Real Madrid Sponsors Cheer the Team’s Record Spending Spree
Aug. 6 (Bloomberg) -- Nine-time European soccer champion Real Madrid’s unprecedented spending spree may improve its on- field performance. Its commercial partners say they’ll be winners too.
Real has spent about 250 million euros ($360 million) this off-season on the likes of world player of the year Cristiano Ronaldo, Brazil’s Kaka and Xabi Alonso, the Spain midfielder who joined this week. The outlay kept the team in the spotlight with the media and fans, with almost 80,000 attending the Santiago Bernabeu stadium to watch Ronaldo complete his move in July.
“Every partner, every sponsor will find really great benefits about being associated with such a team,” Marc Michel- Amadry, president of Swiss watchmaker Ebel, said in an interview. “Through this new team we’ll get so much visibility compared even to the previous one, which was a very prestigious team.”
Ebel, which bills itself as the official luxury watchmaker to Real Madrid, signed a sponsorship deal with the team in October 2008, before Florentino Perez returned as club president and began the current recruitment drive. Michel-Amadry didn’t disclose financial details of Ebel’s partnership with Real.
In June, Herbert Hainer, chief executive officer of Adidas AG, said its longstanding deal to produce Real’s famous white shirts would lead to new opportunities for the world’s second- largest sports-goods maker.
“With Cristiano Ronaldo and Kaka you have world-famous players,” Hainer told reporters. “This opens a lot of alternatives for us as well to build a commercial business around these two players and, of course, a successful team.”
Richest Team
Perez, who returned in June, borrowed from Spanish banks to fund his player acquisitions. He says the investments are calculated because marquee signings will bring in greater commercial revenue as well as help Real dethrone archrival Barcelona, which completed a sweep of titles last season.
Accountant Deloitte LLP ranks Real the richest team in Europe, with sales of 365.8 million euros in 2007-08. Club sponsors also include bookmaker Bwin Interactive Entertainment AG, German carmaker Audi AG and beermaker Grupo Mahou San Miguel.
Perez’s strategy may not be all plain sailing, some say.
With the global economy still struggling to revive itself from the worst crisis since World War II, the club’s ambition to recoup its outlay through increased marketing income is “ambitious,” said Adrian Ford, commercial director at English Premier League team Arsenal.
‘Different Approach’
By comparison with Perez, Arsenal’s spending on players is conservative, with coach Arsene Wenger preferring lesser-known names and young talent from the team’s academy.
“Real Madrid has taken an approach, we have a different approach,” Ford said in an interview. “Football is a global game and it’s a growing business. We are all trying to establish our credentials.”
A call to Real Madrid seeking comment went unanswered.
The Spanish team failed to claim a trophy last season and hasn’t made the quarterfinals of the Champions League for the past five seasons. The focus needs to be on the field, Ford added.
“You don’t want star players to bring more revenues in, you want star players to help you win things,” he said. “Certainly in other parts of the world which are perhaps less mature than the U.K., star players can help your supporter base, but this can be very fickle. We are trying to build something that is lasting.”
-----------------
now show me the money