Abstract
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.
