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October 4, 2013

What happens when money does not buy (enough) titles?

Cristiano Ronaldo and Arda Turan

Cristiano Ronaldo and Arda Turán. (C) LauraHale [CC-BY-SA-3.0

In the last year the football order in the Spanish capital, Madrid, has been turned upside down. For the first time in years Atlético de Madrid has defeated twice in a row Real Madrid at the Bernabéu stadium. And one of the victories was on the Spanish Cup (Copa del Rey) final, where the ‘Colchoneros’ of Atlético came from one goal behind to lift the trophy with an emphatic 2-1 win over their city rivals. Not only that, but Atlético is winning titles whilst Real Madrid is licking its wounds and witnessing how their arch-rival FC Barcelona are crowned as European champions three times. Admittedly, Real Madrid under Jose Mourinho have won a League, a Cup and a Spanish Super Cup. But it all seems too little for a club that has broken twice in less than five year the record of the most expensive football transfer with Cristiano Ronaldo and Gareth Bale.

The arrival of former player Diego Pablo Simeone to Atlético de Madrid has given a new sense of pride to the team, the club and the fans. ‘We play finals to win’, stated recently the Argentinian manager. A very different mental setting for a club that used to be known for its predisposition to bad luck and to shoot itself on the foot. Atléticos are now winners, whilst the supporters of Real Madrid seem to be left with no clear direction. Some in Madrid blame the club’s chairman, Florentino Pérez. Others, specially the sport press, blame José Mourinho, despite his success in stopping Pep Guardiola’s Barça and restoring Real Madrid to winning ways. There are even those who accuse the players, and specially the club and national team’s captain Iker Casillas, one of the heroes of the 2010 World Cup final with his vital saves over Arjen Robben.

If one is to believe the well-known Stefan Szymanski’s soccernomics model, money brings success in football. In other words, the clubs that spend most in transfer and player wages are more likely to win titles. This does not seem to hold at the moment for Real Madrid, though. It is perhaps just a matter of perceptions, for Real Madrid has still achieved some silverware in the last few years, but it does not seem to be commensurable with the club’s expenditure in players. The irony, however, is that whilst new trophies are hard to come in Real Madrid’s cabinet, the club is a money making machine. Indeed, commercial income has been at a record high for the last three seasons and Real Madrid tops Deloitte Football Money League. That is to say, despite not winning as much as they used to, Real Madrid are still a formidable brand and the richest club in the world.

This prompts some interesting questions. The club’s chairman, Florentino Pérez is known to be a commercially savvy businessman. He has repeatedly stated that bringing in football megastars is part of his economic strategy for the club. He has even claimed that signing Zidane, Cristiano Ronaldo or Gareth Bale is cheap for the club, as the commercial revenue far exceed the astronomic transfer fees and wages he has to pay. Real Madrid seems to be reaching a point where it is more successful financially than on the pitch. And the question is, how long can Real Madrid sustain this strategy? Is it possible to survive without winning titles or, at least, without winning as many titles as Real Madrid used to?

The economic success of the club is evident. Real Madrid is a global brand. Some could even point out that Real Madrid is now a franchise NBA-style, where economic profit is more important than on the field success. Using Sean Hamil’s words, has Real Madrid become a profit-maximiser rather than a winnig-maximiser?

One would like to think that Florentino Pérez’s strategy is to make big signings to win titles. However, he does not seem to be excessively unhappy with the current state of the club. The fans, on the other hand, are far less enthusiastic. They want to see their team winning on the pitch and are not really worried about the books. Yet, Real Madrid keeps attracting around 80,000 spectators to the Bernabéu week in week out. Again, it seems as if Real Madrid may be relaying on a new type of fan, as some football sociologists have suggested. Is this sustainable in the long term? Will Atlético keep beating Real Madrid repeatedly? Colchoneros, of course, are enjoying the moment. And rightly so.

Post by Borja García in the category : Competitions, Governance, Posts - No Comment

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