Real Madrid football club

Résumé du document

The case mainly talks about the Real Madrid, a Spanish football club, and its economic success story. First, the case starts by showing how important the football is in Spain with a Real Madrid manager quotation:”In Spain it is easier to change spouses, political party or religion than it is to change soccer club. In soccer, a fan is a fan for life. The fan's relationship to Real Madrid is one of passion.” Then, how important is the Real Madrid in Spain with a Spanish journalist quotation who described Beckham's €35 million transfer to Real Madrid from rival club U.K. Manchester United as “one of the most important things to have happened in Spain in a decade”.

Indeed, after his election in 2000, the brand new president Florentino Perez, a Spanish Businessman, promised a lot of change among the club by turning around the club's finances, bringing in world-class talent, and extending the club's brand around the world through multiple channels. In 2003, the club was the fourth-wealthiest in the world in terms of income with 192.6 millions € a year, when Manchester United was the wealthiest club with 251.4 millions €.

A few years before Perez's arrival in the club, European professional soccer had transitioned from the traditional business model emphasizing gate receipts and local corporate sponsorships to a strategy of maximizing merchandising and television revenue. Perez considered Manchester United as a sort of model, selling to its fans products such as watches, sleepwear or crayons. The English club even developed a business in Asia with shops, restaurants and coffeehouse. But at that time, according a survey, Real Madrid was the most popular club in the world, with around 90 million fans worldwide.

Extraits

[...] In July 2003, Roman Abramovitch a Russian multi-billionaire bought an English football club: Chelsea. Then he invested a lot of money in this club, and spent $ 169 million for new players. Manchester United received different offers from Russian, Western European and Middle Eastern billionaires, but refused them because the club is not to sell. Nonetheless, Chelsea had lured the former Manchester United chief executive, by offering him a better salary. There are hundreds of billionaires, who do not know what to do with their money in the world, if one of them bought Chelsea, why would not it happen with another club? [...]

[...] Real Madrid football club Summary of the case Real Madrid: a success story. The case mainly talks about the Real Madrid, a Spanish football club, and its economic success story. First, the case starts by showing how important the football is in Spain with a Real Madrid manager quotation:”In Spain it is easier to change spouses, political party or religion than it is to change soccer club. In soccer, a fan is a fan for life. The fan's relationship to Real Madrid is one of passion.” Then, how important is the Real Madrid in Spain with a Spanish journalist quotation who described Beckham's million transfer to Real Madrid from rival club U.K. [...]

[...] Therefore they signed a four years contract with telefonica, the Spain's major telecom provider, to deliver Real Madrid content in fifteen different countries. Moreover, the fans could buy in Real Madrid stores a fan card, for 19 (38 if abroad). The holders received four free official magazines a year, tickets preferences, discounts in various stores and so on card have been sold in 2001. “This allows Real Madrid to have members all over the world and gives the members a feeling of exclusivity,” the president's office noted. [...]

[...] To each problem: a solution. As we saw above, there are four different issues the club is facing. I will first try to determine the need for each of these issues. Then, answer the question: how would it be possible to meet this need? Finally, I will try to find a global solution, using information contained in the case, and my own analysis. The first problem announced in the case concerns the capacity the club will have to recruit the most talented players. [...]

[...] There are four different issues exposed, I will talk about them: Will the Real Madrid will be able to recruit enough talented players? Indeed, Real Madrid players aged 26 and a half on average. As stated a board manager half a dozen superstars do not emerge every year: “Perhaps a dozen players appear per decade at the level we aspire to have on our team. We want people with amazing skill and people that can be converted into unique players. One challenge is the standardization of soccer. [...]