Real Madrid have reportedly sold 345,000 James Rodriguez
replica jerseys since purchasing the Colombian striker from AS Monaco of France
last Tuesday.
Real’s newest number 10 was bought for a staggering $120
million, however the club’s jersey sales have allowed them to recuperate a
reported $35 million of the amount paid to Rodriguez’s former club, due to the amount
of “James” replica shirts sold in Spain and around the world.
The trend of signing the world’s most coveted and talented
players continues for the Spanish soccer giants, maintaining a model that has
seen them become the world’s most valuable sports team according to Forbes,
despite ample debt that in 2013 was estimated at $720 million.
Real Madrid’s debt is due in large part to the constant
expensive acquisition of top talent, however, it is also the foundation of
their brand and prestige.
Under the guidance of current club president Florentino
Perez, Real Madrid started a commercial and tactical strategy in 2000, built
around buying the most dominant players in the world. As the strategy was
openly publicized, the team earned the nickname ‘Los Galacticos’ (the Galactic
team) for their constant pursuit, and usual acquisition, of soccer’s
superstars.
When Perez initiated ‘Los Galacticos’, his main aim was not
to excel on the pitch, even though it was an expected side effect with such
supreme talent being assembled. In fact, ‘Los Blancos’ have often been
overshadowed since 2000 in terms of quality and competitive success by their
arch rivals Barcelona, a team who develop and promote from within, instilling a
consistent soccer philosophy from a young age at their legendary ‘La Masia’
soccer academy. With championships and glory a secondary objective, Perez
managed the club with one real endeavor - to enhance Real’s standing and
prominence as the richest and most prestigious sports team in the world.
Real Madrid has always been synonymous with Europe’s
sporting elite. They are Europe’s most decorated continental champions and have
possessed several storied dynasties where they ruled domestic and international
competitions throughout the last century. However Florentino Perez wanted to
separate them from the likes of Bayern Munich, Manchester United, and
especially fierce rivals Barcelona, as the world’s stand-alone soccer example.
If Forbes’ recent valuation is any measure, he succeeded.
Through their acute and aggressive acquisition of talent,
Perez has lifted Real to the status he envisioned. They have won several titles
and accolades since 2000, however more important to the bodies that fill their
board room, their marketability, brand, and commercial standing has risen to
become what all clubs in Europe and all over the world now strive for.
Over the last 14 years, Real Madrid have bought Luis Figo,
Zinedine Zidane, the Brazilian Ronaldo, David Beckham, Portugal’s Cristiano
Ronaldo, Welsh stalwart Gareth Bale, and most recently, Colombian wonder boy
James - all arguably at the pinnacle of their positions at the time of their
acquisitions. The assembly of the worlds most popular and talented players has
accumulated followers all over the world, converting them into fanatic Real
fans due to inevitable attraction of a constant ‘dream team’ stacked with
talent.
The ‘Galactic’ strategy strengthened Real Madrid’s brand at a
vulnerable time in the economics of sport and soccer. Their star power and
authority allowed them to establish a footprint in large markets such as East
Asia at time when globalization was galvanizing sports teams with resources
never before seen.
The Spanish giants have been able to fend off competition
from the heavily marketed, accessible, and economically strong English Premier
League, which experienced very fast growth, popularity, and vast resources due
to the emergence of satellite television available to mass audiences.
England’s Premier League was the first to make their product
available to a global audience, however no English club has been able to
overtake Real as soccer’s supreme economic force, due to the pure market power
they possess with their superstar brand, making their strategy feasible.
Real Madrid’s economic model is a tough one to sustain even
with their strong trends in revenue. The ‘Galacticos’ strategy forces them to
spend well over $100 million dollars a year on one player alone, only to
fulfill their operating procedure of obtaining the world’s best talent. Yet with every new player they purchase, their
market share and brand power increases.
In the James Rodriguez example, the sale of his emblazoned replica
jersey in Real’s iconic white kit in less than a week has already paid for
nearly 30% of the player’s acquisition fee, and that’s just in replica jersey
sales. The impact of his addition will
also have a resonating influence on Real’s revenue from television rights, gate
prices, and commercial sponsorship.
Zidane, Beckham, and both Ronaldos sold a lot of jerseys and
compelled the masses to consume the commodity that is Real Madrid.
Like the ‘Galacticos’ before him, a large part of Real’s
model is sustained through the commercial revenue that is garnered from its
illustrious group of players. Whether or
not Real Madrid receives the value for their investment in Rodriguez on the
pitch, his acquisition in terms of brand power and profit has already started
to pay dividends.
