Real Madrid Club de Fútbol
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 the club after three years. Our analysis shows that international fans are a largely untapped market for Real Madrid, creating an opportunity for further expanded cash flows. Increasing brand recognition internationally can up the quantity of these fans. Marketing to increase loyalty in this consumer segment could also lead to greater profits per international fan.
The other side of the Real Madrid coin is the amount of revenue attributable to each player. In the case of David Beckham, at signing, he had a net present value exceeding €16M for the club.
The Galácticos Strategy had to eventually come to an end, however. So much talent could not share the spotlight forever, and like most clubs, Real Madrid had to transition towards younger, cheaper talent.
Business Model
With a history dating back 100 years, Real Madrid is one of the world’s most successful football clubs. Not only has Real Madrid won the Spanish league championship on 29 occasions but it has also won the European Cup 9 times. In addition to being such a success on the field, Real Madrid has also been a success off the field in business. They have become a large corporation with yearly revenues of roughly €350 million . Real Madrid has achieved what most
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 the club after three years. Our analysis shows that international fans are a largely untapped market for Real Madrid, creating an opportunity for further expanded cash flows. Increasing brand recognition internationally can up the quantity of these fans. Marketing to increase loyalty in this consumer segment could also lead to greater profits per international fan.
The other side of the Real Madrid coin is the amount of revenue attributable to each player. In the case of David Beckham, at signing, he had a net present value exceeding €16M for the club.
The Galácticos Strategy had to eventually come to an end, however. So much talent could not share the spotlight forever, and like most clubs, Real Madrid had to transition towards younger, cheaper talent.
Business Model
With a history dating back 100 years, Real Madrid is one of the world’s most successful football clubs. Not only has Real Madrid won the Spanish league championship on 29 occasions but it has also won the European Cup 9 times. In addition to being such a success on the field, Real Madrid has also been a success off the field in business. They have become a large corporation with yearly revenues of roughly €350 million . Real Madrid has achieved what most