BRAND OF REAL MADRID

Brand

It was under Florentino Pérez's presidency (2000-2006) that Real Madrid started harbouring its current ambition of becoming the world's richest professional football club.[65] The club ceded part of its training grounds to the city of Madrid in 2001 and sold the rest to four corporations: Repsol YPF, Mutua Automovilística de Madrid, Sacyr Vallehermoso and OHL. The sale wiped out its debts, paving the way for the club to buy the world's most expensive players such as Zinédine Zidane, Luís Figo, Ronaldo and David Beckham. The city had rezoned the training grounds for development, a move which in turn increased their value, and then bought the site.[21] Although there is no evidence thereto, the critics allege that the city overpaid for the property to help with the club's finance.[66]

The sale of the training ground for office buildings cleared Real Madrid's debts of €270m and enabled the club to embark upon an unprecedented spending spree which brought big-name players to the club. Moreover, the money gained was spent on a state-of-the-art training complex on the city's outskirts.[67]

After the 2004–05 season, Real Madrid ended Manchester United's eight-year reign as the biggest earners in world football. Real's income to the year ending 30 June 2005 jumped 17 per cent to €275.7m (£190m).[68]

Though Pérez's policy resulted in increased financial success based on the exploitation of the club's high marketing potential around the world, especially in Asia, it came under increasing criticism for being focused too much on marketing the Real Madrid brand and not enough on the performances of the team.

In January 2007, Real Madrid paid their debts of €224 million and fell to second spot behind Manchester United. However, they reached the top again two months later after completing an image rights deal with Adidas worth 762 million. Manchester United's debt was €872 million in 2007, down from €1.25 billion in 2005.[69]

In September 2007, Real Madrid was considered the most valuable football brand in Europe by BBDO,[70] and is ranked as the second most valuable club in football with a value of €951 mil (£640 million / $1.285 billion) as of May 2008, only beaten by Manchester United with a value of 1.8 billion euros (£906 million)[71][71]

A study at Harvard University reached the conclusion that Real Madrid "is one of the 20 most important brand names and the only one in which its executives, the players, are well-known. We have some spectacular figures in regard to worldwide support of the club. There are an estimated 287 million people worldwide who follow Real Madrid."