Soccer Inc. is among Italy’s top ten industries, with total turnover in excess of € 4 billion. Football champions are as popular as Hollywood actors in Italy, and their image is avidly sought by advertisers. Leading teams are household names, and not only to soccer fans. TV audiences seem to have never enough of soccer, thereby making the game an obvious marketing medium to reach large numbers of consumers.
Large investments and sponsorships have put soccer brands in people’s minds, so business theory has started pondering on the peculiarities of soccer brands and the solutions to increase their market value. The potential of soccer brands has powerfully emerged in recent years, since some football clubs started doing lease-back operations to put their accounts back in the black. This has generated additional financial resources and enabled valuation of the brands of various soccer teams.
These operations, unthinkable until a few years ago, underline the importance of intangible assets and immaterial goods in the economy of the new century. Belonging, status, and differentiation have taken the place of use value in motivating better-off consumers.
A football team’s market share is linked to the actions of two categories of individuals: fans going to the stadium and participating in the life of the club, and sympathizers who care only occasionally about the team’s fortunes. The former group shows enduring, life-long fidelity to the team’s brand. Unlike any other market, where the customer of a brand is potentially open to change, a fan gives his or her unconditional and perpetual allegiance to a team. On the other hand, the latter group of supporters is more easily swayed by the acquisition of an international ace or success in a major international tournament. Paradoxically, it is toward this segment that professional clubs orient most of their efforts. We can only list here the case of the Japanese footballer who has hired by an Italian team to gain additional exposure and attract sponsors in Asian markets.
Fans and sympathizers generate cash flows for brand owners via different sources of revenue: the box office, TV rights, merchandising, and sponsorships. It is in these latter two forms of revenue that opportunities for growth and profitability lie. Other revenues could come by a fuller exploitation of stadium facilities. In the days when there are no sports competitions, the top British and Spanish teams, which own their arenas, offer events to the public that are able to spread the name of the brand and valorize precious facilities. In Italy, stadiums are conversely city property, so such activities are inevitably limited.
Over the last few years, it has often been said that business success is crucially determined by endowments in intangibles: professional soccer clubs confirm the validity of such proposition.
by Fabrizio Redaelli,
Business Administration and Control Division, SDA Bocconi School of Management, and
Alessandro Costacurta,
Assistant Coach of AC Milan football team