An independent ranking system for European football clubs

Purpose

“Knowing your destination is half the journey”.
– An old proverb

This proposal has been prepared in year 2011 with the interest of finding commercial suitability of the usage of the independent ranking system of European football clubs for.
During the research on branding of European football clubs, author found that there is no brand equity model specific to football clubs and hence decided to create a ranking system based on a model which is fair, independent and more importantly uses measurable criteria for brand values of European football clubs.

Commercially, it may also open an opportunity for TV channels, football news websites and football magazines for the introduction of an independent ranking system that can gain popularity and attract more fans. For example: if it is used on football news websites like sky football or football365, it can benefit by getting a sponsor for the ranking system. Once the page has more viewers, the host can get more advertising revenue from the sponsor or
banner ads.

It can also be a source of information for brand evaluator, branding consultants and marketers of football and other sports clubs who are seeking measurable criteria for fair brand valuation.

Introduction

“Soccer is the biggest thing that’s happened in creation. It’s bigger than any ‘ism’
you can name.”
– Alan Brown (1)

The football continues to be a dominant among all the games, ruling more than a billion of hearts around the world. It is indeed a medium of socialising and fun among football fans. Along with other parts of the world, the game is also widely being played across Europe with tremendous passion and that’s the reason why many of the European clubs ruling the game and established themselves as global brands. Finding brand value or equity is always a matter of debate due to the lack of fair measurement criteria of intangible assets. Some of the previous researches talk
about brand equity models but none specifies how to measure the attributes that contribute to brand value and there is no perfect fit for football clubs. To fill this gap and to give a contribution to the research in the area of brand value, the author created BrandRanker, a model based on certain measurable criteria for brand value of football clubs. The model is the base of the fair and transparent ranking system that uses systematic methodology and analysis of best 15 European football clubs in order to rank them according to their brand values. In particular, the method, the model and the ranking system can be trusted and hopefully it will draw the attentions of professionals in the sports marketing field especially football. The ranking system does not attempt to provide the monetary value for any European football club.

Branding of the football club

“Everyone has preferred brands, but very few brands created devoted fans”.
– Kotler (2)

In the past, football clubs used very little brand power by underutilizing facilities like grounds, little marketing to fans and poorly exploiting products sales and thus got little opportunities to extend their competitiveness. However, since 1980s and 1990s clubs started paying more attention to their marketing activities such as recruiting marketing staff, improving relationship with fans, promoting ticket sales, exploring successful merchandise strategy and extending its membership. Compared to other brands, the football club has advantages of brand loyalty, brand longevity and lower marketing spending (3). In the recent years, the commodification process of football mainly driven by market power, historic value, and consumer popularity has led many of Europe’s biggest clubs to establish
themselves as strong global super brands (4).

One of the important aspects for a club to establish as a brand is the regional identity and many clubs seem to have learnt from the success of FC Barcelona which is deeply connected to Cataluña and Barcelona. Similarly, in 2005 FC Manchester City launched the ‘Our City’ branding campaign with the blend of themes like locality, authenticity, community, coolness and Manchester in order to foster the loyalty of local supporters which is in contrast with a
placeless FC Manchester United (5). Real Madrid, Chelsea, Liverpool, Bayern Munich and AC Milan are few other successful clubs based on their regional identity.

It is a fact that due to growing commercial power of players, clubs and supporters have increased their interest in star football players like Beckham, Ronaldinho, Cristiano Ronaldo and Messi who enjoy their celebrity and cultural icon status. These players have capabilities to increase the club’s brand image, drive revenue flow in terms of higher merchandise sales and attract much larger stadium attendances; for example, Beckham’s £24.5 million transfer
in 2003 from Manchester United to Real Madrid exemplified the club’s transformation and global growth which resulted by worldwide coverage and financial impact of the transfer (6).

Successful clubs have realized the branding power and started extensive strategic efforts in order to leverage the international growth beyond their local markets and this was the main reason for launching a subsidiary Manchester United International in 1998 to develop business in Asia, Middle-East and United States (6). A global brand can unlock the perception and preferences about superiority and quality among global consumers that is already being exhibited by some established global clubs like FC Barcelona, Manchester United and Real Madrid (7). It is important to note that a strong club brand can capitalize on match-day gate receipts, merchandising, TV rights and sponsorship (major revenue streams; see Figure-1) and achieve long-term revenue growth.

football club’s major revenue streams
Top clubs’ brand strength is underpinned by history and tradition of the clubs, the largest & loyal fan base, on-pitch performance, and revenue generated during various football leagues. Branding helps a club achieving higher commercial revenue and also helps them establish a globally recognized identity (8). It can be understood that the brand value is an important asset of a football club. Often, emotional attachment with fans has been sacrificed by a club for short-term revenue gain; however a club can capitalise on customer loyalty and build its brand value (9).

The Ranking System

Brand valuation of football clubs by different evaluators is debatable and lacks the clarity and fairness which can be considered as the identified gap especially for European football clubs. This gives a birth to a ranking system with an aim to provide fair, independent and transparent system for European football clubs based on BrandRanker model that uses measurable criteria for brand value. Once participating clubs have been identified, all the data for various criteria like revenue, performance and supporters have been collected then rules have been applied to calculate BrandRanker Points (BRP) and a ranking has been created. The below Figure-2 illustrates the process of developing the ranking system.

  • BrandRanker: the model
    • Branding highly depends on the success of a club while success depends on its performance, and when a club is doing well on the field, it tends to grow its supports around the world. By keeping this simple philosophy in mind, BrandRanker, the model of a point based ranking system (see Figure-3) has been created. Three main elements of brand equity: on-pitch performance, revenue and worldwide loyal supporters, constitute a reliable, independent and fair ranking system for European football clubs that can be trusted to judge their brand values.

BrandRanker - the model of point based ranking system

  • Rules
    • Once all the data have been collected for participating clubs, the BRP can be awarded based
      on certain rule for each criterion (i.e. revenue, performance and worldwide supporters). For example according to the rule for revenue, a qualifying club gets 0.20 BRP for every £10 million of revenue generated during a specific period of time. In the same manner BRP for on-pitch performance and worldwide fans will be awarded for the total BRP calculation.
  • Participating clubs
    • As per the detailed research, finally 15 top European clubs (see Figure-4) have been
      selected based on their performance in various European leagues and revenue generated in
      the last couple of years.

Participating clubs for the ranking system

  • Results
    • Finally, after combining the BRPs from all brand value measurements, the list of Top-10
      European clubs has emerged at the end of rigorous and complex analysis. The Top-10
      European clubs based on their brand values have been showcased in Figure-5.

TOP-10 European football clubs based on their brand values

  •  Conclusion
    • It is very important to keep in mind that this ranking system is fair and developed using measurable criteria for brand value so it is transparent. It can generate a curiosity among fans because once released, it can be updated throughout the year as the season progresses.
    • There is a unique opportunity to attract the large number (millions) of football lovers by providing an independent ranking system for European football clubs on news websites, TV, magazines or newspapers. Once it attracts large number of audiences then there will be potential for future revenue streams based on advertising. Though it has a limitation of not providing monetary value for a football club, the model, the method and the system can be applied to other sports clubs for creating the ranking system based on brand value.

References:

  1. Buzzle.com ‘famous football quotes and sayings‘: http://www.buzzle.com/articles/famous-football-quotes-and-sayings.html.
  2. Kotler P. ‘FAQs on marketing‘, 2007.
  3. Howard S. and Sayce R. ‘Fact sheet 11 – Branding, sponsorship and commerce in football‘, 2002.
  4. Holt M. ‘UEFA, Governance, and the Control of Club Competition in European Football’, 2009.
  5. Edensor T. and Millington S. ‘this is our city: branding football and local embeddedness‘, 2008.
  6. Quelch J. et al. ‘Real Madrid Club de Fútbol‘, 2007.
  7. Steenkamp J., Batra R. and Alden D. ‘How perceived brand globalness creates brand value?‘, 2003.
  8. Deloitte ‘the untouchables: Football money league 2011‘, http://www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/Industries/Sports%20Business%20Group/UK_SBG_DFML2011.pdf
  9. McGraw D. ‘Big league troubles, US news and world report‘, 1998.

Disclaimer:

This proposal has been prepared for readers in order to understand the commercial suitability of the independent ranking system for European football clubs developed by Mr. Divyesh Amipara (hereby referred as the ‘author’ and copyright ‘owner’). The information furnished in this proposal is in all respects confidential in nature. The reader should understand the confidentiality of the information provided in this proposal; therefore the reader must not disclose it anywhere in the public domain (i.e. Website, TV, radio, advertisement, newspaper, mobile, in store etc.) or use it for personal or commercial purpose without the express written permission of Mr. Divyesh Amipara.

The author is not responsible for any loss or damage incurred personally or commercially by using the information in this proposal; hence it requires proper consultation with him prior to personal or commercial use of the ranking system and/or model described therein.

 

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About the Author: Divyesh

Not an economist - An expert who will know tomorrow why that which he predicted yesterday didn't happen today!

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