Main Menu

Brand Finance Football 50 report

Real Madrid most powerful club brand

Sergio Ramos

Real Madrid’s Sergio Ramos lifts the European Champions League Cup (SNS Group)

Champions League history makers Real Madrid have scored another victory over rivals Barcelona by becoming the world’s most powerful football club brand.

Zinedine Zidane’s side won a record 12th Champions League with victory over Juventus and in the process replaced Barca at the top of the ‘Football 50’ table published annually by valuation and strategy consultancy experts Brand Finance.

However, while being football’s most powerful brand, Real’s brand value still trails Manchester United by a considerable margin. United, despite finishing a disappointing sixth in the English Premier League, is the most valuable brand in football, worth $1.733 billion to Real’s $1.419bn.

The company creates a ‘Brand Strength Index’ (BSI) score out of 100 by assessing the brand’s power/strength based on metrics such as stadium capacity, squad size and value, social media presence, on-pitch performance, fan satisfaction, fair-play rating, stadium utilisation and revenue.

This is used to determine what proportion of a business’ revenue is contributed by the brand, which is projected into perpetuity and discounted to determine the brand’s value. Real’s Brand Strength Index score is up from 94.6 to 96.1, edging ahead of Barcelona on 95.4.

The Brand Finance Football 50 report is the first of any kind to take into account the full sporting results of the 2016/17 season.

It says United’s success is partly the result of an enduring halo effect from the good times under Sir Alex Ferguson. However, the most crucial ingredient has been the club’s commercial nous and ability to convert its success into lucrative deals across dozens of industry sectors and national territories.

In contrast, while Real has blockbuster deals such as its reported billion euro agreement with Adidas, it has not leveraged its brand equity to the same extent as United, failing to pursue the same range of partnerships.

Real could perform significantly better in growth markets outside Europe too. In some, such as the Middle East, Real is popular, yet Brand Finance research into the vast and therefore critical Chinese market demonstrates that Real has a lot of work to do; it lags behind not just United but also Bayern Munich in popularity.

David Haigh, CEO of London-based Brand Finance, said: “Real must now pay as careful attention to its off-pitch strategy as it does to its on-pitch performance.”

The study shows that English Premier League clubs continue to lead the world when it comes to commercialising their brands. Six of the top ten most valuable football brands are English, with London rivals Chelsea and Tottenham recording some of the biggest gains this year.

Chelsea stand to gain significantly through a reported £900 million, 15 year deal with Nike as well as from a near 50% increase to the capacity of Stamford Bridge. Chelsea’s brand value is up 61% to $1.248 billion

Tottenham is also expanding its home. The building of a 61,000-set new White Hart Lane coincides with the club’s brand value rising 58% on last year.

All Premier League teams continue to benefit from the vast revenues brought in by the latest broadcasting rights deal with Sky and BT.

_______________________________

Bournemouth more valuable than Inter Milan’

_______________________________

The relatively equitable split is particularly helpful to smaller clubs and helps to explain how a club such as Bournemouth (which joined the Premier League just two years ago and comes from a town of just 180,000 inhabitants) controls a more valuable brand than much longer established European top tier clubs such as Olympique Lyonnais, Inter Milan, and AS Roma.

The costs of missing out on Premier League status are clear too. Another season in the Championship for Aston Villa and relegation for Sunderland see both drop out of this year’s list.

Newcastle United’s promotion has established the Magpies as the fastest growing brand with a value up 92% to $247 million.

No Scottish clubs figure in the top 50, with treble winners Celtic standing in approximately 60th place, with a brand value of around $95 million.

Rivals Rangers are within the top 100 with a brand value that is approximately one-third that of the Parkhead outfit.

Bayern Munich has stayed level in 5th. The Bundesliga title has increasingly come to seem Bayern’s by right. The club is so dominant locally that glory can really only come from the international stage, so a failure to reach the Champions League semi-finals could mean 2017 is interpreted as a rather mediocre season.

Though this year’s on-pitch performance might possibly be seen as underwhelming, Bayern is making great strides off the pitch to enhance the value of its brand. The club is trying to make up for financial differences with European rivals by investing in China. Its new Shanghai office is the first of any European football club to open in mainland China. The club has also launched two football schools in Qingdao and Shenzhen this year, which has increased the brand’s familiarity among young players, as has its intensive investment in social media.

Bayern’s hard work is paying off. Brand Finance’s research shows that the club has a very strong presence in China, while the Bundesliga (generally less widely broadcast than La Liga or even Serie A) is China’s most watched foreign competition after the Premier League.

Zenit St Petersburg is Russia’s only entry in the top 50. Its €168 million commercial revenues (led by headline sponsor Gazprom) are the primary driver of brand value, putting it significantly ahead of the two major Moscow clubs CSKA and Spartak.

The soon to open Krestovsky Stadium should help Zenit pull further ahead of the pack; its 68,000 capacity is more than 50% larger than any other club arena, allowing Zenit to leverage its brand through enhanced match-day revenue. The stadium will be a key venue for next year’s FIFA World Cup.

Share The News Tweet about this on TwitterShare on FacebookShare on Google+Email this to someoneShare on LinkedIn





Leave a Reply

Your email address will not be published. Required fields are marked as *

*