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Real Madrid Case Summary

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Real Madrid Club de Futbol
Overview
In 2003, Real Madrid has become one of the biggest club in the world, hosting several football superstars. Signing megastar David Beckham helped their already healthy financial state. A football club’s reputation depends on its great games and players and championships won. Its strength depends on its personnel and financial position.
When Florentino Perez arrived circa 2000, Real Madrid operations and marketing approach did not match its reputation in sports. The club mission was not clear and not deemed important. Perez restructured the club to become a professional organization. The new brand value drivers: size of audience, commitment with the audience, sociodemographic with the audience, local fan associations to link the brand with the audience.
In 2004, they were worried about the key anchor to their strategy, their talents were aging. On the other hand, competitors were at work, as an example Roman Abramovich purchased the deeply indebted Chelsea. The management also worried about overexposure and excessive commercialization.
Analysis
Real Madrid jumped two positions income-wise in 2003 with € 192,600,000. Real Madrid was among top 5 of most favorite clubs in Argentina, Mexico, Latin America, United States, Japan, and England, France, Germany, Italy, Spain, Europe. Real Madrid revenue and net profit were on the rise after Perez’s takeover as shown in exhibit during 2000-2004.
These data shows that Perez successfully transformed Real Madrid into one professional organization with mature and world class finance, behind Manchester United. Madrid will not have problem to attract talent with the financial prowess and reputation it had.
Real Madrid was building a host of superstars during that era, yet financially they are healthy, this is a very good indication that they are in a good cycle of signing the best player – winning the championship – gaining profits – signing the best player and so on.
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