MVC (Most Valuable Club)

As the season is coming to an end for lots of leagues/sports and we move to that clickbait festival called “mercato“, it’s time for the football brand rankings to come out and determine where each club stands. These brand rankings can help the team executives to make up for a poor campaign in the pitch – and sometimes the other way around.

It’s funny how these rankings generate a diversified set of reactions in the industry, including:

  • Questioning the methodology (specially if their club is not properly positioned)
  • Sharing the results everywhere without questioning the methodology (if their club is well positioned)
  • Sharing the results only internally while questioning the methodology (again – if their club is not properly positioned)

No worries, we understand them all — been there and done that. 🙂

Some of those reports use basically the financial performance data to build their brand rankings – others combine that data with a really diverse set of metrics such as the social media performance or the sports performance to end up stating which club or brand is more valuable.

Four reports this week

This week four of these reports have been published:

Leaving behind the subjectivity of some of these assessments, here are some key conclusions combining all of them:

  • All the reports reward Real Madrid as the most valuable brand – with their strong financial position, even during Covid times, being key to that achievement.
  • FC Barcelona losing ground in the brand space – exactly for the same reason as Real Madrid, but the other way around. The club keeps a strong position in the Innovation and Digital Transformation space (self promo warning: we were highly involved in making that happen).
  • All the Premier League “Big 6“ consolidated in the Top 10, with Man City going up and Man United going down but keeping strong (more on that later). Significant growth by Man City and Liverpool in the Brand Finance report.
  • Juventus and PSG doing a good job on brand, with significant growths in the Forbes report.

But beyond those pretty obvious observations, here are some additional thoughts on the matter.

First – Brand value is incredibly hard to measure

Measuring the financial performance of a club comparing apples to apples is already challenging sometimes, now imagine measuring the value of a brand. That’s a tough one.

How can you properly measure the impact of organizations with a global or at least international footprint, with a strong and vociferous social media fanbase, daily presence in the traditional media, strong geo-cultural link with its community/city/region/country, a set of really powerful brand assets or ambassadors (the players) or a diversified business, each with its own dynamics?

Those who focus too much on the financials are missing key elements on why a brand matters and its impact on the culture/society. Those who combine that data with other metrics are only partially capturing that impact. The folks at 2Playbook have done a great job putting together data and insights from diverse sources, with 45% of their ranking values being independent of the club’s financial performance. Still, the picture is not complete.

Also, we are missing a ranking that better covers the Fan, from a quantitative and qualitative standpoint: engagement, attachment, behaviour, real following, etc. No financial data involved. The social media rankings we have today are clearly falling short on covering the real brand-fan relation.

So for clubs to not get too crazy about these rankings, the best approach is identifying 2-3 key brand performance metrics and focus on moving the needle on those – not for the sake of looking good on the rankings but to really have an impact as a brand that generates business and revenue.

Second – A brand takes a lot of time to build, and a lot of time to be destroyed

The Man United example is really remarkable. With 2017 being the last time they won a major trophy they are now on their longest drought in four decades – haven’t won the Champions League in the last 10 years and it’s been 9 years since their latest Premier League. Besides the club’s poor performance on the pitch, they have lacked global superstars, as Cristiano’s impact this year is still not properly measured in these reports.

But they are still there, keeping a remarkable third position in the Forbes report (they were 3rd already in 2019’s edition) and a 5th position in the Brand Finance report (from the 3rd the previous year). So it looks like the commercial job they have been consistently doing in the last 15-20 years really secured them a strong global position. Regardless of what happens on the pitch.

How long could they sustain these results without a good sports performance? Or have we finally reached that point where these huge global brands have a cultural status that goes far beyond the pitch? That sweet spot would give them immense possibilities for business development outside the traditional sources.

Third – Football brands are not the biggest in the world of sports

The top teams from the most global sport by far are not the most valuable – based on the financial criteria of the Forbes ranking. None of the top football teams make it to the top 5.

The 32 NFL teams have an average value of $3,48B, while the average of the top 20 football teams is $2,53B, very close to the 32 NBA franchises ($2,48B).

Top football teams’ brands are stronger globally and they generate more revenue than most of these brands (Dallas Cowboys is expected to surpass $1B in 2022, a number FC Barcelona reached already right before the pandemic), but their financials are stronger overall and they operate under strict league policies.

What would American teams have achieved if they were really strong in a global sport such as soccer?

Or where the European clubs would have been if they could transform the reach of football and their brand power into real business? Why aren’t they doing that?

There has not been a sustained and consistent vision of brand building and direct-to-fan business development, as hiring and sustaining a group of top players became more expensive every year and drained the club’s resources.

So maybe the solution is to build a separate operation for the teams to manage brand & business separated from the sports operation? We’ll discuss that in more detail on our next newsletter.

It shouldn’t be inconceivable that the top clubs make it to the big leagues of the brand value rankings: those from Forbes or Interbrand identifying the 100 most valuable brands, no matter the industry. Or are we going to settle for the “local“ sports brand rankings?


Thanks for reading.

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