Transformation of football clubs into brands

Football is a simple game. There are 11 players on the pitch from each of the two sides, and the objective is to put the ball in the opposing team’s net. Clubs were just a group of players putting in an effort to win trophies and provide joy to their loyal base of supporters, who were mostly local folk who went to watch the games on weekends.

But at the turn of the 21st century, all that changed. Satellite TV and internet have carried the big European clubs to the corners of the earth and the fans are no longer limited to the local populace. They have turned into something more; they have become highly lucrative brands.

Imagine a family room in Shanghai, but it could just as well be in Los Angeles, USA or Sapporo, Japan. A dozen people are sitting around a TV watching Manchester United or Real Madrid play against some unheard-of team. None of them knows that Manchester is a city in England or that Madrid is the capital of Spain, countries they will never visit. All of them support Manchester United or Real Madrid, though they probably support other clubs as well. The Manchester United or Real Madrid brand means something different to these new fans than it did to local Mancunians or Madridistas in the 1980s.

MADRID, SPAIN – SEPTEMBER 02: Members of the public shop for Gareth Bale shirts on the day that he is officially unveiled a new Real Madrid player at the official store of Estadio Santiago Bernabeu on September 2, 2013 in Madrid, Spain. (Photo by Gonzalo Arroyo Moreno/Getty Images)

Although these “plastic fans”, as many have called them, lack the loyalty, they have played a very crucial part in the financial growth story of the major European clubs. Watching their favourite superstars play every weekend, the aspiration to be part of the glory resulted in a huge market of people who were willing to spend money to buy merchandise with the clubs’ brand on them. Realizing the potential, all the major clubs now conduct their pre-season preparations during world tours which are nothing but marketing gimmicks targeted towards raking in the moolah.

Every year, we have surveys conducted by various consulting companies which attempt to estimate the worth of these behemoths, and they come up with some staggering numbers. According to a 2012 study by Brandirectory, which ranks the world’s most valuable brands, some of the top football brands are worth close to a billion dollars. The top three, Manchester United ($853 million), Bayern Munich ($786 million) and Real Madrid ($600 million), are worth more than many of the brands we see around us every day.

All big clubs understand the power of their brand and are reaching beyond their traditional home markets to sell their brands to the markets like China, North America, Japan, and India. The prime question for them though is how to tie these international fans to their brands and create brand loyalty. Winning prizes is essential, because not many people support losers, but it is not the only thing, as clubs like Liverpool (9th at $367 million), who have not tasted much success recently, would attest. Factors like tradition, culture, history and the current fan base all add up to creating the appeal for the brand.

Revenues for England’s Premier League football (soccer) clubs hit a record high in 2010/2011, but the players are taking an even greater share of those riches. This graphic covers the financials for English football. It lists the top 20 clubs (international) by revenue, breaks down revenue by league and shows the total transfer spending.

Even though the word “brand” sounds intangible, it is the most enduring thing about a club. In the long term, arguably, a club is nothing but its brand. The players and managers change, the jersey changes, fans leave or lose interest or die, and sometimes even the stadium disappears, but what survives is the brand. Most of the strongest club brands today like Real Madrid, Manchester United, Barcelona or Bayern Munich were the strongest even thirty-forty years back.

The handful of clubs that manage to successfully monetize their brands in the global market will make fortunes for themselves. Considering the frightening potential for growth, one day Barcelona, Manchester United and Real Madrid may be not just giant brands, but may turn out to be giant corporations controlling the beautiful game.