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Real Madrid Club de Futbol (The Business of Soccer (Organization (The…
Real Madrid Club de Futbol
The Business of Soccer
Organization
The Federation Internationale de Football Association (FIFA), founded in Paris in 1904, established a unified set of rules regulating its 204-member national organizations.
The Union of European Football Association (UEFA) served as the governing body for Europe's 52 national associations
European professional soccer focused on the UEFA's seasonal competitions, most importantly the European Champion League
Professional Soccer Club Management
In the 1990s, European professional soccer had transitioned from the traditional model to a strategy of maximizing merchandising and television revenues, and in some cases stock values, on an international basis
Right combination of attributes: age, playing position, nationality, career history, personality and reputation, and playing style
Public Share Offers
In 1999, shares of 33 soccer clubs in six countries were listed on stock exchanges
By 2004, 24 British clubs were trading shares in England and Scotland and the largest, MU reached a market capitalization of over 576 million Euro
Professional Soccer in Spain
Spain had over 10.000 soccer clubs with nearly 620.000 players, about 1.200 of them were professionals
In 2003, over half of Spaniards considered themselves soccer fans
TV rights for Spain's professional soccer league were considered to be a matter of public interest
Expenses
Professional soccer clubs had to cover fixed costs and finance talent acquisition and retention
Revenues
For most top clubs, match-day income accounted for about a fourth of revenues, with sponsorship and merchandising revenues making up the balance
TV rights displaced gate receipts as the single largest source of revenue for many clubs in the 1990s
Transforming the Real
In the mid-2000, Perez and his new management team felt that the club's operation and marketing approach did not match its reputation in sports
Three interrelated goals: 1) give Real Madrid the financial flexibility to acquire talent and expand its brand reach; 2) assemble a team of top players; and 3) leverage the Real Madrid brand and content across a variety of channels
According to Perez, the vision of the club is to be the best soccer club in the world. And the mission is to nurture and project the Real Madrid brand worldwide
The Real Madrid Story
In 1902, a group of Spanish soccer fans officially founded the Madrid Foot Ball Club
A major turning point in the club's history came with Bernabeu's 1943 unanimous appointment as its president
Willing to pay whatever was necessary for the best players, Bernabeu had by the early 1950s built a powerful team in search of challenges beyond the Spanish league
After Bernabeu died in 1978, the club declined for nearly two decade, on the field and financially
Assembling the Galacticos
The 2000 transfer of Figo from rival club FC Barcelona was part of Perez's electoral campaign
The galaxy of International and Spanish talents (Los Galacticos) at Real madrid were known, included Zidane, Beckham, Figo, Brazilian striker Ronaldo, team Captain SPanish forward Raul, and Brazilian defender Roberto Carlos as well as goalkeeper Iker Casillas
Players saw advantages to being a star-studded team
Managing the Brand and Content
Real Madrid as generators of primary and premium content that offered the possibility of recurrent revenues across time, channels, and geographies
Real Madrid saw opportunities in specialized publishing, audiovisual rights, video games and interactive applications, merchandising and official products, the internet, video and ticket and stadium development
Real Madrid managers wanted the club to have a "one-on-one relationship" with each fan via mobile telephone, TV, wireless internet, and so on
Fans could also keep connected and exposed to the Real Madrid brand and products through the Real Madrid stores, fan card, and magazine
Gaining Financial Breathing Space
Right after his election, Perez worked to obtain approval for the rezoning of the club's old training pitches north of Madrid's financial district
The second major initiative was recapturing exploitation rights sold off to various operators and licenses
A third way to bolster club finances was to set up a stand-alone legal entity to own and manage
In the licensing and sponsoring area, Real Madrid pursued opportunities for all types of products
Marketing revenue was expected to rise from 39 million Euro in 2000-2001 to 83 million Euro in 2003-2004
Expanding Internationally
Real Madrid managers saw great promise for soccer and their club in Asia, where soccer's appeal was growing fast and tours, especially by U.K. clubs, were becoming common
Real Madrid's marketing department believed the U.S. market could be worth as much as 45% of global sports merchandise returns
Real Madrid's Second Century
Real Madrid was making from a local brand with worldwide "awarenss" to real global brand with marketing capabilities
Real Madrid managers were wary of overexposure and excessive commercialization
All the planning and strategy could not lessen the fact that an element of uncertainty remained in soccer
The Beautiful Game
Soccer was the world's most popular sport, over 240 million people played at least once a week
The game, fielding 10 players at a time,and a goalie, had two 45-minute halves of constant action, split by a 15 minutes halftime
A soccer club's reputation depended on its great games and players and the championship won, its strength dependen on its personnel and financial position
Cities often lent their name and flair to local soccer teams
In Europe, the big-five soccer countries were England, France, Germany, Italy, and Spain. In America, the three majors were Argentina, Brazil, and Mexico followed by United States
Prilla Lidyana / 29116001 / YP55