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Case Study FC Barcelona - More Than Just A Club
Case Study FC Barcelona - More Than Just A Club
Case Study
‘FC Barcelona: More than just a club’
Valdano’s words were on the front page of every Spanish sports newspaper
and were also highlighted in the sports sections of all the major general
newspapers in Spain. The international media were also echoing Valdano’s
opinions. Unzueta knew for sure that this was going to be a hectic day, with
journalists calling to get the expected reactions from FC Barcelona
representatives. He also knew that it would not be long before different
stakeholders jumped into the fray, expressing their views on the issue. But
Unzueta also thought it was probably a good excuse to revise FC Barcelona’s
global brand strategy.
This case was written for ESADE Business School by Professors Josep Franch and Jordi
Montaña and MSc student Andreu Turró, with assistance from MSc student Guillermo Muñoz.
The authors would like to thank Lander Unzueta and Patricia Plasencia, FC Barcelona’s Chief
Marketing Officer and Marketing Manager respectively, for the information and assistance
provided.
The authors developed this case for class discussion rather than to illustrate either effective or
ineffective handling of the situation. The case, instructor’s manual, and synopsis were
anonymously peer-reviewed and accepted by the North American Case Research Association
(NACRA) for its annual meeting in October 2010, held in Gatlinburg, Tennessee. All rights are
reserved to the authors and NACRA.
© 2010 by Josep Franch, Jordi Montaña and Andreu Turró.
Contact person: Josep Franch, ESADE, Av. Pedralbes 60-62, 08034 Barcelona, Spain,
(34) 93 280 6162, josep.franch@esade.edu.
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Case Study
‘FC Barcelona: More than just a club’
FC Barcelona History
In 1908, Gamper had to save the club from disappearing. Shortly afterwards it
was decided the club should have its own differentiated crest. A contest was
organised and the design by Carles Comamala was chosen as the winner. This
design was still the one used currently, a bowl shaped crest with the city’s
symbols such as Saint George’s Cross and the Catalan red and yellow flag in
the upper part with the FC Barcelona’s blue and red stripes below. In those
days, football was becoming an increasingly popular sport in Barcelona and in
Spain as well as in many other European countries. In the first decade of the
20th century, FC Barcelona was already one of the most popular and well known
organisations in Catalonia.2 This led the club to build a new stadium in 1922,
called ‘Les Corts’: it had a capacity for 22,000 spectators though was later
successively expanded to hold up to 48,000.
The 1920s represented the club's first golden era as the team successfully won
many different titles, amongst them the first edition of the Spanish National
League in 1929. However, some problems also arose at that time. In 1925,
Spain was ruled by the dictator, Primo de Rivera. In one football match at ‘Les
Corts’ stadium, spectators whistled while the Spanish Royal march3 was played,
leading authorities to suspend all FC Barcelona activities for 6 months. FC
Barcelona was already becoming not just a symbol in the football field, but also
1
FC Barcelona stands for Fútbol Club Barcelona (Football Club Barcelona).
2
Catalonia is a region in northeast Spain, and Barcelona is its capital.
3
Spanish national anthem.
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Case Study
‘FC Barcelona: More than just a club’
a social, political and cultural symbol for the city of Barcelona and for the whole
region of Catalonia as well.
The 30s were years of major crises for the club. The number of members was
gradually decreasing, and the team did not achieve almost any significant
victories. Furthermore, at the beginning of the Spanish Civil War in 1936, the
President of FC Barcelona, Josep Sunyol, was arrested and shot by General
Franco’s fascist troops. Also during the Spanish Civil War, while FC Barcelona
was playing some exhibition matches in Mexico and the United States, several
players decided to seek asylum and not return to Spain.
In the 70s the club continued to increase its number of members, it signed the
Dutch player, Johan Cruyff, and it won the Spanish league in 1974 after beating
archrival Real Madrid 0-5 in Madrid. The club celebrated its 75th anniversary
with 69,556 members4, making it the largest club in the world. In 1988, Johan
Cruyff became the team’s coach, leading the team during one of the most
successful periods in its history, winning four Spanish leagues in a row (from
1991 to 1994) and the club’s first European Cup (later known as ‘Champions
League’), the most important title a European team can win, with a team that
became known as the ‘Dream Team’.
After a period of four years without any significant victory, Joan Laporta was
elected president in 2003. When Laporta took over as FC Barcelona President
in 2003, the club was not performing well, and its results were disappointing
(the club had not won any significant cup in the last four years and had ended
6th in the Spanish League that year). As a result, attendance at the stadium had
been decreasing. Furthermore, the club’s financial results did not look very
4
As will later be explained, FC Barcelona was owned exclusively by its members.
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Case Study
‘FC Barcelona: More than just a club’
The club adopted some measures to find new uses for the stadium, creating
VIP lounges and promoting attendance at FC Barcelona matches through travel
agencies and tour operators; TV rights were also renegotiated, the number of
club members was increased, Barça TV was launched, strategic partnerships
were redefined, the fees charged for international tours were increased, and
web traffic was tripled. Furthermore, an important investment was made in good
players, not only to improve the club’s performance but also to increase its
marketing and merchandising potential, in a strategy that was nicknamed ‘the
virtuous circle’.
Laporta led the FC Barcelona through another successful period, winning two
consecutive Spanish leagues in 2005 and 2006, the year in which FC Barcelona
won its second Champions League.
FC Barcelona in 2009
2009 was proving to be the most successful year in the club’s history. Led by
coach Josep Guardiola, a former player, FC Barcelona succeeded in becoming
the first Spanish team to win the treble: the Spanish League, the Spanish Cup
and the UEFA7 Champions League in the same season. A few days before, the
team had also won the Spanish Super Cup, and it had yet to play the final of the
UEFA Super Cup in the coming days. The last competition of the year was the
FIFA8 Club World Cup, scheduled for December. If Barcelona managed to win
these last two cups, it would become the first football team ever to win six
competitions in a single year.
5
In 2009, the average exchange rate was $1 = € 0.7338; in 2003, this was $1 = € 0.8840.
6
The G-14 was formed in 2000 and composed originally of the 14 major European football clubs
though later expanded to 18: AC Milan, Inter Milan and Juventus FC (Italy); AFC Ajax and PSV
Eindhoven (the Netherlands); Borussia Dortmund, FC Bayern München and Bayer Leverkussen
(Germany); FC Porto (Portugal); FC Barcelona, Real Madrid and Valencia CF (Spain); Arsenal
FC, Liverpool FC and Manchester United FC (England); and Olympique Marseille, Paris Saint-
Germain and Olympic Lyonnais (France).
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Union of European Football Associations, the administrative and controlling body for European
football headquartered in Nyon (Switzerland), was made up of 53 national associations.
8
Fédération Internationale de Football Association, the international football governing body
headquartered in Zurich (Switzerland), had 208 national member associations.
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Case Study
‘FC Barcelona: More than just a club’
In Spain, FC Barcelona was one of only three Spanish football clubs to have
never been relegated from the Spanish league's premiere division, having won
19 Spanish league titles (La Liga), a record 25 Spanish Cups (Copa del Rey9),
8 Spanish Super Cups, 2 League Cups and 4 Eva Duarte Cups. In Europe, FC
Barcelona was the only European football club to have qualified to play
continental competitions every season since the latter’s inception in 1955,
winning 3 UEFA Champions League titles, a record 4 UEFA Cup Winners’ Cup,
a record 3 Inter-Cities Fair Cups (the forerunner to the UEFA Europa League)
and 2 UEFA Super Cups. Over its history, world-class football players such as
Kubala, Cruyff, Maradona, Romario, Rivaldo and Ronaldinho had all played for
FC Barcelona.
In 2009, FC Barcelona was the biggest sports club in the world in terms of the
number of teams, sections and members. Apart from football, FC Barcelona
had four other professional sections (basketball, handball, roller hockey and
indoor football), eight non-professional sections (wheelchair basketball,
athletics, rugby, baseball, volleyball, field hockey, ice hockey and ice dance),
and one associated section (women’s volleyball). Every section had different
teams in different categories.
In 2009, the club reached its highest revenues ever (€384.8 million), making FC
Barcelona second in the ranking of European football club revenues (see
Exhibits 3 and 4, ‘Top European Football Club Revenues’ and ‘FC Barcelona
Financial Highlights’, respectively). The club also reached a record number of
members, 163,763 (see Exhibit 5, ‘FC Barcelona Number of Members’).
FC Barcelona was owned exclusively by its members. Since the new Statutes
approved by the General Assembly in August 2009, elections were held every
six years in order to elect the President and a Board of Directors to manage the
club. The Board of Directors could have a maximum of four Vice Presidents,
normally in charge of different areas, such as: Sports, Social, Marketing and
Media, and Operations. All positions on the Board of Directors were honorary
and without salaries.
9
King’s Cup.
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Case Study
‘FC Barcelona: More than just a club’
Over the last few years, the football industry had grown faster in terms of
revenue than any other industry, between 10% and 25% depending on the
country, evolving from a local and cultural passion to a global business,
becoming the most popular sport in the world and growing faster than any other
sport. According to Reuters, in May 2009, the UEFA Champions League final
between FC Barcelona and Manchester United had a TV audience of 109
million, surpassing for first time ever that of the Super Bowl, with 106 million
viewers. The main European markets were England, Germany, France, Italy
and Spain, whereas the main Latin American markets were Argentina, Brazil
and Mexico. These markets were all considered mature, with around 75% of
Latin Americans and 50% of Europeans interested in football.
A number of different factors had triggered this change. The first was a drastic
transformation in the traditional football business model. At the beginning of the
80s, as much as 90% of the total revenues for many clubs came from
admissions tickets. Attending a football match at a stadium was almost the only
way to support a team, so it was basically a local event, and the market was
naturally divided between national clubs. But this started to change with the
privatisation of public televisions as different private channels began to compete
for broadcasting rights. As a consequence, the income generated by TV rights
increased progressively to the point that, in the 90s, admissions tickets
accounted for only 50% of total revenues for many clubs, with television rights
representing the other half.
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Case Study
‘FC Barcelona: More than just a club’
With the arrival of the digital era and the possibility of watching matches via
satellite television and the internet, the number of football fans started to grow
all over the world. Watching live football matches attracted more viewers than
any other sport in the world, making football a global sport with global clubs,
global players and global brands. Football became an entertainment industry in
its own right, one that no longer operated locally but had become a global
business. FIFA estimated that 240 million people regularly played football
around the globe, including 20 million women.
A second major change was the ‘Bosman Law’ enacted in Europe in 1996,
named after a Belgian football player who fought for the free circulation of
European Union football players within the European Union, allowing member
country nationals to play in any EU club without restrictions and outlawing the
payment of transfer fees for players whose contracts had expired.
The third main change was related to the increased revenue stemming from
marketing and merchandising of officially licensed products (see Exhibit 6,
‘Revenue Sources for Top European Football Clubs’). Many clubs created their
own official stores in addition to the traditional sports stores in places like Tokyo
or Beijing. Manchester United was probably one of the first football clubs to take
advantage of these new sources of income, with record breaking contracts for
TV rights and sponsorships. The best and most popular players were in high
demand, and the transfer price and the salaries to recruit the best players
started to soar expensive (see Exhibit 7, ‘Highest Transfer Fees for Football
Players’). Football clubs signed the most popular players in an attempt to
increase media attention and popularity (see Exhibits 8 and 9, ‘Media Value for
the Main Football Payers’ and ‘Media Value for the Main Football Clubs’,
respectively).
Football clubs started to compete to win not only matches and titles, but also
global market share, the number of fans and revenue (see Exhibit 10,
‘Supporter Base for Football Clubs in Europe’). In an industry where only 10%
of European football clubs accounted for 67% of industry revenue and 70% of
the expenditures on players and coaches, entering new markets seemed the
only way to increase size in order to remain competitive. Major European
football clubs dramatically increased their sales turnover (see Exhibit 11,
‘Revenue Growth of Selected European Clubs from 2000/2001 to 2008/2009’).
Unfortunately, the debt of several clubs also increased dramatically, forcing
many to privatise, being purchased by some millionaires or becoming publicly
listed companies.
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Case Study
‘FC Barcelona: More than just a club’
Real Madrid and Chelsea also took advantage of extraordinary resources from
unusual sources. For example, Florentino Pérez, President of Real Madrid
between 2001 and 2006 sold several parcels of land for a total of €480 million to
invest in football players who were also celebrities in order to increase the value
of the Real Madrid brand. A few years later, in summer 2009, Pérez was re-
elected President of Real Madrid and he spent €250 million in only a couple of
months to hire four new players (Cristiano Ronaldo, Kaká, Benzema and Xabi
Alonso). In 2003, Chelsea was acquired by Russian millionaire, Roman
Abramovich, who invested more than €360 million of his own fortune in less
than a year to create a team with very good players. These business models
were not considered to be very sustainable.
The main challenge for top European clubs was to expand their brands around
the world because without their international expansion and activities it was
impossible to have enough resources to compete with other European clubs.
Americans preferred other sports like baseball, basketball or American football
to football (called ‘soccer’ in the US). However, football was popular amongst
women and the most popular sport played by American boys and girls. The US
also remained an interesting market because there was a huge Latino
population for whom football was their favourite sport. The US was also the
home base of many multinational corporations, who were potential sponsors for
football clubs. Very recently, a Mexican team called Chivas bought a franchise
in the American football league, the Major League Soccer (MLS), calling the
team Chivas USA. A different issue would be whether Chivas supporters
considered Chivas USA as ‘the real Chivas’.
The popularity of football had reached the Asian markets a few years before.
Asian supporters were not really football experts but they loved the football
players, who were more important than the teams themselves. As a result,
loyalty for a club was not as strong as in traditional football countries. As
Uruguayan writer Eduardo Galeano once put it:
“In a life time, a man can change his spouse, political party or
religion, but not his football club.”
Although the American market was more developed for sports and the audience
levels were higher, Asian markets were larger and had more growth potential.
Many European football clubs had gone to Asia and continued to go there to
generate short-term revenue (unlike other sports organisations such as the NBA
which achieved success in Chinese markets with a long-term policy), building
basketball courts and promoting basketball. The final boost came with Yao
Ming, a Chinese basketball star competing in the NBA.
All top European football clubs were focusing on China in order to generate
audiences that could eventually attract sponsors. The Italian Football
Federation, for example, signed an agreement to play the final of the Italian
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Case Study
‘FC Barcelona: More than just a club’
One of the main pillars of FC Barcelona’s values was its social commitment.
During the years of Franco’s dictatorship when many Catalan institutions were
forbidden, FC Barcelona became a symbol of freedom, Catalan identity and
democracy, a kind of guarantor of democratic values. With the restoration of
democracy in Spain, some people believed that these values should probably
not have had the same strength they enjoyed in the past. However, FC
Barcelona maintained a strong Catalan identity and a flair for being different, of
being ‘more than just a club’. In the last few years, FC Barcelona also enacted
many socially responsible initiatives. The most famous one was the historic
2007 agreement signed with UNICEF, the United Nations agency in charge of
protecting children’s rights. This pioneering sponsorship agreement made FC
Barcelona the only club in the world paying €1.5 million a year to wear the
UNICEF logo on its shirts, compared to other top football clubs in Europe which
earned between €20 and €25 million per year to sport a commercial company’s
logo.
Another basic feature of FC Barcelona’s values was the desire for its teams to
play offensively and in an spectacular way. At FC Barcelona, football was
understood as entertainment for people. Therefore, it was not only important to
win – but to do so and play well – based on team spirit rather than individual
10
It is written in Catalan and translates into English as ‘More than just a club’.
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Case Study
‘FC Barcelona: More than just a club’
players, and preferably with a significant number of players who had come up
through the ranks of FC Barcelona junior teams.
The football industry had many unique qualities which made managing its
brands more challenging than in other industries. Like in many other football
clubs, the main challenge for the FC Barcelona brand was that its performance
was often closely related to the team’s results on the field. Actually, the football
team’s performance was the most important leverage for the FC Barcelona
brand’s growth: the more titles the team won, the more the brand increased its
value, image and awareness. Unfortunately, achieving continued and sustained
success in football was not always possible. Therefore, the marketing
department at a club like FC Barcelona had to promote the brand in order to
acquire and maintain value, if possible, regardless of the uncertainty of the
team’s results. Unzueta recalled:
“In the world of sports, one day you win and the next day you lose. It
is cyclical… Our role is to explain the brand values, what makes us
different from our competitors…”
Also, like other sports and unlike other industries, feelings mattered a great
deal. People in charge of managing any football club, and FC Barcelona was no
exception, had to be aware that they had a lot of supporters behind them with
strong feelings about their clubs.
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Case Study
‘FC Barcelona: More than just a club’
FC Barcelona had more than 120 licensing agreements, covering more than
2,000 different products using the FC Barcelona brand. One of Unzueta’s tasks
was to make sure that the brand was licensed for appropriate products. As
Unzueta put it:
“We cannot allow our image to be massively represented by the FC
Barcelona crest because this could potentially dilute our brand.
Licenses have to be based not only on the crest but also on other
themes… And we have to look for market niches with more added
value.”
Indeed, there were many other stakeholders inside the club, from football
players and their representatives to technical staff, club members, and the
Board of Directors. The individual interests of some of these stakeholders were
not necessarily aligned with the FC Barcelona interests. For instance, in 2006
the club started to negotiate with the online bookmaker betandwin.com to
sponsor the team’s shirt. When the media learned about these negotiations, a
huge controversy erupted, involving even politicians expressing their opinions
about this possible deal. Some stakeholders considered that a bookmaker was
neither morally appropriate nor aligned with the values of the club. Whether or
not these opinions were right, the negotiations were broken and betandwin.com
finally signed with FC Barcelona’s archrival Real Madrid.
Another big challenge Unzueta and his marketing team had to face was that,
even though FC Barcelona revenues were close to €400 million, the marketing
budget was very limited. It was thus forced to manage a brand with very strong
brand awareness but on a limited budget.
Unzueta was well aware that a major challenge for FC Barcelona was how to
expand globally, entering and pursuing growth in markets like North America or
Asia, with high growth potential but where football was not the most popular
sport. In addition, the main issue was how the FC Barcelona brand and its
values could be transferred to foreign markets.
11
Case Study
‘FC Barcelona: More than just a club’
12
Case Study
‘FC Barcelona: More than just a club’
1899 1910
Design by Carles Comamala
1949 2002
During the Franco regime, the club Redesign by Claret Serrahima
was forced to use the Spanish
version, Club de Fútbol Barcelona
Source: FC Barcelona
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‘FC Barcelona: More than just a club’
14
Case Study
‘FC Barcelona: More than just a club’
Source: FC Barcelona
15
Case Study
‘FC Barcelona: More than just a club’
Source: FC Barcelona
16
Case Study
‘FC Barcelona: More than just a club’
Note: Matchday revenues refer to ticket sales, including season tickets and
membership fees. Commercial revenues include sponsorship and merchandising
revenues.
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Case Study
‘FC Barcelona: More than just a club’
Note: FC Barcelona paid Inter Milan €48 million for Zlatan Ibrahimovic, plus the
transfer of Samuel Eto’o.
Source: Transfemarkt
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Case Study
‘FC Barcelona: More than just a club’
Source: Report on Media Value in Football (June 2009). Economics, Sport and
Intangibles (ESI) Research Group, University of Navarra (Spain), p. 3
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Case Study
‘FC Barcelona: More than just a club’
Source: Report on Media Value in Football (June 2009). Economics, Sport and
Intangibles (ESI) Research Group, University of Navarra (Spain), p. 5
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Case Study
‘FC Barcelona: More than just a club’
FC Barcelona 44.2
Chelsea FC 25.6
Liverpool FC 23.0
Arsenal FC 21.3
AC Milan 21.0
Juventus FC 17.5
Galatasaray SK 9.0
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Case Study
‘FC Barcelona: More than just a club’
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Case Study
‘FC Barcelona: More than just a club’
Football 16,374
Basketball 8,046
Tennis 4,056
Snooker 2,400
Badminton 1,515
Volleyball 916
776
Golf
Motorsports 644
X Games 485
Source: The Big League? The Business of Sport in China. A Report from the
Economist Intelligence Unit, p. 8, based on data from TNS Sport China 2009.
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Case Study
‘FC Barcelona: More than just a club’
Source: UEFA
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