The four most historically expensive soccer players’ transfer fees have all come in the past two years. Paul Pogba was sold to Manchester United for £105 million, mirroring the amount FC Barcelona coughed up to send Ousmane Dembélé to its club. While both are talented young players, they have yet to fully prove their potential, and £105 million is a shockingly similar amount to a previous record set in 2010, when legendary player Cristiano Ronaldo was transferred to Real Madrid with a then-historical £94 million deal.

Even more mind-boggling are the more recent signings of Neymar to Paris Saint-Germain F.C. for £222 million and Phillipe Coutinho’s transfer to FC Barcelona for £163 million. More than double Ronaldo’s transfer fee, Neymar’s transfer fee has revolutionized the transfer market today as Ronaldo’s did in 2010.

With these gargantuan transfer fees, hyperinflation of soccer player transfers and signings has become the norm. The question then becomes, how can these soccer clubs afford these tremendous rates?

The short answer: cash from broadcasting rights.

There are many financial factors contributing to the increasing amount of income soccer clubs can spend on players. These include increased ticket prices, merchandising, ownership change, prize money, transfers and sponsorship. While most of these factors have limited room for growth, the dominant driving force behind the purchasing power lies in the sale of broadcasting rights over the past 25 years.

The astronomical change in broadcasting finance for the Premier League serves as a relevant example. According to Motez Bishara of CNN, Liverpool FC sold Welsh player Ian Rush for £3.2 million to Juventus 30 years ago, which had made him the most expensive English player in history at the time. Interestingly enough, the Premier League sold its annual broadcasting rights to the BBC and ITV for less than £3.2 million, according to the Guardian. These relatively miniscule figures made sense at the time, as media coverage of soccer back then was much different; there were a total of only 14 live league games broadcasted on television per season, 12 times less than the amount of games screened today.

From 1986 to 1988, the annual broadcasting rights agreement plateaued at £3.1 million. Today, Sky TV and BT Group have already come to terms with the Premier League for the upcoming three seasons, hammering out a deal that constitutes a combined fee of £1.7 billion per season, according to David Hellier of Bloomberg. The considerable surge in broadcasting rights cash is a testament to the heightened marketability of the league. In the Premier League, seasons now constitute 380 matches. With technological advancement, most matches are viewable on television or online, and exorbitant ad revenue means broadcasters can afford to dole out large amounts of cash to the Premier League. Given the increased global demand and coverage capabilities, the 168 games screened per season today will each cost more than £10 million.

Additionally, foreign countries are becoming increasingly involved in buying the rights to broadcast live games from the Premier League. In 2016, the Premier League agreed on a new deal for its television rights in China: a three-year contract worth approximately £560 million, per BBC. Compared to the levels of the late-1980s, broadcasting rights revenue to the Premier League has increased exponentially and helps explain the record-breaking transfer fees of the last few years.

The norm throughout soccer’s history has been that clubs spend around 30 percent of their revenue on transfers. Thus, transfer spending by clubs follows the amount of revenue that different clubs possess. As broadcasting rights are a significant source of income for clubs, spending will likely only increase across the board if these rights continue to surge.

Skeptics question what the outlook of soccer broadcasting rights revenue will look like past 2018. They wonder whether sponsorship can make a push in increasing revenue for soccer clubs, or whether or not it will plateau.

To answer these questions, it helps to consider how broadcasting rights are sold. To limit the likelihood of collusion amongst competitors, a first-price sealed-bid auction is used, forcing bidders to bid as high as possible to guarantee success. As a result, overbidding can take place. With a wider net of bidders entering into the picture for the 2019-2022 broadcasting rights agreement, it seems likely that the Premier League’s annual rights will exceed £2 billion per season. Consequently, clubs will receive more money and purchasing power in the transfer market.

In terms of sponsorships, large corporations pay clubs to sponsor their companies. Depending on the deal, clubs will place a company’s logo on the jerseys or give them appearances in advertisements and billboards. For example, Forbes reported that in 2014, Adidas agreed to a 10-year, £130 million per year deal with Manchester United, the second largest sponsorship agreement in the soccer world at the time. In the same year, Chevrolet and Manchester United came to a 7-year agreement worth £53 million per year.

However, while sponsorships are a significant source of revenue for clubs, these deals last for considerably longer periods of time. It is difficult for sponsorships to generate an immediate and exponential surge in club revenue as changes in broadcasting rights cash does. While it is important to note that sponsorship revenue has been a steady source of income, increasing over the years at a respectable rate, the crux of soccer teams’ increased spending power in the player transfer market will continue to largely depend on changes in broadcasting rights.

With the likely continuation of exponential growth in broadcasting rights cash, the soccer world may be looking at its first £400-million player transfer in the near future. The first £300-million player will likely be sold and purchased as early as the 2019-2022 timeframe, when the new broadcasting rights agreement will take effect. Elsewhere in the world of professional sports, NBA basketball shares the same trend as European soccer’s biggest leagues in terms of player cost. The NBA’s recent $24 billion TV deal, which expires in 2024-2025, has meant gargantuan contracts for even average basketball players. The tremendous inflow of broadcasting rights cash in the basketball points to similar success for soccer, which arguably has an even more impressive international reach and higher financial ceiling.

Whether he is driving friends and family on a boat on his favorite lake or sitting behind the desk of his Rochester, Michigan office, Andy Appleby is comfortable in a leadership role.

The Massachusetts native is the Chairman and Chief Executive Officer of General Sports and Entertainment, LLC, a sports marketing and management firm. Appleby has more than 25 years of experience in the sports management industry and was named one of Detroit’s “40 Under 40” by Crain’s Detroit Business in 2000. In 2002, Appleby was named the Ernst & Young Emerging Entrepreneur of the Year for Eastern Michigan. And later in 2002, his company was named as one of Metropolitan Detroit’s 101 “Best and Brightest Companies to Work For” and one of Greater Detroit’s “Future 50.” According to Appleby, the mission of General Sports is simple: to be the premier sports and entertainment firm in the world.

GSE offers executive placement services and management consulting to sports teams across the world. It serves as an advisor to clients in sports marketing, recruiting, hospitality programs, and team management strategies. Some of GSE’s expertise is delivered through in-staff training and development, negotiation of stadium leases, public relations, and development and execution of marketing and promotional strategies. It also provides advice for teams to generate revenue through ticket sales, in- stadium advertising, corporate sales and sponsorship, and publication sales. In addition, GSE brokers strategic matches between sports and entertainment properties and corporate partners. Some of GSE’s services in this area include the development and implementation of naming rights campaigns, the development of high-end sports marketing collateral, sales representation, and sponsorship negotiation services.

Appleby founded the company in 1998 after a 12-year tenure at Palace Sports and Entertainment. Over the years, he has designed and developed his company into four operational divisions, which include GSE Capital & Management, Team Acquisition & Management, Executive Placement and GSE Meetings & Events. In addition to business divisions, Appleby created two subsidiaries, the Sports Executive Leadership Conference and General Sports Alliances, a naming rights and sponsorship sales agency.

Under the GSE Capital & Management division, Appleby launched General Sports Venue in 2003. The company concentrates on sports venue solutions, specifically synthetic turf. GSV’s biggest affiliate in the past was AstroTurf, a brand of artificial turf with state-of-the-art products and services. GSV became marketing partners with Textile Management and Associates (TMA) for the AstroTurf brand in 2006 for the American market.

Perhaps General Sports’ greatest success thus far has come through its Acquisition & Management division in January 2008, when it acquired the Derby County Football Club of the English Premier League for $100 million.

“Derby was a huge acquisition for us,” said Appleby. “The process required great effort and a world wide consortium. General Sports put together an investment group to raise money and assemble a new structure for the Derby team.”

Derby County, once a team in the elite Premier League, dropped to football’s second tier league (The Football Championship) after years of losing. Appleby hopes to revamp the club and get it back to the top tier. After the acquisition, Appleby became chairman of the club. Previously, General Sports completed the acquisition of the Fort Wayne Wizards minor league baseball team, an affiliate of the San Diego Padres, in May 1999. General Sports owned the team for seven years before selling it.

Appleby believes the operations team management aspect of General Sports makes it different from competing firms.

“Team management as an operational division is something that is not found often in sports and entertainment firms,” he said. “That is definitely an advantage for General Sports.”

Now that Appleby’s organization has gone global, he admits General Sports faces some challenges, especially in today’s
market.

“It’s a difficult business that is highly competitive,” Appleby said. “Everyone wants to be different. Now that we’ve expanded to places like England and Saudi Arabia, we have to deal with the difference of time zones. There are always adjustments that need to be made.”

But Appleby is able to keep his team highly motivated.

“At General Sports, every project we do is big,” he said. “Our employees use the incentive of feeling successful as a driving force to work hard.”

Appleby takes the marketing tactics and strategies of GSE very seriously.

“From a marketing standpoint, General Sports likes to be ahead of the curve,” said Appleby.

Appleby was definitely thinking ahead of the curve in 2001 when he founded the Sports Executive Leadership Conference. Each summer, at the beautiful Broadmoor gold and spa resort in Colorado Springs, Appleby and General Sports host the premier annual networking and leadership conference in the global sports industry. By bringing together senior leaders from companies worldwide, Appleby is able to promote his firm as well. Appleby has estimated that in the past ten years, the conference has cost a total of $3 million.

“General Sports created this wonderful conference, which is designed for higher level members of sports management firms in an effort to create a platform and environment to promote long-lasting relationships,” he said.

Appleby’s work with General Sports has not solely been for-profit. After creating the General Sports Foundation, the company launched a banner program called the Suite Dream Project. The aim of the project is to provide healing environments and joy to the homes and hospitals of children who have serious medical conditions. It has been up and running since 2001.

Appleby’s success in sports dates back to his days as a high school athlete. The 1981 New England Wrestling Champion won three state championships in the sport. In addition to achieving All-American honors in wrestling, Appleby was also was an All- State cross-country runner and home course record holder. Appleby’s interest for sports continued as he attended Springfield College, where he earned his Masters Degree in Sports Management and a Bachelor’s Degree in English.

Appleby began making his impact on the sports entertainment world right after college in 1986 when he joined Palace Sports and Entertainment. After several years of work, Appleby became the youngest Senior Vice President in the history of the organization and helped lead the company to the top of the industry. To prove how Appleby’s presence is eminent wherever he goes, during his time with Palace Sports and Entertainment, the Palace of Auburn Hills was named national “Arena of the Year” eight times in ten years.

When he is not working, Appleby likes to spend time with his wife and four children. He especially likes getting away on weekends in the summer to the family’s lake house. His wife, Kristiana, is the Executive Director of the Suite Dreams Project. Appleby’s current goal at General Sports is to continue polishing his organization and to acquire more teams.

“It’s kind of like the Confucius quote–‘Choose a job you love, and you will never have to work a day in your life.’” he says of his passion for sports. “That is what keeps me going– what makes me want to put my all into General Sports.”