How soccer clubs build global empires

Story highlights

  • Football clubs have gone from fiercely parochial outposts to cosmopolitan global brands
  • Commercial growth and diversity rivals Silicon Valley's finest
  • Fusing sporting identity and commercial brand is a delicate balance

(CNN)European soccer stadia have traditionally served as provincial fortresses, where home supporters would gather on a match day to unleash hell at the invading hordes. From Chelsea's Stamford Bridge to Galatasaray's Ali Sami Yen, outsiders learned to expect hostility and no little intimidation.

But major broadcasting deals in the early 1990s secured a cash bonanza and international exposure that set clubs on a path away from their fiercely parochial roots, toward becoming cosmopolitan companies for global audiences.
Deloitte estimates the European football industry to be worth around $29 billion, after three straight years of record growth in all the top five leagues. Leading clubs have built international empires so rapidly and successfully they would be celebrated in Silicon Valley.
    Increasingly, profits are flowing through commercial revenue streams rather than traditional match-day receipts, as clubs build and diversify their brands.
    Commercial revenue accounted for 27% of Manchester United's £157 million ($240 million) turnover in 2005. The figure this year is 50% of £395 million ($605 million), including through dozens of partnerships around the world that cover banking, transport, and communications.
    The transformation has created challenges as well as windfalls for clubs, as they seek to transition diehard supporters into acquisitive consumers, and leverage their sporting identities into powerful, universal brands.

    Arsenal

    Brand Value: $703 million (Brand Finance) Revenue: $487 million (Forbes)
    Caution and consistency have marked the North London club's approach to marketing.
    "The starting point was to define the values of the club and what we stood for," says chief commercial officer Vinai Venkatesham.
    "We conducted an extensive research project involving the fan base and people connected with the club to confirm our values. From that day forward we made sure those values were central to everything we did."
    The research boiled down to three foundations: class, unity and forward thinking.
    "We want to build pride among our fans by acting with class, with everyone together, and always moving forward," says Venkatesham. "Every partner we sign is singing off the same hymn sheet."
    Arsenal now has millions of fans around the world and it has been forced to adapt to their needs. Unlike a typical company serving such a large client base, the club employs just hundreds rather than thousands of staff, and has focused on building communications capacity.
    "The size of digital and social media teams has grown exponentially as the importance of those channels to communicate with the international fan base has grown," says Venkatesham. "The mantra at Arsenal is to try to engage with fans globally but connect personally."
    The message is tailored for diff