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NA0369

The Branding of Club Atltico de Madrid: Local or Globa

Jeffrey W. Overby, Belmont University

t was the end of the 2007/2008 football season1 and Club Atltico
de Madrid appeared to have turned a corner in terms of
performance on the field. fte Club had recently completed its best
season in ten years, finishing fourth in Spains top professional league.2
However, the Clubs revenue growth did not match expectations. Just one
year earlier, CEO Miguel Angel Gil Marin had stated the following goal:
our brand will help us to double revenues in two years.3 Although he
had added that the Atltico Madrid brand was a valuable asset very
familiar among Spaniards, he had also admitted that the Club would
need to adapt to the increasing globalization of
football.4
Atltico Madrid was often overshadowed on the international stage by
cross-town rival, Real Madrid, and other European clubs.5 Moreover, its
revenues paled in com- parison to many of the more globally
recognized football clubs and it had not had an operating profit since
before 2000.6 fte Club was committed to increasing revenue through
a renewed focus on marketing and brand building intended to increase
aware- ness and attractiveness of the Atltico Madrid brand.7 But how
could the Club achieve this? Should and could it try to make Atltico
Madrid a household name around the world?

History

a nd

development of Club atltiCo de madrid

fte history of Club Atltico de Madrid was a tale of phenomenal highs


and devastat- ing lows. When founded in 1903, the players did not wear
their now-famous red and white jerseys, but instead wore white and
blue jerseys. By 1911, the Club began wear- ing red and white vertical
striped jerseys with blue shorts, still its uniform in 2008. One theory for
this change was that the material for the jerseys was cheaper by purchasing leftover material from mattress covers that shared the same
colors. As a result, the Club earned the name los colchoneros,
meaning mattress-makers, and began to take on a working-class image.8

Copyright 2015 by the Case Research Journal and by Jeffrey W. Overby.

The Branding of Club Atltico de Madrid:


Local or Global?
This document is authorized for use only by Utomo Sarjono Putro in 2016.

Atltico Madrid won several regional championships in the early 1900s,


and finally won La Liga (the more widely known name for the Primera
Division, the top profes- sional football league in Spain) during the
1939/1940 and 1940/1941 seasons.9 After several more years of
success, the Club experienced a decline during the 1950s but
recovered during the 1960s, winning the Copa del Rey four times
and winning the European Cup (the name of the Union of European
Football Associations [UEFA] Champions League prior to 1992)
once.10 See Appendix 1 for the structure of Span- ish football
leagues and Appendix 2 for a comparison between European football
and typical American professional sports.
In 1966, Atltico Madrid moved into a new stadium, the Vicente
Calderon Stadium.11 fte stadium was a five-star, multi-purpose (also
hosting concerts) arena with seating capacity of 55,000. By 2008, the
stadium hosted a restaurant, museum, press room, state-of-the-art
locker room facilities for players, and team store. However, it was starting to show its age as compared to many new stadiums.12 In 2007,
Atltico Madrid signed an agreement with the beer brewer, Mahou, and
the municipality of Madrid to allow Atltico to move into the to-berenovated La Peineta Stadium within three years.13 fte 200 million
renovation of the La Peineta Stadium would result in seating for over
67,000 spectators and would be paid for by the sale of land around the
exist- ing stadium to Mahou for redevelopment.
Despite other championships in the 1970s, Atltico Madrids success
coincided with the unprecedented domination by cross-city rival Real
Madrid from 1961 to 1980. During that period, Real Madrid ruled La
Liga, winning the competition four- teen times.14 ftis disparity sent the
two clubs down diverging paths. In 1987, Jess Gil became the
president of Atltico Madrid. Gil spent a lot of the Clubs money by
bringing in players with high salaries and developed a reputation for
being ruthless.15 He fired numerous managers during his reign until the
team won La Liga during the 1995/1996 season.16 However, the Club
was soon to receive a staggering blow after placing as one of the
bottom three teams in the Primera Division in the 1999/2000
season.17 Under relegation, the bottom three clubs moved from the
top tier to the second-tier Segunda Division during the next season.
Notwithstanding relegation, Atltico Madrids supporters never
wavered in their loyalty and devotion, and, in fact, the Club beat season
ticket records during the sec- ond division years.18 fte Club returned
to the Primera Division in 2002, just in time to celebrate its 100
anniversary.19 In 2003, Jess Gil resigned and Enrique Cerezo
became the new Club president.20 In June 2007, one of Atltico
Madrids best play- ers, Fernando Torres, left the Club to play for
Liverpool for 20 million.21 Despite the initial shock of this loss, the
Club signed several new players.22 fte result was one of the best
seasons in years. Not only did Atltico Madrid finish fourth in La Liga in
2007/2008, but it also qualified for the UEFA Champions League.23
fte Club was shareholder owned with Miguel ngel Gil Marn, son of
Jess Gil, holding the major- ity of shares, along with sizable shares held
by Miguels brothers and Enrique Cerezo, and many minor shareholders.24

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During the 2000s, Atltico Madrid came to be known in Spain as


much for its creative advertising as for its play on the field.25 For
example, shortly after relegation to the Segunda Divisin, management
had launched an aggressive marketing campaign involving numerous
famous sports figures, singers, and artists with a strong identifi- cation
with the Club. fte campaign, entitled Un aito en el Infierno (A
year in Hell), played on the emotions experienced by fans and ran on
billboards strategically

Case Researcft Journal Volume 35 Issue 3 Summer 2015

This document is authorized for use only by Utomo Sarjono Putro in 2016.

located on the main Madrid beltways rather than television in order to


save money.26 fte campaign won several national and international
advertising awards. As a result, season ticket holders increased from
27,000 to 45,000.27 In another campaign, this time meant for
television, a young child asked his father, Daddy, why do we support el
Atleti? Atleti was an informal affectionate term used by fans of the
Club. fte father responded, Some things just cant be explained. But its
something very, very big.28
Aside from advertising, Atltico Madrid implemented other marketing
activities, including introducing an official museum in the stadium in
2006 and participating in friendly matches around the world. 29 Such moves
were important first steps to improv- ing operations at Atltico Madrid and
marketing the Club and brand outside of Spain. Unlike the globally
known brands of clubs such as Real Madrid and Manchester United,
the Atltico Madrid brand was still recognized mainly in Spain and
Europe and little-known in much of the rest of the world.30
In spite of its recent success on the field, Atltico Madrid struggled to
turn a profit (see Exhibits 14).31 As evident in Exhibit 2, the only
reason for the net profit in recent years was income from player
transfers (i.e., extraordinary items). In terms of its balance sheet,
Atltico Madrid had seen its total assets and liabilities rise every year
since the 1999/2000 season. However, the capital structure of the Club
had been largely dependent on debt.32 At the end of the 2007/2008
season, the capital side of the balance sheet consisted of 96 percent
debt 1:
(see
Exhibit
3). de Madrid Financial Overview
Exhibit
Club
Atltico
Figures are in Euro millions.

Year

Revenue

Operating Profit

Net Profit

2007/2008

74.5

46.5

0.2

2006/2007

60.8

33.6

0.5

2005/2006

51.0

34.5

3.4

2004/2005

46.8

41.0

40.5

2003/2004

35.6

49.4

36.6

2002/2003

32.6

57.1

26.2

2001/2002

15.5

58.2

10.1

2000/2001

13.1

50.0

1.1

Source: Adapted from Club Atltico de Madrid. (2009). Retrieved from


1999/2000
41.7
40.2
com/atm/atletico-de-madrid.

1.9

The Branding of Club Atltico de Madrid: Local or Global?


3

2007/2008

2006/2007

2005/2006

5,457,111

3,888,476

3,374,635

Broadcasting Revenue

28,453,245

23,381,477

18,251,608

Commercial Revenue

22,088,626

18,613,351

15,986,489

Socios Revenue

18,541,542

14,899,701

13,346,253

Total Income

74,540,524

60,783,005

50,958,985

5,315,037

4,658,001

3,233,295

Personnel

65,893,428

52,254,071

48,398,504

Other Operating Expenses

14,463,831

15,159,944

12,500,261

Amortization

35,382,584

22,334,241

21,310,412

Total Expenses

121,054,880

94,406,257

85,442,472

OPERATING PROFIT

(46,514,356)

(33,623,252)

(34,483,487)

Extraordinary Income

66,903,383

43,708,223

49,744,241

Extraordinary Expenses

(6,536,274)

(725,864)

(4,027,706)

PROFIT BEFORE INTEREST & TAXES

13,852,753

9,359,107

11,233,048

704,600

53,705

26,123

(12,302,417)

(6,919,714)

(5,943,193)

PROFIT BEFORE TAXES

2,254,936

2,493,098

5,315,978

TAXES

1,971,740

1,968,648

1,893,399

283,196

524,450

3,422,579

INCOME
Match Day Revenue

EXPENSES
Supplies

EXTRAORDINARY ITEMS

Interest Income
Interest Expense

NET PROFIT

Exhibit 2: Club Atltico de Madrid Profit and Loss Statements ()*

Case Researcft Journal Volume 35 Issue 3 Summer 2015

Source: Adapted from Club Atltico de Madrid. (2009). Retrieved from


atm/atletico-de-madrid.

*See Appendix 3 for explanations of the financial statement terminology.

2007/2008

2006/2007

2005/2006

97,608,042

91,066,472

60,758,807

1,167,183

6,312,514

6,128,670

Other Fixed Assets

354,751,525

307,817,890

350,638,898

FIXED ASSETS

453,526,750

405,196,876

417,526,375

497,258

445,395

406,074

Accounts Receivable

64,497,351

72,156,218

50,378,706

Other Liquid Assets

15,891,386

28,398,832

19,843,165

CURRENT ASSETS

80,885,995

101,000,445

70,627,945

3,181,756

16,768,786

9,088,931

537,594,501

522,966,107

497,243,251

15,536,638

24,706,670

24,549,836

7,785,231

3,309,258

(1,781,051)

23,321,869

28,015,928

22,768,785

200,883,932

159,880,787

241,033,013

81,230,575

57,598,929

45,107,035

282,114,507

217,479,716

286,140,048

RESERVES

52,213,366

57,598,929

45,107,035

Short-Term Creditors

44,495,735

46,430,290

31,007,896

105,157,248

75,913,119

51,279,791

Other Short-Term Debt

79,323,385

138,358,268

96,957,323

SHORT-TERM DEBT

228,976,368

260,701,677

179,245,010

TOTAL LIABILITIES & EQUITY

586,626,110

563,796,250

533,260,878

Intangible Assets
Tangible Assets

Inventory

CASH
TOTAL ASSETS
Issued Share Capital
Other Shareholder Equity
SHAREHOLDERS EQUITY
Long-Term Creditors
Other Long-Term Debt
LONG-TERM DEBT

Accounts Payable

Exhibit 3: Club Atltico de Madrid Balance Sheets ()*

The Branding of Club Atltico de Madrid: Local or Global?


5

Source: Adapted from Club Atltico de Madrid. (2009). Retrieved from


atm/atletico-de-madrid.

*See Appendix 3 for explanations of the financial statement terminology.

Exhibit 4: La Liga Club Balance Sheets, 2006/2007 ( millions)


CLUB

FIXED
ASSETS

CURRENT TOTAL
ASSETS ASSETS

NET
EQUITY

LONGTERM DEBT

SHORTTERM DEBT

TOTAL
LIABILITIES

Real Madrid

477.3

190.0

668.2

141.1

246.6

280.5

658.2

F.C. Barcelona

297.2

100.1

397.3

8.5

200.9

187.9

397.3

60.1

42.2

102.3

27.7

14.1

60.5

102.3

Valencia C.F.

145.1

119.7

264.8

21.4

161.8

124.4

254.8

Villareal C.F.

88.9

54.0

142.9

0.9

96.6

45.4

142.9

Real Zaragoza

25.2

36.3

61.6

21.8

43.5

39.9

142.9

Atltico Madrid

405.2

101.0

523.0

28.0

217.5

260.7

563.8

Real Recreativo

13.8

3.8

17.6

5.1

5.1

1.5

17.6

Getafe C.F.

18.7

9.9

28.6

4.2

4.2

3.5

28.6

Real Racing

96.1

20.7

116.8

10.7

107.3

20.2

116.8

R.C.D. Espanyol

76.8

50.9

127.7

25.5

50.1

52.1

127.7

R.C.D. Mallorca

36.1

28.9

65.0

1.7

15.4

47.9

65.0

120.8

120.7

241.5

15.3

190.4

35.8

241.5

C.A. Osasuna

33.9

31.7

65.6

16.8

16.7

32.1

65.6

Levante U.D.

23.4

21.3

44.7

8.2

1.5

35.0

44.7

Real Betis

54.9

23.4

78.3

18.4

19.1

40.8

78.3

Ath. Bilbao

32.1

12.2

44.3

4.5

14.5

34.3

44.3

R.C. Celta

38.1

21.4

59.5

5.7

18.7

35.1

59.5

Real Sociedad

31.3

15.5

46.9

5.6

13.9

27.4

46.9

0.5

3.1

3.7

1.9

1.8

3.7

Sevilla C.F.

R.C. Deportivo

Gimnastic

Sources: Saludas, J.M.G. (2009). Ftbol & finanzas: La economa de la Liga de las estrellas (I). Partida Doble, 209(April): 6289;
Club Atltico de Madrid. (2009). Retrieved

Note: teams are listed by order of finish during 2007/2008 season.

tHe atltiCo madrid brand


Atltico Madrid management recognized the power of branding and
realized that the Club must find ways to generate revenue from its
brand.33 fte brand was often the pri- mary reason sponsors wanted to
put their name on football jerseys and stadiums and television networks
wanted to broadcast matches. As a result, the Club commissioned a
study by Young and Rubicam in 2007 to examine the Clubs brand
and to profile its current customer base, all with the goal of fueling
sponsorship income. fte study, which surveyed 3,500 Spaniards,
revealed several key characteristics for the Atltico Madrid brand:34

It had strong awareness and visibility in Spain and was perceived


as familiar yet neutral; it was neutral in that it elicited empathy
from people throughout Spain rather than just in Madrid.
6

Case Researcft Journal Volume 35 Issue 3 Summer 2015

It projected excitement and energy.


fte typical Club subscriber was dynamic, innovative, and open to
change. fte study also found that the Atltico Madrid brand
invoked empathy among
fans.35 In fact, despite its early history of winning and a recent return to winning,
Atltico Madrid and its fans had taken on an almost mythic status in
football fandom. One of Spains most recognized and popular football
media commentators, Michael Robinson, even stated:
Atltico are the only Club in the world who presume to lose . . .
Madrid fans think they are somebody, which irritates Atltico fans,
who are the complete opposite . . . ftey dont win and theyre happy
with it, because it proves they care more. Its almost a masochism, like
an Easter procession, flogging themselves . . . Football in Madrid is good
fun, but it only works for Madrid fans when they win and it only
works for Atltico fans when they nearly win. Ive never seen Atltico
fans so unhappy as the year they won the double. fteyre a stray dog
that has wonderful eyes that stare at you, a dog that will never win
Crufts, whereas Madrid wont even partake in Crufts if they dont think
theyre going to win it.36

Although CEO Gil Marin denied his Club had a reputation for
failure, stating, We arent satisfied with being second to Real Madrid,
many of its fans still referred to the Club as born losers.37 ftis
preference for the underdog even affected consump- tion behavior by
Atltico Madrid fans, a fact that was certainly evident to sponsors. In
fact, a Spanish branding company claimed that Atltico Madrid fans
tended to favor underdog brandsthey were more likely to drink gin
with Kas (a secondary soft drink brand) than with Fanta, own a Sharp
television instead of a Samsung or LG, and vote for fringe political
parties.38

tHe football industry

in

spain

Spanish football developed during the late nineteenth century. In


1928, ten teams (including Atltico Madrid) formed the first Primera
Divisin national league.39 ftough Spaniards often used the term La
Liga to refer only to the Primera Divisin, it also featured a Segunda
Divisin, designated Segunda Divisin A. fte lower leagues, Segunda
Divisin B and Tercera Divisin, were amateur and regionalized. fte
top four placed Primera Divisin teams qualified for the UEFA
Champions League.40 fte winner of La Liga also played against the Copa
del Rey winner for the Supercopa de Espaa. La Liga teams had
historically found success not only in Spain but also in European
competition.41
Most Spanish clubs, including Atltico Madrid, were legally required
to operate as for-profit Sociedades Anonimas Deportivas (SADs).42
A SAD was a private cor- poration owned by shareholders that was
required to operate like a business and issue financial reports. fte only
clubs that operated as public organizations with mem- bers (socios)
rather than shareholders were FC Barcelona, Real Madrid, Athletic Club
Bilbao, and Osasuna.43 Unlike most other leagues in Europe, each

club in Spain negotiated broadcasting rights individually rather than


negotiating and distributing revenue by the league as a whole.44 As a
result, Real Madrid and Barcelona attracted much more broadcasting
revenue than the other clubs in La Liga.45

The Branding of Club Atltico de Madrid: Local or Global?


7

Competition
Spanish Competition
Since the beginning of the twentieth century, Atltico Madrid competed
with its cross- town rival Real Madrid, much like the Yankees and
Mets baseball rivalry in New York City. Prosperous young professionals
favored Real Madrid along with legions of working-class supporters.46
Many considered Atltico Madrid less socially prestigious, but the Club
boasted two million fans, drawn overwhelmingly from Madrids southern industrial suburbs.47 ftese suburbs consisted of large numbers of
working class migrants from poorer parts of Spainan audience that
Atltico Madrid appealed to as the underdog.48
Clubs Real Madrid and FC Barcelona had dominated La Liga for many
years. By the end of the 2007/2008 season, Real Madrid had won La
Liga a record thirty-one times and been runner-up sixteen times.49 It
had also won a record nine European Cups.50 FC Barcelona had won
La Liga eighteen times and been runner-up twenty- two times. It had
also won two European Cups.51 ftese two clubs were among the
richest clubs in the worldReal Madrid ranked number one with
revenues of 365.8 million and FC Barcelona ranked third with 308.8
52
(Exhibit
5).Clubs
Exhibit 5: Themillion
Top 20
Football
in the World by Revenue, 2007/2008

Rank

Club

Revenue
( million)

Country

1.
Real Madrid
365.8
Spain
2.
Manchester United
324.8
England
3.
FC Barcelona
308.8
Spain
4.
Bayern Munich
295.3
Germany
5.
Chelsea
268.8
England
6.
Arsenal
264.4
England
7.
Liverpool
210.9
England
8.
AC Milan
209.5
Italy
9.
AS Roma
175.4
Italy
10. Internazionale
172.9
Italy
11.
Juventus
167.5
Italy
12. Olympique Lyonnais
155.7
France
13. Schalke 04
148.4
Germany
14. Tottenham Hotspur
145.0
England
15. Hamburger SV
127.9
Germany
16. Olympique de Marseille
126.8
France
17. Newcastle United
125.6
England
18. VfB Stuttgart
111.5
Germany
19. Fenerbahce
111.3
Turkey
Sources: Adapted from Football Money League by Deloitte Sports Business Group. (2009);
20.
Manchester
City
104.0
England
Deloitte Football Money League. (2008); Club Atltico de Madrid. (2009). Retrieved from http:// en.clubatleticodemadrid.com/atm/atletico-de-madrid.

Case Researcft Journal Volume 35 Issue 3 Summer 2015

FC Barcelona played at Camp Nou, the largest football stadium in


Europe seat- ing almost 100,000 people, nearly double the size of
Atltico Madrids stadium.53 Real Madrid played in 80,400-seat Santiago
Bernabu Stadium that, unlike most football clubs, its members (or
socios) had owned and operated since 1902.54 According to several
studies, there were about 500 million people worldwide who had heard
of Real Madrid and about 150 million who would consider themselves
serious fans of the Club.55

european Competition
Each country in Europe had its own league of clubs. However, like the
political and economic landscape, football competition had regionalized
within Europe and was administered and controlled by UEFA.56 ftough
similar organizations existed region- ally throughout the world, the large
majority of the top players in the world played on European clubs.
Moreover, the twenty richest football clubs in the world during the
2007/2008 season were all European.57
Football was no longer only about what took place on the field.
European foot- ball clubs, in particular, had begun to transform
themselves into modern sports and media companies, branding teams
and individual players, and generating significant licensing and retail
revenues (Exhibit 6 lists major broadcasting contract agreements and
Exhibit 7 lists Atltico Madrids sponsors).58 A study by Deloitte found
that the top five revenue teams in Deloittes Money League were global
clubs with significant and growing international support (Exhibit 8).59
Deloitte divided revenue into three categories: match day (revenue
derived from gate receipts, including season and mem- berships),
broadcast (revenue from both domestic and international competitions),
and 6:
commercial
from Contracts
sponsorshipsfor
and
merchandising).
Exhibit
Selected(revenue
Broadcast
the
Big Five Leagues
League

Rights Winner

Duration

Start
Average rightsEstimated increase
fees per seasonover previous (m)contract %

English Premier League Various

3 years

2007/2008

1,335

70

French Ligue 1

Canal Plus/Orange

4 years

2008/2009

668

German Bundesliga

Sirius

6 years

2009/2010

500

20

AC Milan

Mediaset

2 years

2007/2008

110

10

Juventus

Mediaset

3 years

2007/2008

110

35

Internazionale

Mediaset

2 years

2007/2008

100

10

AS Roma

Mediaset

2 years

2007/2008

65

25

Real Madrid

Mediapro

7 years

2006/2007

155

70

FC Barcelona

Mediapro

7 years

2006/2007

145

80

Italian Serie A:

Spanish Primera Liga:

Source: Adapted from Football Money League by Deloitte Sports Business Group. (2009, 2008).

Valencia

RTW

5 years

2009/2010

30

Atltico de Madrid

Telemadrid

5 years

2009/2010

42

110

The Branding of Club Atltico de Madrid: Local or Global?


9

Exhibit 7: Club Atltico de Madrid Sponsors, 2007/2008


KIA Motors:

Front of shirt sponsor; on playing field, on website, and in club magazines.

Nike:

Kit manufacturer; small symbol on front of shirt, on website, and in club


magazines.

Kyocera:

Back of shirt sponsor; on playing field, on website, and in club magazines.

PAF:

On shorts and training kits; official gaming website, on website, and in club
magazines.

La Caixa:

Ticketing; on website and in club magazines.

Coca-Cola:

Official soft drink; served in stadium, on website, and in club

magazines. Mahou:

Official beer; served in stadium, on website, and in club magazines.

Banesto:

Official financial services partner; membership card, and


website, and in club magazines.

Viajes El Corte Ingles:

Official travel partner; makes travel arrangements for club and packages
for fans, on website, and in club magazines.

Hugo Boss:

Clothing for first team and coaching staff; on website and in club

magazines. Mundo Deportivo:

MasterCard, on

Sports news partner; on website and in club magazines.

Source: Club Atltico de Madrid. (2009). Retrieved from http://en.clubatleticodemadrid.com/atm/atletico-de-madrid.

ftrough the years, the role of advertising and sponsorships in


football club advertising became well established.60 Like many
multinationals, some clubs were con- solidating advertising into one lead
global agency for advertising and media buying in order to drive big
ideas and maintain consistency in brand meaning. Sponsoring
companies were willing to pay significant amounts for contracts they
knew would give them access to promote their products to the growing
global audience of football fans.61 Major sponsorship deals often
included providing the kit (standard equipment and attire worn by
players) for the team, sponsoring the uniform, and obtaining nam- ing
rights to the club stadium. In 2006, for example, AIG paid 56.5 million
over four years as the shirt sponsor for Manchester United and BenQ
paid 100 million over four years to Real Madrid.62 Atltico Madrid had
had a relationship with kit sponsor Nike since 2001 as Nike promoted
itself against competitor Adidas, which sponsored Real Madrids kits.63
In addition to these traditional revenue streams, it had become
imperative that European football clubs maintain and promote
websites. A report of worldwide Inter- net traffic figures showed that
Manchester United was the most popular football club online, attracting
2.2 million unique visitors to its website in 2007.64 More telling was the
fact that 57 percent of those visitors resided outside the United
Kingdom, indicat- ing the global appeal and reach of the Manchester
United brand franchise. As evident in Exhibit 9, Manchester United was
not alone in its global appeal.

10

Case Researcft Journal Volume 35 Issue 3 Summer 2015

Exhibit 8: Revenues by Source for Major European Clubs

Source: Adapted from Football Money League by Deloitte Sports Business Group. (2009).

However, the majority of clubs in Europe were not financially


successful.65 In 2003, Italys first-league clubs collectively lost over
$360 million.66 In reality, very few European teams had positive
operating margins, much less positive profit margins. In 2006/2007,
only five of the twenty clubs in Spains La Liga and eight of the
twenty clubs in Englands Premier League recorded positive operating
margins.67 Atltico Madrid reported operating losses of 33.6 million in
2006/2007 and 46.5 million in 2007/2008 (see Exhibit 2).

The Branding of Club Atltico de Madrid: Local or Global?


11

Exhibit 9: Worldwide Traffic to Football Sites by Unique Visitors,* March 2007


% Visitation from Teams
Site

Club

Unique Visitors
Worldwide (000)

Home
Country

Non-Home
Country

Manutd.com

Manchester United

2,218

43%

57%

Liverpoolfc.tv

Liverpool

1,497

53%

47%

Arsenal.com

Arsenal

1,435

47%

53%

RealMadrid.com

Real Madrid

1,137

33%

67%

FCBarcelona.com

Barcelona

1,053

26%

74%

ChelseaFC.com

Chelsea

1,000

38%

62%

ACMilan.com

AC Milan

825

34%

66%

Inter.it

Inter Milan

824

49%

51%

Juventus.com

Juventus

619

31%

69%

Om.net

Marseille

531

82%

18%

PSG.fr

Paris St Germain

413

77%

23%

Olweb.fr

Lyon

319

78%

22%

Clubatleticodemadrid.com

Atltico Madrid

219

73%

27%

Sources: comScore World Metrix. (2008, March 19). comScore Releases February 2008 U.S. Search Engine
Rankings. Retrieved from Club Atltico de Madrid. (2009). Retrieved from Club Atltico de Madrid.

*Unique visitors worldwide aged 15+, excludes traffic from public computers such as Internet cafes, or access from mobile phones or PD

For most of the European clubs, the source of losses and of debt
varied, but was often due to overpaying for players in the transfer
market.68 For example, Real Madrid paid $86 million for Zinedine
Zidane in 2001 and $42 million for David Beckham in 2002, and still
only managed to finish fourth in La Liga in 2003.69 Some leading clubs
chose to develop talent internally through football academies rather
than recruit from the transfer market.70 For example, Barcelona
produced more elite young talent than any other club, spending over 6
million on their youth academy.71
Ironically, the football clubs that had attempted to run clubs for a
profit had gen- erally failed when it came to wins. Many industry
experts claimed that debt was the best way to succeed and that an
operating profit was nothing more than unrealized potential.72 So how
did clubs finance the debt? Local governments were often will- ing to
provide a bailout for fear of losing the team. And when governments
were not available, wealthy owners were. ftese owners usually operated on
the assumption that revenue streams would eventually counter the debts
incurred, especially as the global market for football continued to grow

and their brand building generated revenue in other parts of the


world.73
What made losing in league football even more devastating than
losing in other sports leagues, such as the NFL in the United States,
was the special structure of the football system, with lower ranking
teams facing the threat of relegation. As evi- dent from the history of
Atltico Madrid, relegation could be disastrous for a club
12

Case Researcft Journal Volume 35 Issue 3 Summer 2015

financially, competitively, and even for brand equity. Conversely, winning


could mean big money. Just by making it to the thirty-two-team
Champions League, a club ben- efitted from UEFA distribution to
participating clubs. Deloitte estimated that revenue from simply
appearing in the UEFA Champions League could contribute 10 to 15
percent of a clubs annual revenue, and appearance in the final could
add over $50 mil- lion in revenue from merchandising, ticket sales, and
television.74

benCHmarking leading Competitors


ftough every La Liga club in Spain and every top-flight club in
Europe could be considered competition, there were three model clubs
that served as benchmarks: Real Madrid, Manchester United, and Arsenal
(see Appendix 4).

Real Madrid
Most experts viewed Real Madrid as the most successful football club in
Spain, one of the most successful in the world, and a true global
brand.75 Real Madrid was a democratically elected, nonprofit
association owned by its 70,000 members, or socios. As such, the Club
did not have access to capital from a wealthy owner but rather had
traditionally been dependent upon annual fees paid by socios.76
Because of this limited access to capital, Real Madrid sold non-core
assets in the 2000s, such as training fields, and began focusing on core
assets such as VIP boxes in Santiago Bernabu stadium.77 Season ticket
holders held nearly all seats in the stadium.78 fte Club also established a
stand-alone marketing organization, Sociedad Mixta, to manage all
broadcasting, licensing, and merchandising rights. Sociedad Mixta sold
shares to major Spanish companies and paid a percentage of income
directly to Real Madrid.79
Real Madrid management recognized the significance of branding,
studying audi- ence demographics, and developing ways to engage and
interact with fans both on and off the field.80 Real Madrid managers
actually studied how Disney marketed the film The Lion King. ftey
learned that selling tickets to the movie was not the primary source of
revenue. Instead, the real returns were in spin-offs and merchandising. 81
fte Club had recently toured Asia, the United States, and India,
playing exhibition matches against local teams in order to further build
the brand.82 In fact, Real Madrid had helped to attract the largest
attendance ever66,830to Seattles Qwest Field when it played D.C.
United there in 2006.83 Real Madrids president Ramon Calderon had
recently stated, We are trying to increase the potential of our
brand. fte idea is to be more and more popular in the rest of the world.
We have been popular in Spain and Europe for a long, long time.84
Some of its other global moves included:

Targeting globally-recognized sponsors.85

Signing international partnership agreements in order to build


the brand in foreign markets, including with Saudi Telecom

Company, Eurofun (Israel), Total Sports Asia, and Siemens IC


Mobile.86
Signing an agreement with Asia Sports Development in which
Asia Sports would promote the Real Madrid brand in Asia,
including franchised stores, restaurants, and football training
schools.87
Sponsoring international soccer training schools throughout the world.88

The Branding of Club Atltico de Madrid: Local or Global?


13

Negotiating agreements with cable operators to carry Real


Madrid TV on sat- ellite stations reaching Asia, Europe, the
United States, and the Middle East.89
Formalizing a partnership with the U.S. club, Real Salt Lake.90

Real Madrid management believed that outside of Europe, players,


rather than clubs, attracted fans.91 As a result, the Club focused on
buying the best players in the world, or Galcticos, more than trying to
develop players in-house.92 For example, the Club purchased globallyrecognized players, such as David Beckham, Ronaldo, and Zinedine
Zidane.93 fte Club spent about $40 million annually from its revenues for
new player purchases and generated additional funds from the sale of
players.94

Manchester United
Manchester United (Man. U.) was the largest and most successful club
in the English Premier League, having won the league seventeen times
and was champion of Europe three times.95 Many considered Man. U.
the industry standard for managing a football club brand.96 fte Man. U.
brand was viewed as a global brand and was believed by some to
be the most valuable sports brand in the world.97 fte club had
managed its brand as a strategic asset for years.98
From a financial perspective, Man. U. was one of the first clubs to
raise capital by issuing shares on a stock exchange (the London Stock
Exchange in 1991). ftis access to capital enabled club management to
purchase star players and upgrade its stadium amenities. Man. U.
management viewed its fans as customers and employed customer
relationship management (CRM) software to enhance the value it
delivered. fte soft- ware enabled management to use marketing
analytics to build a single view of each supporter and all transactions
with the Club, and to better segment and price matches and ticket
packages.99
Man. U. had been especially successful at generating revenue
beyond match-day. fte presence of star players and wins on the field
enabled the Club to attract valuable sponsorship deals and
broadcasting rights, such as a four-year 56.5 million deal with AIG in
2006.100 fte Club tried to select global sponsors that could add value
to the brand. For example, in partnering with Lycos, the firm helped to
develop foreign- language websites, and in partnering with Dimension
Data, the firm implemented a customer-relations management
system.101 fte Club was also innovative in terms of generating revenue
from other sources, such as soccer schools, a dedicated television/ website
channel, and even a mobile phone service with Vodafone. fte Clubs
global television channel, MUTV, delivered Man. U. programming to fiftyfour countries around the world.102
ftough the Club still generated the majority of its revenues from the
U.K. market, its brand was expanding quickly into Asia.103 It had made a
number of global moves in recent years, including:

Playing exhibition matches against local teams in the U.S. and Asia.104

14

Opening fan shops in Singapore, Dublin, Kuala Lumpur, Cape


Town, and Brunei.105
Partnering with globally-recognized brands, including Nike and
Vodafone, for uniform sponsorships and merchandising. fte Club
contracted with Nike to manage its retail, merchandising, and
licensing operations. In return for its rights under the contract,
Nike paid an annual installment to Man. U. and shared equally
in net profit generated from the contract.106

Case Researcft Journal Volume 35 Issue 3 Summer 2015

Partnering with brands in key markets to build awareness, such


as AIG in the U.S.107
Developing foreign-language versions of the Manchester United website.

From a cost perspective, Man. U. paid some of the highest player


salaries and player transfer expenses in the world.108 fte Club
maintained a mix of home-grown and imported talent and tried to
groom players early through a pipeline of relationships with smaller
clubs around the world.109 In 2005, the London Stock Exchange de-listed
Manchester United when Malcolm Glazer purchased a controlling
interest in the Club in a leveraged buy-out.110 It was still too early to
determine whether this development would have a positive impact on
the continuing growth of the Club.

Arsenal
Arsenal Football Club was a member of the English Premier League,
and, while not as successful as Manchester United, had won thirteen
Premier League titles.111 Many sports marketers viewed Arsenal as a model
club for brand building, particularly given the fact that it had not won any
championships in the past few years but still ranked as one of the
most valuable football brands in the world, according to Deloitte.112
fte key strategy for the Club was self-sufficiency through revenue
generation from match day, broadcast, and commercial revenue, rather
than by being dependent on investments from one wealthy benefactor.
Club management believed that this strat- egy could insulate the Club
from poor performance on the field.113
Unlike some other major clubs, Arsenal did not have a large
benefactor. ftere were several major shareholders along with a number
of minor shareholders.114 fte Arse- nal Supporters Trust, which consisted
of 200,000 paid members, also owned a small number of shares. ftis
gave Arsenal the largest paid membership for a football club in the
world.115 fte Club also placed an emphasis on building new fans and
delivering experiences and relationships with these fans.116 Tactics
included club-level seats and private boxes in Emirates Stadium, loyalty
schemes through direct mail and using its website, and a membership
tier for younger fans (which included reduced ticket prices and access to
special events).
Arsenal had just moved into a new 430 million 60,000-seat
stadium, part of an overall strategy to build revenues outside of match
days.117 fte stadium played host to events such as conferences and
music concerts in addition to football matches. It also welcomed
thousands of tourists for stadium tours and an Arsenal Football Club
museum. Arsenal management attempted to attract sponsors with
premium brands and a global presence, including Emirates Airline and
mobile provider O2.118 Manage- ment also had begun to focus on
reaching international markets, especially in Asia and the Middle
East.119 fte Club had pursued a number of global moves, including:

Employing a CRM system throughout the organization to


communicate with fans around the world and create pathways
for those fans to interact with the Club.120

Targeting globally-recognized sponsors.121


Sponsoring international soccer training schools in twenty-one
countries around the world.122
Creating club-to-club partnerships with Pachuca (Mexico) and the
Colorado Rapids (U.S.).123

The Branding of Club Atltico de Madrid: Local or Global?


15

Establishing grassroots coaching programs around the world,


including in South Africa, Nigeria, Israel, Cyprus, Bosnia, Egypt,
and ftailand, to encour- age coaches to train the Arsenal
way.124

In terms of players, Arsenal had focused on purchasing mid-priced


players (such as Patrick Vieira, Nicolas Anelka, and Robin Van Persie),
developing them, and then making money on transfers as the players
moved on to the more glamorous European teams. ftis approach had
enabled the Club to amass the funds necessary to build the new
stadium while maintaining a positive return on investment.125

tHe global football industry


ftough football was extremely popular in Spain and Europe, the
region certainly was not unique in that respect. Football was a global
phenomenon. FIFA (Fdra- tion Internationale de Football Association
the world governing body for association football) had reported that about
four percent of the world population (265 million players and 5 million
referees and officials) was directly involved in the sport (Exhibit 10).126
Moreover, many analysts viewed regions other than Europe as markets
for sig- nificant potential growth.127 For example, even though Asia and
China exhibited lower than average participation rates (Exhibits 11
12), China already ranked as having more people (26.6 million) directly
involved in the sport than any other country.128 Untapped markets such
as China were also attractive to clubs and their sponsors because they
represented opportunities to establish customer loyalty before competitors. However, fans in such untapped markets were generally likely to
clubs with
strong winning histories, famous players, and
Exhibit 10: Global gravitate
Football towards
Participation
(2006)
129
memorable brand images.

Total

AFC

CAF

CONCACAF

CONMEBOL

OFC

UEFA

Players (000)

264,552

85,176

46,300

43,109

27,778

542

61,647

Male (000)

238,557

80,075

44,940

33,071

24,703

486

55,283

Female (000)

25,995

5,102

1,361

10,038

3,074

56

6,364

Referees and
Officials (000)

5,058

673

630

1,133

168

32

2,422

Total in football
(000)

269,610

85,849

46,930

44,242

27,946

573

64,069

% of population

4.13

2.22

5.16

8.53

7.47

4.68

7.59

Source: FIFA. (2007, July). Big count. FIFA Magazine, 1015.

Total population 6,529,791 3,870,439


909,575
518,613
374,235
12,252
844,677
Abbreviations:
(000)
AFC = Asia (Asian Football
Confederation)
CAF = Africa (Confederation Africaine de Football)
CONCACAF = North/Central America and Caribbean (Confederation of North, Central American, and Caribbean Asso- ciation Football)
CONMEBOL = South America (Confederacin Sudamericana de Ftbol) OFC = Oceania (Oceania Football Confederation)
UEFA = Europe (Union des Associations Europennes de Football)

16

Case Researcft Journal Volume 35 Issue 3 Summer 2015

Exhibit 11: Percentage of Football Players in National Population

Source: Vpel, H., and Steinhardt, M. (2008). Wirtschaftsfaktor fuball. Retrieved from fileadmin/hwwi/Publikationen/Partnerpublikati

Exhibit 12: Top Footballing Nations


Rank

Country

Number
of Players
(millions)

Rank

Country

Players as %
of Population

China

26.2

Costa Rica

27

U.S.A.

24.5

Germany

20

India

20.6

Faroe Islands

17

Germany

16.3

Guatemala

16

Brazil

13.2

Chile

16

Source: Vpel, H. and Steinhardt, M. (2008). Wirtschaftsfaktor fuball. Retrieved from http://www.
hwwi.org/fileadmin/hwwi/Publikationen/Partnerpublikationen/HSH/Fussballstudie_14_B.pdf.

FIFA also reported an especially significant rise in the number of


female play- ers participating in football. Although female players
represented 10 percent of the overall number of players globally in
2006, the growth in numbers since 2000 was 14 percent for females
as compared to 6 percent for men.130 Participation rates varied greatly
by region. For example, female players represented 23 percent of all

players in North/Central American and Caribbean countries, 11 percent


in South America, and
The Branding of Club Atltico de Madrid: Local or Global?
17

10 percent in Oceania and Europe.131 Several countries, including


Sweden, Norway, and Germany, had professional womens soccer
leagues. Moreover, some clubs, such as Bayer 04 Leverkusen in
Germany, sponsored both professional mens and womens clubs.
Womens clubs were also attractive because they generally ran on much
smaller annual budgets (around $400,000).132
A recent Pricewaterhouse Coopers study projected global entertainment
and media market for sports to reach $140.6 billion by 2012.133 Of
that total, sponsorship and merchandising revenue was predicted to
reach almost $60 billion by 2012. ftough it was ultimately the
sponsoring company that determined the value of a sponsorship
agreement, sponsorship decision makers generally attempted to quantify
several fac- tors associated with sponsoring a particular football club: the
value of brand awareness and visibility, the increase in brand loyalty, the
change or reinforcement in corporate image, the value of showcasing
social responsibility, and the resulting increase in other brand
experiences (such as website usage and gaming).134
Marketing, especially branding and positioning, was particularly
relevant in this new global environment. Worldwide, the game
generated nearly $3.1 billion annually from the sales of branded footballrelated products, such as jerseys and memorabilia. 135 In Europe alone,
forty-four million fans owned a football scarf or jersey and 40 million
owned a football-related T-shirt.136 International markets accounted for
40 percent of sales of Manchester United jerseys, and when Real Madrid
toured Asia in 2003, it sold 210,000 jerseys in only 17 days.137
fte head of marketing for Real Madrid, Jose Angel Sanchez, stated in
2004, Even- tually you may get just six global brand leaders. People
will support a local side and one of the worlds big six. We have to
position ourselves for that.138 One way Real Madrid and other European
clubs were doing that was by looking international, especially toward
Asia. By buying more players from Asia, European clubs believed they
might attract Asian fans and ultimately foster club loyalty.139
European clubs were not only buying foreign players, but they were
also buying foreign clubs or creating partnerships with clubs in other
parts of the world. For exam- ple, the Dutch club, Ajax, created Ajax
Cape Town in South Africa in 1998, and the English club, Sheffield
United, took over Chinese club Chengdu Wuniu in 2005.140 Many of
these deals did not involve a direct outlay of funds but rather joint
market- ing. In fact, Manchester United had even developed a joint
marketing deal with a team from another sport, the New York Yankees.
Under the deal, the two teams agreed to sell each others merchandise,
collective sponsorship, broadcast, and Internet rights.141 Although many
clubs had also begun to recognize the power of cultural segmenta- tion,
this trend was not necessarily new. For example, Celtic Football Club in
Glasgow, Scotland, was founded in 1888 by and for the Irish Catholic
immigrant diaspora living in the West of Scotland.142 During the 2006
UEFA Cup, a match in Denmark between the Danish club, FC Randers,
and Turkish club, Fenerbahe, attracted thousands of flag-waving Turks
living throughout Scandinavia and Germany, actually outnumber- ing fans
in the stadium for the local team.143 Similarly, one only had to look at

the crowds that showed up for Mexico matches when they played in the
United States to
recognize the power of the Hispanic market in the Americas. 144
With over forty-two million Hispanics, the U.S. Hispanic market was
already larger than four of the six Spanish-speaking countries that
played in the 2006 World Cup.145 In fact, a number of professional MLS
football clubs in the U.S. had begun to target Hispanic fans.146
Advertisers spent almost $250 million in 2007 on Spanish-language

18

Case Researcft Journal Volume 35 Issue 3 Summer 2015

television football programming in the U.S., a figure 59.6 percent higher


than only one year before. 147 Univisions live broadcast of a U.S. versus
Mexico match in 2008 attracted 9.6 million television viewers, more
than ABC, CBS, NBC attracted for the entire evening.148 A 2008
study (Exhibit 13) showing the nations with the most significant
immigrant populations further demonstrated the potential of cultural
seg- mentation.149 In fact, both Real Madrid and FC Barcelona were
pursuing overseas markets. Barcelona, for example, was already in
talks with Fox Sports en Espanol to license its matches on Spanishlanguage cable television in the U.S., a network with nine million cable
and satellite households.150 Real Madrid, in addition to touring the U.S.,
had announced plans to open apparel stores, acquire sponsorships with
American companies, and unveil an English-language version of its inhouse television station, Realmadrid TV.151
Exhibit 13: Foreign-Born Population Statistics
Rank

Country

Percent of
Host Country
Population in 2000

Rank

Country

Number of
Foreign-born in
2000 (millions)

U.A.E.

70.4

United States

34.6

Saudi Arabia

23.9

Russia

11.9

Switzerland

21.8

Germany

9.1

Australia

21.4

France

6.3

Canada

18.1

India

6.3

Cote dIvoire

14.0

Canada

5.7

United States

12.2

Ukraine

5.5

Germany

11.9

Saudi Arabia

5.3

Austria

11.4

U.K.

4.9

10

France

10.6

10

Pakistan

4.2

Source: United Nations. (2008). Retrieved from http://data.un.org/Data.aspx?d=POP&f=tableCode%3A44.

football Consumers
fte consumer market for football included everyone from those who
attended live matches, to those who watched or listened to matches
through various media outlets, bought fan memorabilia, supported
team sponsors, or simply read about the club in the newspaper. Of
those who attended live football matches, the Handbook on the
Economics of Sport divided them into three different categories:152
Members who bought a season ticket for either half or the whole season.
Paying spectators who bought a ticket for a particular match.
Guests, who benefited from the clubs social initiatives and did
not pay to see a match.

Whether attending a live match, watching on television, or simply


rooting for a team, the value of football consumption derived from the
quality of performance of the club and/or identification with the club.153
Football consumers were some of
The Branding of Club Atltico de Madrid: Local or Global?
19

the most passionate buyers in the world. Although support for a football
club might be equated to other forms of product loyalty, support for a
football club often went beyond loyalty into the realm of passion and
love.154 For instance, fanatics of a football club felt that the club
belonged to them and often even took credit for wins on the field.
Such supporters budgeted significant amounts of money for sports, were
regular television viewers, read sports articles, bought merchandise, and
had a high emotional attachment to a sports franchise. ftese super
supporters did not fit traditional eco- nomic models of rational behavior;
they behaved irrationally, supporting their team in good times and bad
rather than simply changing teams when their team began to lose.
Atltico Madrid supporters were often cited as examples of such
fanatical behavior.155 It was important for football clubs to attract fans at
an early age, as studies had shown that most football fans chose a club
as a child and few changed their preference later in life.156
Sports consumption was somewhat inelastic among loyal fans although
there were also bandwagon supporters (people who claimed to be a fan
of a team, but only when their team was winning; they were less likely
to attend matches or own team merchan- dise). An editorial in USA
Today described such behavior well: We live in an age in which its easy
to simply follow the winners. ftanks to incessant merchandising and a
multitude of sports television channels, we can proudly adopt whatever
team is enjoy- ing a good run.157 Moreover, such supporters were often
more likely to be non-local than those considered fanatics. However, they
were also what the club needed to attract because with them came more
revenue from television contracts and licensing.158
fte motivations behind football consumption were not identical from
country to country according to one respected sports marketing
agency.159 fte most important motive behind football consumption for
English and German fans was devotion to a specific club, whereas
French fans were more motivated by the pure enjoyment of the game
itself rather than the teams involved and the outcome of the match.
Chinese football fans did not yet have deep loyalties to specific clubs
and were motivated by an overall love for the game. ftus, Chinese were
more attracted to the top clubs simply because many of the worlds
best players played for such clubs. Nostalgia often played a role for
consumers around the world who had emigrated from Europe and Latin
America to other countries.160
In Spain, over half of the population considered themselves soccer
fans.161 In fact, a recent study found that more than 60 percent of
Spanish fans planned their lives around the next football match, 69
percent said they performed some superstitious ritual in order to help
their team win, and 70 percent claimed they preferred watching the
match to making love.162 Although Real Madrid and Barcelona claimed
the most fans throughout Spain, most Spanish clubs drew their fans
from within the region in which the club was located.163

tHe future

Recalling Gil Marins goal to double revenues in two years, management


had a lot to consider.164 Based upon input received from both internal
and external stakeholders, a number of key factors stood out:
Gil Marin was committed to leveraging the Atltico Madrid
brand and believed the brand could complement and add value
to the brands of other companies.165 For sponsors, the Atltico
Madrids brand offered three major

20

Case Researcft Journal Volume 35 Issue 3 Summer 2015

advantages: 1) high visibility with national scope; 2) values of


excitement and energy, values that were especially complementary
to sectors such as new technologies, telephony, air transportation,
energy, financial services, and automobiles; and 3) an
opportunity to connect with football fans in general and Atltico
Madrid fans in particular.166
Brand equity helped to facilitate customer acquisition and
retention, to grow revenue from licensing, retail, and television
revenues, and to drive profit margin. As a percentage of
revenue, Atltico Madrids marketing expenses were still less
than leading clubs but the Club was expected to increase its
marketing budget in the future to 15 percent of gross revenue.167
fte Director of Communication had recently commented that
the market- ing campaign was more than simply for fan
recruitment purposesIt was a moment in which we had to
shift the pessimistic tendency of the fans, we had to transmit a
sense of strength in order to get their team out of the depths.168
ftough marketing could certainly help, Atltico Madrid still
needed to win athletically in order to win financially. fte Club
needed good players but this was not easy given the deep pockets
of competing clubs. However, investment in players affected more
than one component of a clubs business plan. Invest- ment in
players represented the promise of future sales, attracting
corporate sponsors, enhancing awareness of the brand in the
media, and ultimately energizing fans.169
ftere was tremendous risk in relying on players for brand
building and revenue growth.170 Even if Atltico Madrid were
to win La Liga and the Champions League, it was expensive to
keep star players and there was always a chance of losing
internally developed up-and-coming star players to the transfer
market.171 Salaries averaged between 62 and 64 percent of
revenue in the top leagues in England, Spain, Italy, and France
and around 45 percent in Germany.172 Hiring foreign players
carried both risks and rewards. fte risk of hiring too many nonSpanish players was that fan loyalty might be dam- aged within
Spain, but the reward of hiring non-Spanish and non-European
players was that it might be easier to build a fan base
outside of Spain and Europe.173
Wherever in the world management decided to target the brand,
it must be careful in how it positioned the Club to its target
market. In Spain, Atl- tico Madrid was positioned as a working
class club with a fighting spirit, but would this positioning work
in other parts of the world?174

notes
1. When football appears alone in this case, the word denotes
soccer in Aus- tralia, Canada, Ireland, New Zealand, and the
United States. When referring to indigenous forms of football in

these countries, this case employs the national adjective (e.g.,


American football or Australian football.)
2. Aldam, N. (2008, May 23). La Liga: Club by Club Review of
the Season 2007/2008. Soccerlens.com. Retrieved from
http://soccerlens.com/la-liga-club- by-club-review-of-the-season200708/7481/.

The Branding of Club Atltico de Madrid: Local or Global?


21

3. Gavira, M. A. (2007, March 6). El Atltico de Madrid: del infierno de segunda al


paraso
de
la
publicidad.
elEconomista.es.
Retrieved
from
http://
www.eleconomista.es/empresas-finanzas/noticias/176283/03/07/El-Atletico- de-Madrid-delinfierno-de-segunda-al-paraiso-de-la-publicidad.html#. Kku8EVC6f7kCmqL.
4. Espaciodircom.blogspot.com. (2007, March 7). Un estudio destaca el poten- cial de la
marca
del
Atltico
de
Madrid.
Retrieved
from
http://espaciodircom.
blogspot.com/2007/03/un-estudio-destaca-el-potencial-de-la.html.
5. Steckelmacher, H. (2007, September 20). Can Atletico Madrid finally rejoin Spains
elite? Soccerlens.com. Retrieved from http://soccerlens.com/can-atletico- madrid-finallyget-back-to-the-elite/3196/.
6. Club
Atlticode
Madrid.(2009).
Retrievedfromhttp://en.clubatleticodemadrid.
com/atm/atletico-de-madrid.
7. Duff, A. (2007, March 5). Atletico Madrid Aims to Double Sales, Emerge From Reals
Shadow. Bloomberg.com. Retrieved from http://www.bloomberg. com/apps/news?
pid=newsarchive&sid=aySOcPPNTLHs.
8. Football-espana.net. (2009). Atletico Madrid History. Retrieved from http://
www.football-espana.net/clubs/Atletico%20Madrid/history.
9. A glossary at the end of the case defines key terms that appear in bold font in the
text.
10.en.clubatleticodemadrid.com. (2015). A Spanish and European Great. Retrieved
from http://en.clubatleticodemadrid.com/atm/football.
11.Soccertourguide.com. (2015). Estadio Vicente Calderon History and Infor- mation.
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estadio-vicentecalderon-history-information-seating-plan-chart/.
12.Club Atltico de Madrid. Retrieved from http://clubatleticodemadrid.com/ galerias/elpunto-de-encuentro-de-los-atleticos-de-todo-el-mundo?modo= vertical.
13.Libertadigital.com. (2007, August 30). Atletico Reach a Deal with the City for
redevelopment of Calderon. Retrieved from http://www.libertaddigital. com/deportes/elatletico-llega-a-un-acuerdo-con-el-ayuntamiento-para-larecalificacion-del-calderon1276310420/.
14.Realmadrid.com.
(2015).
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15.Telegraph.co.uk. (2004, May 17). Jesus Gil. Retrieved from http://www.
telegraph.co.uk/news/obituaries/1462047/Jesus-Gil.html.
16.Miguelez, J. (1993). Jess Gil despide al mdico del Atltico y al preparador fsico.
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754268404_850215.html.
17.Clements, C. (2013, October 21). La Liga Seasons: A Campaign from Hell for Atletico
Madrid2000/2001. Retrieved from http://footballrepublik.com/ la-liga-seasonsseason-hell-atletico-madrid-200001/.
18.Segovia, A., Mart, C., and Urrutia, G. R. (2007). Atltico de Madrid: How to get out of a
slump. IESEinsight. Retrieved from http://www.ieseinsight.com/doc. aspx?id=794&ar=12.
22

Case Researcft Journal Volume 35 Issue 3 Summer 2015

19.Antolinos, P. (2014, December 27). Torres buscar su gol 100 con


el
Atltico.
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20.Baskett, S. (2003, May 29). Gil steps down as Atletico president.
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21.BBC. (2007, July 4). Liverpool complete Torres signing.
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22.Steckelmacher, H. (2007).
23.UEFA.com. (2015, January). Club Atletico Madrid. Retrieved from
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.
24.Postigo, F. S. (2005). Fuentes documentales deportivas aplicadas
a la historia de un club deportivo Espaol: Historia del Club
Atltico de Madrid. Univer- sidad Complutense de Madrid. ISBN:
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25.Ieseinsight.com. (2007). Atletico Madrid: How to Get Out of a
Slump. Retrieved from
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26.20minutoes.es. (2007, August 1). Eternamente grande, la nueva
campaa publicitaria del Atltico de Madrid. Retrieved from
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deportes/noticia/atletico-de-madridgrande-publicidad-266212/0/.
27. Ibid.
28.Mars, A. (2013, May 31). Por qu somos del Atleti? Retrieved
from
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economia.elpais.com/economia/2013/05/31/actualidad/1370022
428_ 146046.html.
29.Garcia, C. (2011). Real Madrid Football Club: Applying a
Relationship- Management Model to a Sport Organization in
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Communication, 4: 284299.
30.Talbot, S. (2006, January). More than a game: Atletico Madrid vs
Real
Madrid.
Fourfourtwo.
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31.Club
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32.Colchonero.com. (2008, February 27). Fichajes a costa del
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33. Gavira, M. A. (2007).

34. Ibid.
35. Marketingdirecto.com. (2007). El Atltico de Madrid Apuesta
por
el
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36. Talbot, S. (2006).
37. Duff, A. (2007).
38. Tellechea, E. (2011, November 10). En el ojo ajeno: Marcas
tipo
Atltico
de
Madrid.
Yorokobu.
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23

39. Laligaweekly.com. (2015). History of La Liga. Retrieved from http://www.


laligaweekly.com/history-of-la-liga.
40. Worldsoccer.about.com. (2015). Understanding the Primera Division. Retrieved from
http://worldsoccer.about.com/od/leaguesandclubs/a/Understanding_the_ Primera_Division.htm.
41. Sobrefutbol.com. Ftbol: UEFA Europa League. Retrieved from http://www.
sobrefutbol.com/torneos/copa_uefa_detalle.htm.
42. Garcia, J. (2009, June 10). Cerezo insisti en la injusticia de las Sociedades
Annimas Deportivas. Diario AS. Retrieved from AS. http://futbol.as.com/
futbol/2009/06/10/mas_futbol/1244615250_850215.html.
43. Blaugranas.com. Enciclopedia del F.C. Barcelona. Retrieved from http://www.
blaugranas.com/wiki/barcelona.
44. Vrooman, J. (2007). fteory of the Beautiful Game: fte Unification of Euro- pean
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45. CNN. (2009, February 12). Real Madrid remain top of latest rich list. Retrieved from
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46. Talbot, S. (2006).
47. Ibid.
48. FIFA.com. Real Madrid CF VS Atltico Madrid: No love lost in
Madrid.
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49. LaLiga.com. Retrieved from http://usa.laliga.es/en/lfp/winners.
50. Europeancuphistory.com.
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51. Rtve.es. (2009, May 29). El Bara en las finales de la Copa de
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52. Deloitte Sports Business Group. (2009), p. 6.
53. Barcelona.de. Camp Nou, stadium of FC Barcelona. Retrieved from
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54. Realmadridfans.org. Reglamento del Real Madrid F.C. 1902.
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55. Holmes, S. (2006, August 14). Royal bounty for Real Madrid. Business Week,
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56. Holt, M. (2005, May). UEFA, Governance, and the Control of
Club Compe- tition in European Football. London, UK: Birkbeck
Sports Business Centre.
57. Deloitte Sports Business Group. (2009), p. 6.
58. Ibid.
59. Ibid.
60. Chadwick, S. and Holt, M. (2007). Building global sports brands:
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33. In Michel Desbordes (Ed.) Marketing and Football. Oxford,
UK: Elsevier Ltd., 2150.

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61. Fisher, G. (2008). Football AdvertisingHow Football Clubs Make Money.


Soccerlens.com.Retrievedfromhttp://soccerlens.com/football-advertising/11782/.
62. Noon, C. (2006, April 6). Glazers Man Utd
Inks Sponsor Deal with AIG. Forbes.
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63. iRealMadrid.com. (2009, October 6). Atltico
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64. PR Newswire. (2007, May 16). Top
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65. A. T. Kearney. (2004). Playing for Profits, p. 1. Chicago, IL: A. T. Kearney,
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66. Ibid.
67. Saludas, J. M. G. (2009). Ftbol &
finanzas: La economa de la Liga de las
estrellas (I). Partida Doble, 209(April):
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Football clubs costs spiral upwards.
Financial
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68. Ewing et al. (2004).
69. Ibid.
70. Amies, N. (2010, May 1). As transfer prices
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71. Biermann, C. (2007, November 30).
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Rolling out of control. ESPN.com.
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Ibid.
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Callejo, M. B., and Forcadell, F. J. (2006).
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76. Holmes, S. (2006).


77. Ibid.
78. Ibid.
79. Quelch, J., Nueno, J. L., and Knoop, C. (2007, June 28). Real
Madrid Club de Futbol. Harvard Business School Publishing, Case
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80. Carvajal, D. (2005, November 6). Real Madrid, the galActico
of building a branding empire. fte New York Times.

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81. Economist. (2004, July 1). fte soccer business: fte Real deal. Economist, p. 62. 82.
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83. Ibid.
84. Holmes, S. (2006).
85. Callejo and Forcadell. (2006). p. 59.
86. realmadrid.com.
(2008).
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87. Peoples Daily. (2003, August 15). What Did the Real Madrid
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88. UNHCR. (2007, June 27). Real Madrid trains refugee children
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89. Carvajal, D. (2005).
90. New York Times, fte. (2007, July 21). fte Real Story: Madrid
to Salt Lake City. fte New York Times Soccer Blog. Retrieved from
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91. Carvajal, D. (2005).
92. Lowe, Sid. (2006, March 30). Figo slams galactico circus at Real
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93. Carvajal, D.
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Holmes, S.
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95. Manutd.com. Retrieved from http://www.manutd.com/en/History.aspx.
96. Ewing et al. (2004).
97. Forbes. (2005, April 1). fte Richest Soccer Teams. Forbes.
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98. Hill, J. S. and Vincent, J. (2006).
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100. BBC. (2006, April 6). Man Utd sign 56m AIG shirt deal.
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101. Hill, J. S. and Vincent, J. (2006).
102. Ibid.

103. Independent. (2007, May 7). Marketing magician propels the Man
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104. Ibid.
105. manutd.com
106. Ewing et al. (2004).

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Case Researcft Journal Volume 35 Issue 3 Summer 2015

107. BBC. (2006).


108. Sherwood, Bob. (2007, May 31). TV revenue poised to fuel
football wage inflation. Financial Times. Retrieved from
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s/0/62efb57e-0f14-11dc-b444000b5df10621.html#axzz3XgSB4omw.
109. Nauright, J. and Ramfjord, J. (2010). Who owns Englands game?
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110. BBC. (2005, May 12). Glazer wins control of Man United. BBC
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111. Arsenal.com. Retrieved from http://www.arsenal.com/history.
112. Simmons, M. and Simmons, J. (2006). Arsenal: Winning
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113. Varley, M. (2008, August 7). Why Arsenals marketing strategy
isnt just about football. UTalkMarketing. Retrieved from
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114. Daily Mail. (2007, September 18). Who owns Arsenal? Daily Mail.
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115. Varley, M. (2008).
116. Ibid.
117. Ibid.
118. Ibid.
119. Ibid.
120. CIBER UK. (2006). Move to Emirates Stadium is the Catalyst
for Imple- menting CRM at Arsenal FC. Retrieved from
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121. Varley, M. (2008).
122. playthearsenalway.com.
123. Arsenal.com. (2009, September 7). fte Colorado Rapids Major
League
Soccer
Club.
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the-coloradorapids-major-league-soccer-club.
124. Arsenal.com. (2010, February 19). Arsenal in the Global
Community. Retrieved http://www.arsenal.com/community/arsenalin-the-global-community.
125. Altshule, E. (2009, October 26). Arsene Wengers Moneyball
Strategy.
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126. Owen, D. (2007, October 20). Move over, Barcelona Formed
150 years ago, non-league and amateur Sheffield FC is proud to
call itself the worlds first foot- ball club. Financial Times, p. 1.

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127. Bodet, G. and Chanavat, N. (2010). Building global football brand equity lessons from
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128. Vpel, H. and Steinhardt, M. (2008). Wirtschaftsfaktor fuball. Retrieved from
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129. Ibid.
130. FIFA. (2007, July). Big count. FIFA Magazine, 1015.
131. Sharratt, J. (2011, March 11). Female Players; fte struggle to find an audience and
investment for a sporting elite. Five in Midfield. Retrieved from http://
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132. Ibid.
133. PricewaterhouseCoopers. (2008). Global Entertainment and Media Outlook: 2008
2012. New York, NY: PricewaterhouseCoopers LLP, p. 10.
134. International Public Relations Association. (2007, October 6). Adding Value ftrough
Sponsorship.
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135. Ewing et al. (2004).
136. Asian Football Business Review. (2006, March 10). Insight into European foot- ball
consumer
trends.
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137. Ewing et al. (2004). Holmes, S. (2006).
138. Economist. (2002, May 30). For love or money. Economist
Special
Edition.
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139. Piercy, J. (2014, October 13). Business of Sport: Real Madrids
mission to take over the Gulf. Sport360.com. Retrieved from
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140. Ajax
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History.
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(2005, December 13). Sheffield United takes over Chinese soccer
club.
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eng20051213_227501.html.
141. Marber, A., Wellen, P., and Posluszny, S. (2005). fte Merging of
Marketing and Sports: A Case Study. Marketing Management
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142. Flynn, B. (2009). fte Garrison Game. In Barry Flynn (ed.)
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143. Jorgensen, M. B. (2008). Transnationalising Civil Society?
fteoretical and empirical reflections on how to transnationalise
citizenship. Centre on Migra- tion, Policy and Society. Working
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144. Borthayre, B. (2006, May 30). World Cup Soccer and the
Hispanic
Market.
Retrieved
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145. Ibid.

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Case Researcft Journal Volume 35 Issue 3 Summer 2015

146. Ortiz, M. B. (2009, October 14). Hispanic


market part of DNA of MLS. ESPN.
Retrieved
from
http://www.espnfc.us/story/685263/hispanicmarket- part-of-dna-of-mls.
147. De Lafuente, D. (2008, June). Are You
Ready for Some Futbol? Marketing Y
Medios.
148. Ibid.
149. United
Nations.
(2008).
Foreign-born
population by country/area of birth, age and
sex.
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%3A44.
150. Ewing et al. (2004).
151. Holmes, S. (2006).
152. Andreff, W. and Szymanski, S. (2006). Handbook on the
Economics of Sports. Cheltenham: Edward Elgar Publishing, p.
476.
153. Borland, J. and Macdonald, R. (2003). Demand for Sport.
Oxford Review of Economic Policy, 19(4): p. 479.
154. Barajas, A. and Urrutia, I. (2007). Economic impact of support
in Spanish professional football. International Journal of Sorts
Marketing and Sponsorship, 8(3): p. 273.
155. Ibid, p. 274.
156. Johnston, D. (2004). Consumer loyalty amongst sport fans: AGF
case study. ASB. Institut for Marketing, Informatik og Statistik. CM
Markedskonomi, pp. 3536.
157. Wendel, T. (2005, November 1). fte rise of the fair-weather
fan.
USA
Today.
Retrieved
from
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158. Fain,
I.(2013,
February
4).Displacedfansremainconnected
andvaluableto teams. SportsBusiness Daily. Retrieved from
http://m.sportsbusinessdaily.com/
Journal/Issues/2013/02/04/Opinion/From-the-Field-of-FanEngagement. aspx.
159. Ramsay, J. (2006, July 3). Rivals on the Pitch. Brands and
Branding. Retrieved from http://www.brandsandbranding.co.za/rivalson-the-pitch-global-football- fans-are-united-and-divided-in-theirpassion-for-the-sport/.
160. Ibid.
161. Quelch, J., Nueno, J. L., and Knoop, C. (2007), p. 7.
162. Guardian, fte. (2008, May 24). Sex is just no substitute for
Spanish
fans.
Retrieved
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163. Barajas and Urrutia. (2007), p. 275.


164. MarketingNews.es. (2007, March 7). La marca Atltico de
Madrid es afn a sectores como telefona y energa. Retrieved from
http://www.marketingnews.
es/grandescorporaciones/noticia/1038676028205/marca-atletico-madrid- afinsectores.1.html#sthash.86NgJsIP.dpuf.
165. Espaciodircom.blogspot.com. (2007).
166. MarketingNews.es.

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167. Gay de Libana, J. M., Carvalheira, F., and Oliveira, R. (2008). Ftbol & finanzas: La
economa de la Liga de las Estrellas 2007/08. Presentacin del Anlisis Contable de los
Estados Financieros de la temporada 2007/08. Primera Divisin Liga Espaola. Retrieved
from http://biblioteca.figc.it/4942/.
168. Mora y Araujo, M. (2008, March 21). Reborn Atletico blossom after dark days of Gil.
Financial Times.
169. Knowledge@Wharton. (2007, May 30). How to succeed in the market for signing up
soccer players. Retrieved from http://knowledge.wharton.upenn. edu/article/how-to-succeedin-the-market-for-signing-up-soccer-players/.
170. Maio, S. (2008). fte evolution of business soccer. Retrieved from
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171. fte Independent. (2009, June 16). Torres blasts Spanish clubs over foreign imports.
The Independent.
172. DW Staff. (2008, July 28). Klinsmann: Lack of cash no excuse for failure in
European soccer. Deutsche Welle.
173. Malek, C. (2009, June 23). Spanish inquisition: Are Atletico ready to break
tradition?
goal.com.
Retrieved
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spain/2009/06/23/1341699/spanish-inquisition-are-atletico-madrid-ready-to- break.
174. Talbot, S. (2006).

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Case Researcft Journal Volume 35 Issue 3 Summer 2015

glossary
Copa del Reyfte Kings Cup was an annual football cup
competition hosted by La Liga for Spanish teams. It was founded in
1902 and hosted eighty-three teams each year. FC Barcelona had won
the championship the most times. Entry was limited, with only the
Primera Divisin and twenty-three teams from the Segunda and Tercera
Divisins invited.
GalcticosA Spanish term used to describe expensive, world-famous
football play- ers. fte term was created under Florentino Prezs
presidency of team Real Madrid. Since its inception, the term galcticos
had come to refer to both the transfer policy for players and the players
themselves.
Kitfte standard equipment and attire worn by players. fte kit was
different from the uniform because the uniform consisted of only the
shirt, shorts and socks although the terms were often used
interchangeably. Kits were typically sponsored by a company and would
display the logo of the sponsor.
La Ligafte Liga Nacional de Ftbol Profesional was the top
professional football association of the Spanish football league system.
La Liga was also considered one of the most popular professional sports
leagues worldwide. ftere were three divisions in La Liga based on team
rankings and performance.
Primera DivisinAlso known as La Liga, the Primera Divisin held
the top twenty teams in the Spanish football league system. fte teams
Real Madrid and Barcelona had dominated the league since the 1950s,
although fifty-nine teams had competed in the league in total. fte
lowest three teams at the end of each season were dropped to the
Segunda Divisin.
Relegation (and Promotion)A process that took place at the
end of the football season in which the top teams in a division moved
up (promotion) to the next higher division, in replacement for the
bottom teams from that same division that moved down (relegation) to
take the place of those teams in the lower division. Depending on the
country, this process might continue down through many levels, such as
between 2 and 3, 3 and 4, and so on.
Transfer SystemA restriction on the freedom of professional football
players to transfer between clubs. It was created to prevent richer clubs
from luring players away from smaller clubs, but was deemed an
unjustifiable restraint of trade in 1981 for Spanish clubs, allowing
players to move freely.
Segunda Divisinfte middle division for Spanish teams in the La
Liga association. Also known as Liga Adelante, it hosted twenty-two
teams each season, the top three teams of which were eligible to be
promoted to the Primera Divisin at the end of the season.
Sociedades Anonimas Deportivas (SADs)fte public limited sports
company (SAD) status was adopted in 1990 to improve financial
management and transparency in sports clubs. Teams with SAD

designation often added the suffix to their name as with Club Atltico
de Madrid, SAD. Several teams such as Real Madrid retained their noncommercial sports designations for historical reasons.

The Branding of Club Atltico de Madrid: Local or Global?


31

appendix 1: spanisH/european leagues

a nd

Competitions

Spanish Leagues
Like other countries in Europe, Spanish football clubs were divided
into several national leagues. All the members of each league played
each other twiceonce at home and once away during the regular season.
Standings were determined by points, with teams receiving three points
for a win and one point for a draw (or tie). fte champion of each
national league was determined by the best overall record (great- est
number of points) at the end of the regular season, as there was no
championship game. Promotion and Relegation existed because there
were no league franchises as there were in U.S. sports leagues.
Instead, there were football clubs who competed in their league for
the respective season. At the end of each year, teams were promoted
and relegated between divisions for the next season. Generally, the
number of teams exchanged between each pair of leagues was
identical. In addition, the top four per- forming clubs in La Liga in Spain
qualified for European-wide competitions.

Spanish Cup Competitions


Copa del Rey
A competition contested by all teams from the Primera Divisin and
Segunda Divisin, about twenty-three teams from the Segunda Divisin
B, and the champions from each group in the Tercera Divisin. fte
winner qualified for both the Supercopa de Espaa and the UEFA Cup
the following season.

Copa Federacin de Espaa


A Spanish football competition for teams from the Segunda Divisin B,
the Tercera Divisin, and sometimes from the Divisiones Regionales
which failed to qualify for or were eliminated in first round of the Copa
del Rey.

Supercopa de Espaa
A two-game championship contested by the winners of the La Liga and
the Copa del Rey.

European-wide Competitions
UEFA Champions League
fte UEFA Champions League was the most prestigious competition in
Europe. Win- ners of national leagues (and one or more runners-up from
some countries) qualified for the UEFA Champions League the next
season. fte Champions League involved four stages: a qualification
tournament, a first phase regular season (thirty-two clubs), a second phase
regular season (sixteen clubs), and then an eight-team single-elimination

playoff leading to a final championship game (similar to the Super Bowl


in the U.S.). fte financial value of appearing in the Champions League
was significant. In 2006/2007, half of the revenue from participating
clubs was distributed as fixed sums and half in accordance with the
value of the respective national markets. For example, in 2006/2007,
each of the thirty-two Champions League participating clubs received

32

Case Researcft Journal Volume 35 Issue 3 Summer 2015

a participation premium of 2 million. Each club also received


400,000 per group match played. Group victories were worth
600,000, and each draw 300,000. fte sixteen teams that made it to
the first knockout round received a bonus of 2.2m each. fte eight
quarter-finalists received 2.5 million each and the four semi-finalists
each received 3 million. fte winner of the Champions League final
received 7 million and the runner-up received 4 million. ftese figures
were in addition to income from ticket sales for each match. In terms
of the other half of the prize money, each clubs share depended
upon the value of its national market.

UEFA Cup
fte UEFA Cup was the second-most prestigious competition in
Europe. Runners- up from national leagues qualified for the UEFA Cup
competition. fte competition began with single-elimination matches
until only forty teams remained. Teams then entered five-team groups
for round-robin play. Top group teams then competed in two-legged
knockout matches leading to a single-game championship game.
For those clubs that made it to the UEFA Cup in 2006/2007, each club received
70,000 for each round played, from the first qualifying round to the
first round. Teams that played in the group stage received a fixed
sum of 70,000. Winning in the group stage was worth 40,000 and
a draw was worth 20,000. Teams that went through to the
knockout stages received 70,000 for the round of thirty-two and
the same amount for the round of sixteen. UEFA Cup quarter-finalists
received
300,000 each, while the semi-finalists received 600,000 each. fte
winner of the final received 2.5 million and the runner-up received
1.5 million. Similar to the Champions League, quarter-finalists also
earned a sum in accordance with the value of their national market.

The Branding of Club Atltico de Madrid: Local or Global?


33

appendix 2: ameriCan professional sports


and european football Compared
American System

European System

Each American professional sports


league
(football,
baseball,
basketball, hockey) operated in a
single two-phased competi- tion,
regular season and playoff season,
that ended with a definitive
champion. fte reg- ular season
served as a qualification round for
the playoff season, which declared
the champion through head-to-head
elimina- tion play; the winner
stayed and the loser went home.
fte season always culminated in a
single championship game (Super
fte professional leagues consisted
of divisions and/ or conferences
that geo- graphically or otherwise
divided the league into groups for the
regular season. Teams within a
group played each other far more
often than other teams. Certain
clubs would not face each other at
all (in the NFL, some clubs might
not face each other in the regu- lar
Qualification for the playoffs was
governed according to divisions
and conferences. Being a divisional
champion outweighed the overall
record of wins, losses, or draws of
clubs in other divisions. Overall
record was the second qualifier to
round out the playoff field.

European football ran multiple


competi- tions concurrently, each
culminating with its own champion.
Some competitions used a regular
season format, some used a headto-head format, and others used a
combination.
Success
in
one
competition did not carry over to
another;
the
games
were
completely independent of each other.
fte champion of a regular-season
format competition was determined
by best overall record with no head-tohead championship game, while the
fte European football national
leagues operated a balanced
regular season, with all teams
grouped in a single table and playing each other an equal number of
times. For most football leagues,
particularly in the larger countries,
each team played each other
exactly twiceonce at home and
once away. Points determined overall
For certain competitions, like the
UEFA
Champions
League,
qualification for the playoff rounds
was determined by results in group
play where the groups were decided
by a draw. fte draws were not equal.
Teams were assigned rankA
level, B level, C level, and D level,
and each group consisted of an A,
In Europe, a number of things
carried over from one season to
the next. Teams were promoted
and relegated between divi- sions
for the next season, and relegated
teams were penalized from being
able
to
win
the
overall
championship. Further, the top
clubs in the first division qualified
for the next years Europe-wide

When a season was over, and the


playoff champion determined, the
only impact that carried over to the
next season was the draft order
where clubs chose new players from
the colleges or junior clubs. Nothing
about the teams performance
carried over into the next season. In
the new season, the slate was clean.

Source: Adapted from Galvin, T.P. How to follow soccer in Europe. Retrieved from http://www.tompgalvin.com/features/soccer1.htm.

34

Case Researcft Journal Volume 35 Issue 3 Summer 2015

appendix 3: finanCial statement terminology


football industry

for tHe

Income Statement Sections


Income
Match Day RevenuesRevenue derived from gate receipts, including
season tickets, memberships, and corporate hospitality buyers. fte
better the team was performing, the more likely the club would receive
revenue from this source as better performance related to higher match
attendance.
Broadcasting RevenuesRevenue derived from domestic and
international competi- tions. Broadcast revenue was distributed to the
clubs by the organization broadcasting club matches. In Spain, clubs
marketed and dealt directly with broadcast brokers individually, therefore
the revenue stream between clubs differed vastly. Because broad- casting
delivered both a revenue stream and exposure to a club, it was an
important component to success.
Commercial RevenuesRevenue derived from sponsorships and
merchandising. Clubs with well-established brands and a strong history
were typically more able to garner sponsorships and commercial income.

Extraordinary Income
Income from Player SalesRevenues from transfer fees in selling
players. Clubs hoped to increase the value of their players over time as
they developed in skill, to sell for more than their amortized value.

Expenses
StafWage expenses, including any bonuses granted from winning
competitions. Player salaries had been trending upward due to teams
competing to recruit top talent.
Player AmortizationCosts incurred on buying new players. Due to the
high trans- fer fees incurred in acquiring new players, football teams
frequently listed players as intangible assets on team balance sheets.
ftese assets could be depreciated over the life of the contract, as a
players value was believed to be at zero on the end of contract as they
might leave for no penalty.
Other Operating ExpensesMarketing and miscellaneous costs
associated with com- mercial activities (related to the delivery on media
and commercial sponsorship contracts), exhibition tours, match
operations (catering and security), professional fees, etc. Specific
marketing expenses include: advertising, costs to agents for identifying sponsors, market research, production costs for sponsorship
items, and public relations.

Balance Sheet Sections


Fixed Assets

Intangible AssetsConsist of player rights and brand equity. When a


club purchased player acquisition rights from other teams, the cost was
not immediately included in the income statement. Instead, the club
capitalized player value as a straight-line
The Branding of Club Atltico de Madrid: Local or Global?
35

intangible asset and amortized it over the length of the player contract.
ftis category usually included signing bonuses and player renewals as well.
Tangible AssetsMade up mainly of stadiums, other sports facilities,
museums, halls, shops with items for sale, television rights and collection
agencies, interest income, and interest received in advance of sponsorship
contracts.

Current Assets
InventoryIdle stock of physical goods that contain economic value and
held in vari- ous forms by a club.
Accounts ReceivableMoney owed by clients/customers to the club;
essentially cash not yet received. Includes player loans to other clubs.
Other Liquid AssetsMiscellaneous liquid assets.
CashCash on hand and in checking and savings accounts.

Liabilities
Shareholder EquityIncludes subscribed capital, paid-in capital, reserves,
and net income for the fiscal year.
Long-Term DebtIncludes debt to long-term creditors, deferred taxes, and
other mis- cellaneous long-term debt.
Short-Term DebtIncludes unpaid wages, accounts payable, and other
miscellaneous short-term debt.

36

Case Researcft Journal Volume 35 Issue 3 Summer 2015

appendix 4: benCHmarking Clubs 2007/2008 season


Atltico de Madrid
Main Sponsor/Uniform Sponsor

Kia/Nike

Manchester United

Real Madrid

Arsenal

AIG/Nike

bwin/Adidas

Emirates/Nike

Audi, Coca-Cola, Mahou

O2, LG, EDF Energy,


Sport,
EA Sports, EBEL,
Lucozade
Cook, Paddypower, BT

Other Sponsors
CocaThis
document
is
autho
d for use
only
Utomo
Sarjono
Putro in
2016.

Kyocera, Hugo Boss, PAF,


Air Asia, Audi, Betfred,
Cola, La Caixa, Viajes El Corte Kumho
Tires, Hestiun,
Budweiser,
Ingles, Banesto, Mahou, Mundo Malaysia, ViaGogo, XFM
Deportiv
o
Domestic League Champs
9
16
Champions League Champs

30

13

Income Statement Figures ( million)


INCOME
Match Day
Broadcasting
Commercial
The
EXPENSES
Brandi Supplies
ng
Personnel
Club Other (includes Marketing)
Atltic Amortization
o de OPERATING PROFIT
MadridNET PROFIT

: Local
Balance Sheet Figures ( million)
or
Global?FIXED ASSETS
CURRENT ASSETS
CASH
TOTAL ASSETS
SHAREHOLDERS EQUITY
LONG-TERM DEBT
RESERVES
SHORT-TERM DEBT
TOTAL LIABILITIES + EQUITY

74.6
24.0
28.5
22.1
121.0
5.3
65.9
14.5
35.4
46.5
0.283

324.8
128.2
115.7
80.9
242.8
68.6
152.9
11.0
89.4
82.0
26.3

365.
8
101.
0
135.
8
129.
0
282.
8
15.6
167.
1
3.7
82.1
83.0
51.0

264.4
119.5
88.8
56.1
207.4
19.0
128.0
58.9
42.1
57.0
32.5

453.5
80.9
3.2
537.6
23.3
282.1
52.2
229.0
586.6

978.9
345.9
62.8
1,387.
7
545.9
656.6
93.6
91.6
1,387.
7

530.
5
207.
8
0.8
739.
2
141.
1
231.
5
35.3
331.
3
739.
2

638.7
297.4
117.8
1,053.
9
167.2
391.8
33.7
430.7
1,023.
5

21.9
0.35
6.9
0.11

1.4
3.46
2.3
0.06

3.7
0.68
1.4
0.30

4.2
0.98
3.0
0.23

Financial Ratios
Debt/Equity
Current Ratio
Debt/Revenue
ROI

3
7

Sources: Compiled from various sources, including: Football Money League by Deloitte Sports Business Group (2009,2008); Club Atltico de Madrid (2009); Saludas, J.M.G. (2009)

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or
th
e
e
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