MBA Programme

Institute Teknologi Bandung

The beautiful Game

The business soccer
Professional Soccer Club Management
Expenses and Revenue
Transforming The Real Madrid
Gaining Financial Breathing Space
Managing The Brand and Contest
Expanding Internationally
Questions

A soccer club reputation depended on its

great games and players and the
championships won.
Its strenght depended on its personnel and
financial position.
The core promises behind a soccer brand was
VICTORY and/or A GOOD SHOW.

In Europe, soccer club organized into leagues

that often negotiated on behalf of their
member clubs for marketing rights.
In Europe, the handful of soccer clubs that
could afford the star players aesily
dominated the sport on the playing field, in
the media, and in the marketplace.
But some observers worried that players
imports suppressed the development of local
talent.

In the 1990s, European professional soccer

had transitioned from the traditional
business model emphasizing gate receipts
and local coorporate sponsorships to a
strategy of maximizing merchandising and
television revenue , and in some cases stock
values.

Professional soccer clubs had to cover fixed

cost and finance talent acquisition and
retention.
Player have moved from being atheletes to
being brands.

For most top clubs, match day income

accounted for about a fourth of revenue,
with sponsorships and merchandising revenue
making up the balance.
Match day gate receipts continued to be an
important but declining source of revenue.

Merchandising included the sales of branded

goods such as soccer jerseys, mugs, caps,
and watches.
Sponsorship for major corporations could
account for up to 15% of a top clubs
revenue.
TV RIGHT, displaced gate receipts as the
single largest source of revenue for many
clubs.

The clubs mission was not clear and not

deemed important.
Perez set out to build a professsional
organisation.
Our vision, which Perez articulated very
clearly. The club is to be the best soccer club
in the world. Our mission is to nurture and
project the Real Madrid brand worldwide.

Real Madrid managers indentified four brands

value drivers :
1. Size of audience
2. Frequency with which the audiences engaged
with the brand.
3. Sociodemographic charateristics of audiences
4. Bridges, that could be build to link the brand
and the audience.

Marketing revenue was expected to rise from

39 million in 2000-2001 to 83 million in
2003-2004.
That is 33% from sponsorship and image
right, 61% from merchandising, and 5% from
new technologies and international
development.

Real Madrid want to control the content all

the way to selling and distributing it.
Real Madrid saw opportunities in spesialized
publishing, audiovisual right, video games,
interactive applications, merchandising, and
official products, the internet, the video,
and ticket, stadium development.
One-on-One relationship.

Fan could also keep connected and exposed

to the Real Madrid brands and product
throught the Real Madrid stores, fan card,
and magazines.

Asia
a. Sport merchandise
b. Soccer academies
c. Fan club
d. Restaurant and caf

US
A. Content development
B. Fan loyalty
C. Development in intangible asset
D. Asset development

What is the Real Madrid business model?

Is it unique?
Business model :
It is unique because it is straight to the
heart and enddless list of positive
values : prestige, effort, majesty, and
leadership.
1.

2. Who are Real Madrids customers? How is the

market segmented?
Medium-high