Abstract
Real Madrid Club de Fútbol has a storied past. In the past decade, they were able to overcome extensive financial difficulties and assemble a first team containing seven of the top players in the world. These players were called the “Galácticos.”
The Galácticos were the core of a complete business reformation pioneered by the President of the club, Florentino Peréz, a Spanish business mogul. Under his guidance, brand recognition expanded greatly, and cash flows increased drastically, creating great profits for the firm.
The consumer market for Real Madrid Club de Fútbol can be divided into four main segments, the two extremes being heavily loyal member-owners known as Socios and international fans who mostly wane away from
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Real Madrid’s business model has shifted a lot throughout the years. Their main sources of revenue are gate receipts, sponsorships, merchandising, and television rights. One last source of revenue that should not be left out is the offering of public shares of the soccer club. Real Madrid itself is not public, but there are numerous of other top clubs that have attracted investors and are now listed on the stock exchanges.
Consumer Segmentation
Domestic Socios Abonados
These are cardholding members who pay their dues. They pay an average of 370 euro per year for season tickets. Their loyalty even encourages them to pay a 30% premium to attend UEFA and King’s Cup games.
Because of their commitments to Real Madrid, to increase their utility, they want to attend as many games played by Real Madrid as possible. Their demands on both the admission tickets and other merchandise are inelastic. To maximize their utility, Real Madrid needs to deliver information related to the team as much as possible.
Domestic socios abonados contribute a lot to three out of four revenue streams, tickets receipt on match day, marketing, and broadcast and pay-TV. Because they are huge fans of Real Madrid, they will try to attend more games. The ticket revenue from them takes up a large proportion of the total match-day revenue. Additionally, they are willing to pay a higher price to purchase the merchandise, even though they are given a
The Cleveland Indians fans have earned the reputation of being extremely dedicated and loyal to their team. According to Rosko (2016), Cleveland Indians’ fan base was ranked in the top 250 in the world. It is no secret that the baseball team has a devoted following, but it does beg the question who are these fans? The followers of the Cleveland Indians’ brand will be segmented into groups based on their demographics and geo-demographics. For the Cleveland Indians, this will entail categorizing consumers into groups based on age, gender, family size, and region.
(iv) The company can form tie-ups with the popular European football clubs like Manchester United, Barcelona,
Professional sports has become one of the most popular industries in the world today. The media spends billions of dollars on advertisements and teams spend millions of dollars on professional athletes all for one reason, the fans. The fans ticket sales and merchandise purchases are what keeps all the sport teams around and prevents professional athletes from losing their jobs. There are three types of fans in the sports world, average fans, fanatics, and fair-weather fans.
Futbol Club Barcelona known as Barcelona and referred by fans as "Barça", is a professional Soccer club, based in Barcelona, Catalonia, Spain founded in 1899 by a group of Swiss, English and Catalan footballers. It is the second most valuable sports team on the globe just after Real Madrid FC. It also has largest fan base among all sports teams on all major social networks. Barca is worth $3.2 billion, and the world's second-richest football club in terms of revenue, with an annual turnover of $613 million.( "The World's 50 Most Valuable Sports Teams 2014". Forbes.com ; "Deloitte Football Money League 2013". Deloitte UK. Retrieved 30 January 2013).
Tottenham is part of a stable industry where the demand is inelastic due to enormous fan following
With the number of clubs which have participated in the UEFA competition over the past 12 years, a sample size of 6 teams will be selected for this dissertation. These clubs who must abide by Financial Fair Play regulations to participate in their competitions are Arsenal, Manchester United, Chelsea, Manchester City, Liverpool and Tottenham. It is also important to note that all clubs selected in this analysis has expense greater than €45 million, as UEFA’s break-even rule is subject to an exception of an acceptable deviation up to €45 million if the shortfall is covered by equity investment. As the Financial Fair Play has been in existence since 2010, financial statements and balance sheets for the selected clubs and the league have been
Although, the case study of Manchester United gives us a good example of a brand’s ability to globalize, it does not give us a clear picture into how a league as a whole accomplishes these same goals. To get this clear picture of a successful global soccer league we can review a case study by Matthew Holt that examines the UEFA Champions League and its ability to succeed. The UEFA Champions League(UCL) was established after the UEFA European cup started to see more revenue increases based on the increase in television and digital technologies. (Holt, 2007) The goal of the UCL was to increase revenue through a newly structured European club soccer league. The first way that UCL accomplished this was through centralized marketing. This was accomplished through selling the television rights as the UCL brand rather than allowing the clubs to individually sell the rights to the games. This increased the value of the television rights and in turn increased the profitability of the clubs. (Holt, 2007) UEFA sold this UCL brand
It is necessary to clarify at this point that from the first third of the 20th century, they became an embodiment of the cities or regions where they arose, establishing an intense emotional symbiosis that has been maintained over time. In other words, Spanish football clubs are prolongations of their local and regional cultures. Therefore, anyone can identify with them without even being interested in football. However, solely commitment to the sport does not necessarily mean that we can define the sport as a religion. Rather we must consider the different aspects of the proposed construct in relation to the aspects that define religion. Albanese states that like traditional religious rituals, sports too divide the time of their performance from the ordinary and that in both people take assigned roles, wearing symbolic clothing to distinguish the ‘ins’ from the ‘outs’
This article continues to explain that once a sports marketer creates a product and advertises it on a small scale, “Sports marketers get ahead by gradually representing bigger, more important and more prestigious sports teams, companies, associations, and athletes.” In other words, sports marketers need to have a plan of action to promote their product on a larger scale over time. Also, sports marketers spend much of their planning on the aspect of promotion. Mihai verifies that the category of promotion serves to prove that the product is desirable through advertising, sales, sponsorship and public relations. If a sports marketer follows these planning steps, his/her work will lead to a successful product with a large margin of profit.
Besides all these, the stadium rents were set to understate the profits of the club and to move some profits to the stadium corporation. The rest of their accounting is very straightforward. Most of
In this assignment I will be exploring the ways in which Internal and external factors have an impact on the core revenues of Clubs and how clubs themselves can potentially help put the factors in their favour. Topics such as Fans and their behaviour and Player conduct on and off the pitch will be explored. Things that can occur which clubs have little or no power over – such as a major political shift – which can affect a clubs income will also be covered.
As there are many important variables in this decision process that are not under the direct control of the sports marketer such as the players performance or lack of competition in match, it is vital to ensure that fans enjoy a positive experience. It is necessary in an increasingly competitive and cluttered sporting landscape to strategically manage the variables that are under the control of sports marketers. It is essential to the sports marketer to understand which dimensions spectators perceive as important (Michael D. Clemes, 2011).
It has also supported the national soccer teams of Brazil, Portugal, the US, Netherlands, and professional European soccer teams, Manchester United, Juventus, FC Barcelona, Inter Milan, Porto, Shakhtar, Club America, Aston Villa, Dundee United, Celtic, Arsenal, Steaua, and
Futbol Club Barcelona known as Barcelona and referred by fans as "Barça", is a professional Soccer club, based in Barcelona, Catalonia, Spain founded in 1899 by a group of Swiss, English and Catalan footballers. It is the second most valuable sports team on the globe just after Real Madrid FC. It also has largest fan base among all sports teams on all major social networks. Barca is worth $3.2 billion, and the world's second-richest football club in terms of revenue, with an annual turnover of $613 million.( Forbes, "The World's 50 Most Valuable Sports Teams 2014". Forbes.com ; Deloitte UK, "Deloitte Football Money League 2013"(2013) ).
It has been suggested that the UCL is a product of societal evolution. After forty years without change the European Cup had become commercially obsolete to broadcasters and sponsors due to the lack of guaranteed matches involving Europe’s biggest clubs (Ahlstrom, 2002). The knockout format allowed for clubs who would bring in large sums of revenue to be eliminated after merely two games.