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Sports brands

The Economist ($) reports on Real Madrid's attempt to create "a brand:"

Real's managers studied how Disney had marketed the film, The Lion King. Their key insight was that selling tickets to the movie was not the main source of revenue; the big money lay in spin-offs and merchandise. Buying a team full of galacticos (superstars) was meant to make Real the leading brand in world football, creating new revenue, from sponsorship to shirt sales. The goal was to overtake Manchester United, Mr Beckham's former employer, which became the richest club in world soccer thanks not least to pioneering the idea of turning its team into a media brand. (United recently hired a former Disney executive, Andy Anson, as its commercial director.)

Real's strategy has largely worked. ...Real's commercial revenues now exceed ticket sales and revenue from broadcasting. HBS reports that "marketing revenue was expected to rise from €39m in 2000-01 to €83m in 2003-04."

Yet there may be a small flaw in Real's strategy. Footballers—unlike the cartoon characters of "Lion King"—are human beings, with all the frailty which that implies. For the first time in years, in 2004 Real failed to win any major trophies. And in the current European football championship, the brand value of many of its stars has taken a dive.

It's also worth noting that Beckham's 35m Euro transfer fee cuts rather deeply into the marketing revenue, not to mention his superstar wages.

Competition among sportsmen is quite different, thankfully, than competition among actors and cartoon characters. I hope it stays that way, despite the efforts of the Real Madrids of the world.

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