

Both producers and consumers must be pulled into the platform. In the case of the Super League, a total of 12 clubs pulled in for the League; Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham, would join AC Milan, Atletico Madrid, Barcelona, Inter Milan, Juventus, and Real Madrid. The next thing would have been working on getting consumers in as well and I believe that heavy media coverage with strong promotion would have done the magic.

2. Facilitate

Once the audience had been drawn to the league, the platform owners would only need to facilitate interactions between them.

Beyond interactions, platform businesses also need to ensure consistent creation of value, why because it is easier to pull in consumers than to keep them. This is why public figures who consistently create what their audience regards as value do have a large number of followers.
Another thing is that it has nothing to do with being new in the game, the moment people start seeing you as a value creator, then they start paying attention to you.

In football, you can regard this value as competition and whoever is behind the Super League understands this also and which made came up with a competitive plan.
The information available Super League website reads: “The Super League is a new European competition between 20 top clubs comprised of 15 founders and five annual qualifiers. There will be two groups of 10 clubs each, playing home and away fixtures within the group each year.

“Following the group stage, eight clubs will qualify for a knockout tournament, playing home and away until the single-match Super League championship, in a dramatic four-week end to the season.

“Games will be played midweek, and all clubs will remain in their domestic leagues.”
Lastly, it’s all about money, sorry but emotions don’t pay the bills.
Quoting Sky Sports News reporter Kaveh Solhekol
“I keep saying it is about money, and if you look at the finances, a club like Man Utd playing in the Champions League, they make between £40m and £80m on a good year if they win it.

“If they play in this new competition, they get a cheque for £250m-£300m, to begin with, then in the future, they will get three times as much money a season as they get from the Champions League.

“You are looking at £200m-£250m in TV rights, they will be able to sell some of the rights to the games themselves on their own channels, the broadcast rights all over the world”.

Although the Super League tournament idea did not materialize, it’s just a matter of time before a similar idea comes up again in the nearest future and it will be because of the same reason as well.

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