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Real Madrid-Barça: Whose Strategy Is Better?

Kase, Kimio; Gómez López-Egea, Sandalio; Urrutia de Hoyos, Ignacio; Opazo, Magdalena; Martí, C.

 

Publisher: CSBM - Center for Sport Business Management

Original document: Real Madrid CF - FC Barcelona: Business strategy vs. sports strategy, 2000-2006

Year: 2006

Language: English

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In the globally popular sport of soccer, both Real Madrid CF and FC Barcelona are football legends. No other Spanish clubs even come close to their number of fans, match attendance or revenues. Real Madrid been proclaimed the "richest club in the world," while FC Barcelona has the most members. Both organizations are among the few soccer clubs that have retained their status as clubs; most others have become public limited companies. In just three years, and despite financial difficulties, FC Barcelona has managed to end the soccer supremacy of Real Madrid CF. For the last several years, the Madrid team, known as the "galactics," has boasted more soccer superstars than any other team in living memory. Convinced that the recent history of these two teams offers rich opportunities for research, the Center for Sport Business Management (CSBM) at IESE has prepared the study "Real Madrid CF-FC Barcelona: Análisis de las estrategias económica y deportiva del período 2000-2006" ("Real Madrid CF-FC Barcelona: Analysis of Business and Sports Strategy During the Period 2000-2006"). Professors Kimio Kase, Sandalio Gómez and Ignacio Urrutia and researchers Magdalena Opazo and Carlos Martí divide their analysis into two time periods and address both sports and business management issues. To analyze the two clubs' sports strategies, the researchers focus on variables such as team directors, managers and coaches, team composition (signing policy), player participation and sporting results.
Sport managers
The first period runs from 2000 to 2003, when Florentino Pérez was at the helm of Real Madrid and Joan Gaspart led Barcelona. While FC Barcelona's financial position - its balance sheet - was precarious, it showed healthy bottom-line growth on its income statement. Real Madrid displayed a clear business orientation, which enabled it to balance its accounts (thanks to the sale of its city center training ground) and get out of the red. Yet, Barça's financial vulnerability and Real Madrid's financial strength do not influence the mood of the clubs' members: Barça fans are clearly more satisfied. This fact highlights that financial success is not the be-all and end-all for a soccer club. It also proves that, in the short run, a club can succeed on the field regardless of whether or not it succeeds as a business. All the same, the authors point out, a club's survival and its ability to compete in the long run depend on effective business management. For Real Madrid, 2000 was the year Florentino Pérez became president. Sports management, strictly speaking, was in the hands of Jorge Valdano (sports director), Emilio Butragueño (assistant) and Vicente del Bosque (coach). The period from 2000-2003 was marked both by stability - del Bosque remained in the post for three seasons - and success, with two "La Liga" titles and one Champions League. During the second period (2003-2006), still under Florentino Pérez, the situation changed at Real Madrid and there were frequent changes in the coaching and management staff. Emilio Butragueño became vice president and Emilio Butragueño took on the role of general manager, and was then succeeded by Arrigo Sachi and Benito Floro. Turnover was high among the coaches, too: del Bosque, Queiroz, Camacho, García Remón, Luxemburgo and López Caro. This instability was accompanied by a string of defeats on the pitch. Meanwhile, at FC Barcelona, 2000 welcomed Joan Gaspart as president. This first period saw constant changes in the coach (first Serra Ferrer, then Carlos Rexachand and Louis Van Gaal) and setbacks for the team. Some very expensive signings left Barça as one of the most heavily indebted clubs in the Spanish league, and eventually led to Gaspart's resignation. During the second period, Joan Laporta led FC Barcelona. On the sports management front, things were remarkably stable. Laporta hired the coach Frank Rijkaard who has managed to stay in the post ever since and who has so far earned two "La Liga" titles and one Champions League. Looking back, management instability in both clubs has been associated with a dearth of sporting success, and vice versa. Team composition
Regarding team composition, the authors see a basic division between star players, intermediate or regular players, and youth team graduates. In both periods Real Madrid showed a clear predilection for star players. The idea was that the stars would be backed by up-and-coming players from the club's junior program, in a system dubbed "Zidanes and Pavones" (roughly, "Geniuses and Juniors"). This strategy meant cutting out the middle group, which had been the team's backbone. In the first period, Pérez signed Figo, Zidane and Ronaldo, and reduced the number of ordinary players from 15 to 10. Youth team graduates made up the rest. As noted previously, this strategy produced good results in this first period. It continued in the second period, with the signing of Beckham and Owen. What was immediately clear, however, was that the new faces were a response to media interest rather than sporting necessity, since the new players occupied positions that were already well covered. The problems started when not all the stars could play. The team's average age increased and the more intermediate players left. The junior players had little impact: Their numbers increased but not the time they spent on the pitch. There was no consistency between team composition and the use to which the team was put. If we compare the age, scoring record and time spent on the pitch per season of the star players on the two teams, the dangers of the Real Madrid system become apparent. Real Madrid set out to hire soccer superstars, players so well established that they tended to push up the team's average age. As these stars got older, their playing time and goal scoring decreased. However, since they are world-famous, they played many international games. Such high-intensity sporting activity translated into injuries and general attrition. FC Barcelona took a different strategy. It emphasized intermediate and junior players - not superstars. In fact, during the 2003-2004 season, players who had come up through the junior program were in the majority. The number of star players remained unchanged throughout the 2000-2005 period. Play time data show that this system allowed the younger players to develop, and it got the best out of the intermediate and star players, who were still in the early stages of their career and hungry for fame and victory. The authors conclude that FC Barcelona achieved a good fit between sports strategy and team line-up. During the first period, Barça's star players were older than the average. The time they spent on the pitch decreased each season, as did the number of goals they scored. Starting in 2003, however, there was a gradual renewal. The average age of the top players fell, resulting in more player participation and more goals. The conclusion is clear: The strategy of hiring established soccer stars involves the risk of an aging team and over-reliance on players who are in the twilight of their career. A balanced team and timely replacement of star players would seem a more promising path to sporting success.

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