REAL MADRID CLUB DE

FUTBOL
Corporate Performance
Management
Syndicate 7:
Elaeis Hafsah Jauhari 29120148
Yoshua Dimas Sillaban
Reynaldo Dimas Fachri 29120150
Aslam Shiddiqi Ariadji
Aji Atnanto
 David Beckham, the first Galacticos generation, was
introduced (2003).
Overview Beckham's impact was immediate, with 8000 jerseys sold
on the first day and a surge in popularity throughout Asia.
Real The best soccer club of the twentieth century

Madrid Florentino Perez, President of Madrid, has a worldwide

vision.
(2004) Perez's metamorphosis of the club, as well as the viability
of the financial model, were both celebrated in 2004.
 Soccer was the most popular sport in the world, with over 240 million people
playing at least once a week.

11 players, two 45-minute halves, and a 15-minute halfway break In a competition,

there is a 15-minute overtime period and a penalty shoot-out (not league).

1. THE Games, players, championships won, and financial condition all contribute to a
club's reputation.
BEAUTIFUL It's critical to strike a balance between the components brand (players) and the
master brand (clubs).
GAME The club had to balance the needs and desires of both grass-roots and lifestyle
followers.

Football's impact on tourism in Spain (twice from UK with Man. United)

The televised soccer market's potential. World Cup 2002 drew 28.8 billion viewers
from 213 nations, outnumbering both the Super Bowl and the Olympics.
 • Organization

2. THE
BUSINESS
SOCCER
UEFA
Every year, the UEFA
Champions League (for
In contrast to US Sports, give
European clubs) and the
EURO Cup (every four years)
are focused (For every
nations in Europe)
On the field, in the media,
and in the marketplace,
soccer brands that could
afford star players
dominated.
An open league system was
used in European soccer.
The financially powerful
members the freedom to
large club will survive, while
market themselves.
US Sport tries to stay
competitive.
Some observers are
concerned that European
The recognition of player
clubs have recruited players
branding is based on the
from other continents,
club's performances.
which has stifled the
development of local talent.
 Change from a traditional business model to a new one that maximizes
merchandising and television revenue.

2.2 Florentino Perez and Real Madrid were inspired by Manchester United's
PROFESSIONAL commercial strategy.

SOCCER CLUB Brand recognition among niche supporters, segmented by age, was part of the
commercial strategy, as was the development of sub-brands and items tailored to
MANAGEMENT each category. (i.e. a wide range of products for both children and adults)

Using own-channel advertising and marketing to its full potential (website)

Out of field, a subsidiary was formed to build a business plan.

 2.3 EXPENSES

Some regulations have been

Stadium construction and
maintenance, as well as
stadium leasing, are two
options.
Players have transferred and
the academy has grown.
Players' salaries are too
expensive (there is no pay
ceiling), causing problems for
some clubs and leagues.
set by European Courts, such
as free-agent status if a
player decides not to renew
his contract with his current
team.

Increased the number of

international players allowed
in each national league,
increasing the level of
competitiveness between
teams.
Late in 2002, 14 of Europe's
Players transition from
top soccer clubs agreed to a
athletes to brands as a result
wage cap for players and to
of media attention and high
keep staff turnover below
salaries.
70%.
2.4 REVENUES

Between 1996 and 2002, income for major European soccer leagues increased by 28%, with Spain
leading the way.

Matchday ticketing is a valuable source of revenue, but it is dwindling. VIP tickets are available to
maximize revenue and provide VIP treatment.

The selling of branded items was incorporated in merchandising, which was exploited by modern
management to expand geographically. 5% of the revenue is set aside for this purposes.

Piracy and counterfeits are a problem in merchandising.

Sponsorship, which accounts for up to 15% of revenue, allows clubs to have a deeper understanding
of their fans. Growing and developing revenue sources requires a large number of fans.

For many clubs, television rights are their primary source of revenue.
2.5 PUBLIC SHARE OFFERS

The shares of 33 soccer clubs from six nations were listed in 1999.

MU was the largest in 2002, with a revenue of 576 million euro.

The conflict between investors and owners.

Investors are concerned about the club's rising spending, while owners are more
concerned with the club's championship success.

Beckham's transfer to Real Madrid has two sides. If Beckham's departure posed a risk
to the company's stock price, MU was able to prevent him from leaving on a free
charge.
 Spain has around 620,000 soccer players and over 10,000 soccer teams (3 professional national
leagues with 20, 22, and 80 clubs each). Professional players accounted for almost 1,200 of them.

2.6 Barcelona and Real Madrid won a combined total of 2/3 national football title.

PROFESSIONAL Madrid's season budget is 293 million euros, whereas Barcelona's is 171 million euros. Personnel
costs account for 75% of total costs.

SOCCER IN Soccer contributed one billion euros to the Spanish government's coffers.

SPAIN Only Real Madrid and Barcelona were expected to pique investor's attention in Spain.

The majority of Spaniards are soccer aficionados. Men make up 80% of Spain's population, while
women make up only 28%.

TV rights are a matter of public interest, and selling them to a single broadcaster is prohibited.
 3. THE REAL MADRID STORY

In 1930, Ricardo Zamora

In 1902, a group of Spanish In 1905, the team had its
In 1920, the King of Spain In 1927, the team was joined the team for 150,000 In 1943, Bernabue’s
soccer fans officially first international game,
granted the title of Royal touring the United States, pesetas, then his fame unanimous appointment as
founded the Madrid against Galia Sport from
(“real”) to the club led by Santiago Bernabeu consolidated the team’s Madrid’s president
Football Club Paris
reputation

In 1944, Bernabue started In 1947, the Santiago In 1960, television coverage

In 1950, Bernabaeu built a
building Spain’s largest Bernabeu Stadium (capacity In 1955-1960, Real Madrid of the European Cup Final
powerful team in search of In 1966 Madrid won their
coliseum, in Charmatin, of 75,000) was rated by the win their first 5 European had made Real Madrid the
challenges beyond the sixth European Cup in 1966
financed with bonds sold to international press as the Cup competitions world’s best-kwon soccer
Spanish league
fans best in Europe team

In 2000, Perez defeated

In 1978, following the
In 1995, Lorenzo Sanz took Sanz for the club presidency
death of Bernabeu, the club
over as president, and the In 1998, Madrid won their and delivered on his
declined for nearly two
club gradually recovered on eighth European Cup campaign promise to woo
decades, on the field and
the field superstar player Luis Figo
financially
from FC Barcelona
3.1 THE SOCIOS It was owned by Real Madrid members.

Socios Abonados: Members with a card who had paid their dues had
the privilege to attend every game.

Non-Abonados Socios: Received discounted tickets and

merchandising, received the club magazine, and were able to attend
two games each year.

Season ticket holders, who occupied 58,000 seats, could attend

UEFA matches for 30% more than league games.

Nondues-members were a type of fan that bought entry tickets to

games whenever they were held.

Real Madrid supporters can be found in any location.

 4. TRANSOFRMING THE REAL
• When arrived in the mid of 2000s, Perez and the management
noticed that the operations and marketing approach of the club
didn’t match the reputation
• The mission was unclear & not deemed important’
• Perez build a professional organization, ACS Construction company
• Positioned the company as a content providers
• The vision and mission which are clearly delivered by Perez,
generated 4 brand values at the end:
Size of audience; frequency audience with the brand;
sociodemographic characteristic; bridges to linked between audience
& the brand
The rules of game change after 100 years
• The flow of revolutions Real Madrid:
• - Best players play for themselves
• - Real Madrid is a brand
• - The products (the players and the games) are the content
Three interrelated goals:
• - Give Real Madrid the financial flexibility to acquire talent and
• expand the brand reach
• - Assemble a team of top players
• - Leverage Real Madrid brand and content across various
• channel.
5. GAINING FINANCIAL BREATHING SPACE
Sponsorship
Sell Assets • Old training pitched
• Generate €500 million
Buy Back Boxes in stadium €16
million
Development • Fix up and double the
boxes
• In ground signage
space
Generate Income Netted €16 million per
year

Sociedad Mixta: stand-alone legal entity

• Merchandising
• Sponsorship
• Contracts
• Business of Distribution
• Online Business
 Perez's election campaign included FC Barcelona's Figo.

6. Finance secured a €60 million loan, while Perez secured a €78 million personal
loan.

ASSEMBLING Transfer one world-class player at least once a year.

THE Most superstars, such as Zidane, Beckham, Figo, Ronaldo, Raul, Roberto Carlos, and
goalie Iker Casillas, are media celebrities because they are good on the pitch.

GALACTICOS The annual compensation for all Galaticos is the same.

Being on a star-studded team had certain benefits, according to the players.

7. MANAGING THE BRAND AND CONTENT
Real Madrid owned channels:
Real Madrid creates main and premium
content, which creates demand and
generates cash.

"Attracting and maintaining star players" is a

strategic priority".

Specialized publication, audio visual rights,

video games and interactive apps,
merchandising and official product, the
internet, television, ticketing, and stadium
construction were all areas where Real
Madrid saw potential.
8. EXPANDING INTERNATIONALLY
Real Madrid in Asia
• By hosting the 2002 World Cup in
Japan and Korea, FIFA contributes to
the growth of soccer in Asia.
• By 2013, Real Madrid hopes to have a
10% share of the Chinese sports
merchandise market.
• At a practice session at Tokyo Dome
during the 2003 Asia Tour, Japanese
fans spent $210,000 on club attire.
Real Madrid in US
• Benefited from the club's improved global
brand equity
• Profit from the club's assets by investing in
the United States.
• Build a virtuous cycle in which economic
gains in the United States benefit the brand
and vice versa
• Deploy assets in such a way that the club
builds a foundation from the ground up
• Initiatives include content creation, fan
loyalty, intangible asset development, and
asset deployment.
9. REAL MADRID’S SECOND
CENTURY
• The most important concerns:
Issues concerning a crucial component of Real Madrid's
strategy: New market participants were fighting for talent,
they were wary of overexposure and excessive marketing. In
soccer, there was still a sense of unpredictability.