Mertens 25621500 2021

"Winning Team Value Strategies of Professional
Football Clubs : A Resource-Based Approach"
Mertens, Guillaume
ABSTRACT
The football industry has fundamentally changed over the last decades. The appearance of professional
football clubs combining both objectives of sport performance and commercial targets has deeply
transformed the industry. The emergence of a Super League illustrates the point very well. The objective
of this thesis is to describe how a professional football club operates and to apply a resource-based
strategic framework and value chain model to identify for each key activity the essential resources and
capabilities required to support a sustainable competitive advantage. We introduce first the conceptual
model and the possible main resources and capabilities. We then use data for the top 125 UEFA clubs to
test some of these concepts statistically. We then conduct an in-depth analysis of four football clubs to gain
a more detailed and granular understanding of the resources and capabilities needed to be successful.
Both the statistical analysis and the case studies confirm the importance of the infrastructure of the club,
in particular its stadium both in terms of sport performance and support to commercial activities, as well as
key capabilities for selection and recruitment such as developing a network of partner clubs and scouting
skills, team value management which includes player trading skills, and the development of an integrated
and coherent business model. This last point means that the history, the location and the culture of the
club and its fans must be consistent with its way of selecting, developing and trading players, as well as
its playing style. It also ...
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Mertens, Guillaume. Winning Team Value Strategies of Professional Football Clubs : A Resource-Based
Approach. Louvain School of Management, Université catholique de Louvain, 2021. Prom. : Vas, Alain ;
Zintz, Thierry. http://hdl.handle.net/2078.1/thesis:31052
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Abstract
The football industry has fundamentally changed over the last decades. The appearance of
professional football clubs combining both objectives of sport performance and commercial
targets has deeply transformed the industry. The emergence of a Super League illustrates the
point very well. The objective of this thesis is to describe how a professional football club
operates and to apply a resource-based strategic framework and value chain model to identify
for each key activity the essential resources and capabilities required to support a sustainable
competitive advantage. We introduce first the conceptual model and the possible main
resources and capabilities. We then use data for the top 125 UEFA clubs to test some of these
concepts statistically. We then conduct an in-depth analysis of four football clubs to gain a more
detailed and granular understanding of the resources and capabilities needed to be successful.
Both the statistical analysis and the case studies confirm the importance of the infrastructure of
the club, in particular its stadium both in terms of sport performance and support to commercial
activities, as well as key capabilities for selection and recruitment such as developing a network
of partner clubs and scouting skills, team value management which includes player trading
skills, and the development of an integrated and coherent business model. This last point means
that the history, the location and the culture of the club and its fans must be consistent with its
way of selecting, developing and trading players, as well as its playing style. It also has to be
consistent and coherent with the development of the brand, the way to conduct the commercial
activities and the selection of its partners such as its sponsors.
Foreword
Je voudrais tout d’abord remercier le Professeur Alain Vas qui m’a notamment aidé à
développer le cadre d’analyse pour un sujet qui me tenait à cœur. Je voudrais également
adresser tous mes remerciements au Professeur Thierry Zintz pour ses encouragements et ses
recommandations tout au long de mon travail. Enfin, je voudrais exprimer ma reconnaissance
à toute ma famille et en particulier mes parents qui m’ont soutenu tout au long de mes études.
iii
Table of Contents
Introduction............................................................................................................................................. 1
Chapter 1: Theoretical Framework ......................................................................................................... 2
1.1. The evolution of the football industry and the emergence of the Super-League................... 2
1.2. Modelling a soccer club and its key value drivers ................................................................... 6
1.2.1. The model ........................................................................................................................ 6
1.2.2. Sources of Revenue ......................................................................................................... 7
1.2.3. Club ownership ................................................................................................................ 8
1.2.4. Organic vs acquisition of players ..................................................................................... 8
1.3. A strategic framework: Resource-based analysis and value chain management ................... 8
1.3.1. Conceptual framework .................................................................................................... 8
1.3.2. Applying the strategic framework to the soccer industry ............................................. 11
Chapter 2: Empirical Analysis ................................................................................................................ 17
2.1. Objective, methodology and data sources ................................................................................ 17
2.2. The football industry and its development over time ............................................................... 17
2.3. An analysis of football clubs revenues ...................................................................................... 18
2.4. A statistical analysis of value drivers ......................................................................................... 19
2.5. Sport performance, market value of the team and team value management ......................... 21
2.6. Classifying the top 125 clubs: a cluster analysis ........................................................................ 24
2.7. Some conclusions from the analysis and some open questions ............................................... 25
Chapter 3: Analysis of Some Selected Case Studies .............................................................................. 27
3.1. Introduction ............................................................................................................................... 27
3.2. Leicester..................................................................................................................................... 28
3.2.1 Presentation ........................................................................................................................ 28
3.2.2. Selection and Recruitment .................................................................................................. 28
3.2.3 Team Value Management .................................................................................................... 30
3.2.4. Sport Performance .............................................................................................................. 32
3.2.5. Image and Brand, Sponsoring, Merchandising and Services............................................... 32
3.2.6. Conclusion ........................................................................................................................... 32
3.3. Borussia Dortmund .................................................................................................................... 33
3.3.1. Presentation ....................................................................................................................... 33
3.3.2. Selection and Recruitment ................................................................................................. 35
3.3.3. Team Value Management .................................................................................................. 36
3.3.4. Sport Performance ............................................................................................................. 38
iv
3.3.5. Image and Brand................................................................................................................. 39

3.3.6. Sponsoring, Merchandising and Services ........................................................................... 40
3.3.7. Conclusion .......................................................................................................................... 43
3.4. Red Bull Group........................................................................................................................... 44
3.4.1. Presentation ....................................................................................................................... 44
3.4.5. Image and Brand................................................................................................................. 52
3.4.7. Conclusion .......................................................................................................................... 54
3.5. City Football Group.................................................................................................................... 55
3.5.1. Presentation ....................................................................................................................... 55
3.5.5. Image and Brand................................................................................................................. 66
3.5.7. Conclusion .......................................................................................................................... 69
3.6. Lessons from the case studies ................................................................................................... 71
Conclusion ............................................................................................................................................. 74
Appendix................................................................................................................................................ 80
Appendix chapter 1 : Detailed analysis and assessment of resources, capabilities and core
competencies .................................................................................................................................... 81
Appendix chapter 2 : Detailed statistical results ............................................................................... 96
Appendix chapter 3 : selected information of the clubs analyzed .................................................. 108
References ........................................................................................................................................... 114
v
Winning Team Value Strategies of

Professional Football Clubs :
A Resource-Based Approach
1
Introduction
There is a growing interest in the study and the strategic and economic analysis of the
professional football industry. The sector has undergone a deep change over the last 20 years
and numerous transformations have occurred. As a result, interesting questions can be
addressed thanks to a massive amount of data available.
In this regard, a typical strategic analysis would cover both the external and the internal
dimensions. Our thesis, however, will not cover the external environment. It will focus on the
internal analysis of how a football club operates and the key resources and capabilities that it
needs to develop to be successful. More specifically, we will be using a resource-based
approach to investigate this question. The purpose of this strategic framework is to identify the
resources (tangible and intangible assets) and the capabilities (skills) allowing an organization
to achieve a sustainable competitive advantage.
We first begin by introducing in chapter 1 some key characteristics of the football industry and
its evolution and key drivers over the last few years. We also develop a personal model of how
a football club operates and the drivers of its value. We then introduce briefly the resource-
based framework and apply it to a football club. We also adapt Porter’s value chain model to
identify the main activities and then discuss in detail the key associated resources and
capabilities.
In chapter 2, we begin to analyze empirically the various theoretical aspects identified in the
previous chapter using a database of the top 125 UEFA clubs that we have built from different
sources. This is essentially a statistical analysis whose purpose is to give an overall picture of
the industry and test some of the drivers introduced in chapter 1.
In chapter 3, we take a different approach to complement the statistical analysis by developing

in detail four case studies, the objective of which is to provide a deep dive and a much more
granular analysis of the resources and capabilities needed to succeed from a more practical
perspective.
Finally we conclude by bringing together the theoretical model with both the outcomes of the
empirical and the case studies. We discuss how and to which extent the theoretical ideas are
supported by the analysis and make suggestions for further research.
2
Chapter 1: Theoretical Framework
1.1. The evolution of the football industry and the emergence of the Super-
League
The soccer industry has grown at an increasing pace in recent years, helped by the globalization
phenomenon encountered by most businesses in the world. A major event that marked a change
in the dynamics of the industry and towards the professionalization of the sport was the Bosman
ruling. This decision rendered in 1995 by the Court of Justice of the European Union has
allowed a better mobility of players across European countries and thus an opening of the
transfer market. This lawsuit opposed the Belgian Football Federation to Jean-Marc Bosman, a
Belgian player affiliated to RFC Liège. At the end of his contract with his employer, Bosman
was offered a new contract with reduced salary conditions which he felt entitled to refuse
preferring to join another club, Dunkirk. RFC Liege demanded a transfer fee for this move from
his potential new employer. Bosman then decided to go to court. The plaintiff and his lawyers
claimed that this interfered with the workers' freedom of movement and freedom of association
while contradicting certain articles relating to the Treaty of Rome. Similar cases had already
resulted in sports-related rulings, but winning this trial had immense consequences on the
subsequent course of operations.
FIFA is the organization that governs the world of soccer on a large scale. However, it also
grants responsibilities to continental confederations, namely UEFA at the European level. This
association still delegates some of its duties to the national federations of each country. This
centralized organization of football thus gives rise to a complete monopoly which is hard to
challenge. In order to participate in the competitions organized by these bodies, it is required to
be affiliated to them and to comply with the rules laid down. In legal terms, however, the
European Commission agrees that it sees no obstacle to the formation of an alternative to these
dominant positions that would be controlled by a few top European clubs.
Partly as a result of the Bosman’s ruling, another notable trend has been the widening gap
between the European elite clubs and most other clubs around the world. This divide, which
has only become more significant in the financial realm, has become more pronounced in terms
of sport performance as well as these clubs have been able to attract the best players in the best
facilities. This meant that clubs further down the hierarchy had to employ more sophisticated
mechanisms to compete with the wealthiest clubs, focusing on developing a competitive
3
advantage in niche areas. These are specific areas of value creation which we discuss further
later in our analysis of the value chain of a football club and that we elaborate in the next
chapter.
We could not have found a better illustration to explain the divide between the clubs identified
as belonging to the elite group1 and the others than the recent events that have shaken the
football world. A document issued by the self-proclaimed elite of European soccer has been
delivered in April 2021 to UEFA, the body in charge of organizing club competitions across
the continent, announcing its signatories' intention to create a separate tournament. This closed
competition, operating under its own rules, would bring together its 15 founding clubs plus 5
clubs invited annually to qualify for it. This proposal committed the likes of AC Milan, Arsenal,
Atletico Madrid, Chelsea, Barcelona, Inter Milan, Juventus, Liverpool, Manchester City,
Manchester United, Real Madrid and Tottenham Hotspur while Bayern Munich, Borussia
Dortmund and Paris-Saint-Germain (PSG) were involved but without signing anything. There
are several different reasons behind the decision of the two German clubs and the French one
for refusing to join the others that we will explain in the following lines. Ownership models,
differ from country to country and it soon became apparent that the English, Spanish and Italian
leagues allowed more freedom for this type of maneuver than the German 50 + 1 model2.
Indeed, this announcement met with a strong protest from fans as well as from sponsors and
partners, which the German club-members and their voting rights would not have tolerated from
their managers. At a higher decisional level, business considerations endorsed by the German
Federation claimed “doubt over the long-term appeal of a closed league, worries about the
reduction in value of their domestic competition and unease over leaving the auspices of UEFA
to become a minority member in a Southern-European-Anglo-Saxon rogue organization”3. In
France, the calculation was more pragmatic, with the Qatari sovereign fund controlling PSG
strongly linked to their counterparts at Bein Media Group4, the official broadcaster of the UEFA
Champions League. The dispute also came from broadcasters who feel they have been cheated
by the potential turn of events. They believe that the amounts committed should be re-evaluated
if the proposed members of this Super League were to leave the existing competition, while
taking into consideration the lack of suspense induced by the loss of the race to European
1 The elite group that we are referring to is actually the Super League cluster that emerges from our cluster analysis presented in chapter 2.
2 We discuss later the details of the German 50 + 1 ownership model.
3
https://theathletic.com/2526238/2021/04/20/florentino-perez-the-real-madrid-president-and-driving-force-behind-the-european-super-
league/?article_source=search&search_query=explained%20%3A%20socio%20model accessed on 15/06/2021
4
https://www.beinmediagroup.com/the-group/ accessed on 15/06/2021
4
competitions. More opportunistically, this move allowed Nasser Al-Khelaifi5, President of

PSG, to replace Andrea Agnelli6, President of Juventus, as head of the European Club
Association7 (ECA). This association is an organization recognized by UEFA and FIFA8 that
promotes the interests of professional football clubs. It has 234 members spread across all 55
UEFA affiliated associations and is therefore intended to adopt a democratic governance
process. In particular, it has endorsed the Financial Fair Play project to build a more sustainable
business model for the football industry and has ensured that compensation is paid to clubs that
make their players available to national teams competing in FIFA competitions. As far as the
Super League is concerned, the establishment of this midweek event would have overshadowed
the UEFA Champions League and probably even sought to replace it. The announcement came
at a time when UEFA had agreed changes to its flagship competition designed to suit the big
clubs by giving them more games and more revenue. In concrete terms, “Europe’s leading clubs
wanted a far more substantial level of control over how the Champions League’s broadcast and
commercial deals are secured and marketed”9. The clubs concerned expressed a desire to
distance themselves from UEFA's monopoly and say they want to get closer to the consumption
habits of the younger generation. There is also a belief that being forced to play lower-level
games against smaller teams reduces their brand value and appeal, explaining why biggest
teams, with the best players, should stick together. Another motive is added to the equation
since the amount of €3.5 billion10 is put forward as being to be shared between the 15
stakeholders. The individual income would therefore be multiplied by 4 compared to the prize
money awarded to a Champions League winner. Those sums would support an even greater
development of the infrastructure and would especially help most of these clubs to reduce their
indebtedness. It seemed certain that JP Morgan, an American bank with which several
executives have good contacts, would be the guarantor of the project via debt financing.
However, UEFA is also aware that many of the less profitable teams owe their survival to the
money generated by the profitability of the existing competitions. As such, the founding clubs
promise to donate €10 billion as a gesture of solidarity towards these small clubs over 23 years.
It should also be noted that a large number of these clubs are under American ownership, with
5 https://www.transfermarkt.com/nasser-ghanim-al-khelaifi/profil/trainer/23714 accessed on 14/06/2021

6 https://www.transfermarkt.com/andrea-agnelli/profil/trainer/14032 accessed on 14/06/2021
7
https://www.ecaeurope.com/ accessed on 14/06/2021
8 https://www.fifa.com/ accessed on 15/06/2021
9 https://theathletic.com/2527261/2021/04/19/european-super-league-explained-the-contracts-plots-and-threats-that-shook-football-to-
its-core/?article_source=search&search_query=explained%20super%20l accessed on 15/06/2021

10 This is the estimated amount of revenues that would be generated by this Super League proposal.
https://theathletic.com/2527261/2021/04/19/european-super-league-explained-the-contracts-plots-and-threats-that-shook-football-to-
5
their directors trying to impose on the European sports culture a system that they know is
financially profitable, a closed franchise league. To cut a long story short, the shift to a League
of this type would render meaningless the domestic sport performance reflected in the final
rankings of the respective European championships. Therefore, this would still guarantee a
financial jackpot even if one of these clubs failed to qualify based on current criteria. The
situation of Tottenham is particularly interesting since it is considered commercially attractive
enough, thanks to its new ultra-modern stadium, branding benefits of a documentary produced
by Amazon Prime, remarkable performances in the UEFA Champions League, charismatic
figures at the club’s disposal, to be embedded among the most prestigious clubs in the world
despite a meager sporting achievement of two trophies in 20 years. The last results obtained by
the team will not be enough to secure a place in the competition next season either. Furthermore,
the certainty of pocketing the economic windfall associated with participation on the European
stage would further increase the club's value. In the same vein, “City’s positioning is
particularly ironic as the club have long complained that the majority of “super clubs” in Europe
have conspired to limit the club’s spending and squeeze them out of the established elite”11. The
implications for the dissident clubs could be far-reaching, as the sanctions range from an
exclusion from their national competitions to the exclusion of their players from their national
teams. The latter would be kept away from official competitions held by FIFA.
In conclusion the lure of gain generated by the upward revaluation of a transition to the Super
League can be easily explained. The pandemic context and its financial impact only triggered
a well-established intention. The protagonists were convinced of the benefits of this
breakthrough competition on revenues related to merchandising, sponsorship and services,
most visibly on broadcasting contracts. However they soon understood that their image and
brand had taken a hit due to the protest from all sides. Their statement argues that “for a number
of years, the Founding Clubs have had the objective of improving the quality and intensity of
existing European competitions throughout each season, and of creating a format for top clubs
and players to compete on a regular basis”12. The implications this would have on sport
performance remain however to be seen, as do the implications on their selection and
recruitment. Despite the assertion of those Super League clubs that "the pandemic has shown
that a strategic vision and a sustainable commercial approach are required to enhance value and
11 https://theathletic.com/2527261/2021/04/19/european-super-league-explained-the-contracts-plots-and-threats-that-shook-football-to-
12 https://www.skysports.com/football/news/12040/12279788/european-super-league-the-key-questions-what-is-it-who-is-involved-how-
likely accessed on 15/06/2021

6
support for the benefit of the entire European football pyramid."13, a further reflection should
be made regarding the long-term consequences that this could have on the supply networks.
The bottom of the pyramid, on which a substantial part of the Super League clubs’ sport
performance is based, could be weakened by a lack of income and visibility. The business
model of these clubs would become even more dependent on transfer fees from the big clubs
but the development of interesting players could be hindered.
1.2. Modelling a soccer club and its key value drivers
In this section, we describe the way a professional club typically operates while in the next
section we will introduce a more formal strategic framework to analyze the key value drivers
of a soccer club. As a first step, we must define what is the objective of a football club. We
will work on the assumption that like any other business the objective is to maximize the
enterprise value. In order to achieve this purpose, however, certain pillars should serve as
foundations for an efficient organization. These interconnected support activities will assist the
components of the value chain in their pursuit of value creation. Despite the plausible working
hypothesis that this statement constitutes for the larger soccer clubs, in particular when listed
on a stock exchange, the reflection must be extended to smaller clubs whose objectives may be
less financially oriented.
1.2.1. The model
Figure 1.1 introduces our model of a football club. Our starting point is the two key factors of
production i.e. labor and capital which serve as the basis to develop a number of key assets and
processes that ultimately impact the value of the club.
The most obvious ones are the tangible assets (the stadium, hosting facilities and training
infrastructure) even though intangible assets (access to social media, web sites,…) increasingly
play a central role. On top of that, the strategic location of a club is also an important element
in order to get access to a potential large fan base far beyond the immediate club surrounding.
13
https://www.skysports.com/football/news/12040/12279788/european-super-league-the-key-questions-what-is-it-who-is-
involved-how-likely accessed on 15/06/2021
7
One of the essential aspects of a football club encompasses what McKinsey14 calls team value
management which covers all activities to build the team and to keep renewing and improving
it. It covers the implemented procedures of recruiting, developing and educating the players,
with the right selection process, support and organization while providing the appropriate
infrastructure. Alongside the promotion of young local players, trading more mature players is
an essential activity among each club’s business plan and this involves acquiring and
developing the right resources and capabilities. This aspect which has become an essential
source of differentiation and ultimately success will be discussed in great details in what
follows. The aggregated measure of these activities is reflected in the (estimated) value of the
core team of players. We hypothesize that the market value of the team is a key driver of sport
performance but it can be argued that sport performance will in turn impact the market value of
the players. We will discuss this aspect in more detail later on in our thesis.
Furthermore, we also hypothesize that sport performance has a direct impact on the value of a
club that crystallizes in particular when the clubs trade players and generate gain (or losses) on
this activity. The performance also impacts the image and the notoriety of a club and ultimately
its brand value, another aspect we will investigate further in our thesis. Football clubs have
various sources of revenues (see figure 1.2.).
1.2.2. Sources of Revenue
The revenue breakdown is specific to each league as several factors such as audience, prestige
and branding of the different competitions are taken into account. However, the largest revenue
share comes undoubtedly from a combination of both broadcasting rights and commercial
activities i.e. merchandising. Transfer fees play an important role in balancing the books, which
is why we will investigate player trading in detail, while sponsorship agreements are also key.
Then, matchday spending under normal circumstances and occasional prize money gained from
adequate sport performance follow closely. Moreover, overall revenues generated are expected
to be impacted by the value of the brand. Finally, it is worth noticing that the soccer industry
operates in various markets: fans and end consumers, sport competition (national
championships and international tournaments), various segments of the market for players and
14 McKinsey & Company (2020)

8
finally the capital and the labor markets. This is an atypical environment that will require public
relations expertise as well as many other skills and competences.
1.2.3. Club ownership
Before continuing in a more in-depth analysis of the functioning of the soccer world, it seems
important to explain several of the possible ownership types in the industry. In most countries,
various types of ownership exist with very few constraints. Some clubs are privately owned by
local or international investors, some by their fans, and a few clubs are even listed on various
stock exchanges across Europe. Two specific types of ownership, however, deserve a more
detailed discussion : the German 50 + 1 model and the Spanish socio one. Boxes 1.1 and 1.2 in
Appendix 1 examine in detail these two interesting situations.
1.2.4. Organic vs acquisition of players
A specific very important decision that each club has to make is the trade-off between organic
development of young players which requires time, money and risks over a long period of time
but allows the development of players who have not cost anything or not much to the club and
the acquisition of much more mature players who can be plugged into the team but can represent
sometimes a really significant investment. We briefly conceptually discuss how to balance these
two aspects in an Appendix (see figure 1.3. for a graphical analysis of the problem and box 1.3.
for a more detailed discussion).
1.3. A strategic framework: Resource-based analysis and value chain

management
After laying the groundwork of the specificities linked to the football industry, it is now time
to specify the theory that will allow us to highlight its mechanisms.
1.3.1. Conceptual framework
A company developing a strategic analysis must consider both external and internal dimensions:
the external analysis looks at the market and the overall environment, the customers and the
competitive landscape while the internal analysis is a self-analysis of the company. There are
many aspects that can be covered in an internal analysis but the ultimate objective is to
9
understand what a company must achieve to be successful. A particularly useful approach is to

understand the resources and the capabilities that a company must develop to achieve a
competitive advantage supporting both its short and long term success and performance.
In this thesis our focus will be exclusively on these internal aspects and a specific approach
called the resource-based view will be used whose origin many scholars attribute to Edith
Penrose15 (see Rugman and Verbeke (2002) and Kor and Mahoney (2004) for a discussion of
her contribution) and which has been the subject to a large volume of research ever since (see
Barney (1991), Grant (1991), Conner and Prahalad (1996), Barney (2001), Acedo et al. (2006),
Barney and Wright (2011) and Vas (2020)). The approach begins with an analysis of the
resources and capabilities of the firms. Resources are assets the company has access to whether
tangible or very often intangible. The competencies combine the know-how of the companies,
the activities performed, with the resources. Some resources and capabilities are essential but
are easily accessible or copied by competitors. What matters most are the resources and
capabilities that are unique to a company. Prahalad and Hamel (1990) stress that a successful
company is a portfolio of what they call core competences defined as a collection of knowledge
to successfully coordinate diverse production skills and technologies. These unique and
specific resources, capabilities and their combination in order to create synergies can then be
used to develop sustainable competitive advantages and implement strategies that ultimately
support superior performance.
Identifying resources requires an analysis of all assets a company owns or has exclusive access
to. These include tangible resources such as land, buildings, equipment, etc. but also intangible
ones which are very often more difficult to copy such as technological knowledge, reputation,
image, human and organizational assets, … The identification of capabilities is more complex.
Different frameworks have been proposed to guide this process but for our analysis we have
followed the approach suggested by Ulrich and Smallwood (2004). They first make a
distinction between individual and organizational capabilities and also between social and
technical capabilities, defining thus a four-by-four matrix. To help identify the capabilities
most relevant to an organization, they propose a set of eleven categories that they consider
relevant to most organizations: talent recruitment and retention, speed, shared mind-set and
15 Penrose, E. (1959). The Theory of the Growth of the Firm. New York: John Wiley.
10
coherent brand identity, accountability, collaboration, learning, leadership, customer

connectivity, strategic unity, innovation and efficiency at managing costs. We will be using
this framework to guide us in our analysis of capabilities developed by successful football clubs.
As mentioned above, once resources and capabilities have been identified, it is key to assess if
each one can be or not a source of competitive advantage. We will use a model based on four
criteria, called VRIN (see for instance Vas (2020)) to help us assess their importance16. The
four criteria of the VRIN model are the followings:
• V: customer perceived value
• R: rare, few companies have access to it
• I: difficult to imitate by competitors
• N: non-substitutable, i.e. difficult to replace by another resource or competence.
For each resource and capability we will also try to consider its business impact also.
An additional element to keep in mind is that a club accumulates knowledge and experience
over time and therefore follows a learning curve that can make it better at acquiring, developing,
and integrating resources and capabilities progressively.
Figure 1.1 above presents a specific model of a football club and the possible drivers of
performance but for the identification of the resources and capabilities we will be using another
view of a company, the value chain model developed by Michael Porter17. The model considers
primary activities (inbound logistics, operations, outbound logistics, marketing and sales and
service) and support activities (firm infrastructure, human resources management, technology
development and procurement) as the key drivers of performance. The model will of course
have to be adapted to the specific characteristics of a soccer club, a topic which we address in
the next section. The identification of the resources and capabilities will be applied to the
various activities of the value chain.
Another important conceptual framework to keep in mind is the so-called stakeholder theory
which combines a market-oriented approach with more political considerations to examine the
behaviors adopted by company's executives towards its various stakeholders. In this regard,
16
We also make a choice by opting for the VRIN model rather than the slightly different VRIO model. In this alternative model, the “O”
stands for “Organization”.
17 Porter, M. E. (1985). Competitive Advantage : Creating and Sustaining Superior Performance. New-York: The Free Press.
11
Robert Edward Freeman suggests that “there are other parties involved, including governmental
bodies, political groups, trade associations, trade unions, communities, financiers, suppliers,
employees, and customers. Sometimes even competitors are counted as stakeholders—their
status being derived from their capacity to affect the firm and its other stakeholders”18.
Furthermore, Minello argues that “many times in a situation of adversity perception of the
manager becomes confused due to pressure from other stakeholders in the enterprise,
organizational performance will be affected and may cause an interruption in business”19. We
believe these are important ideas for a football club since as we will repeatedly see clubs interact
with a large number of different stakeholders.
This completes the description of the conceptual model we will apply to a football club in the
next section. Figure 1.4 provides a graphical summary of our approach.
1.3.2. Applying the strategic framework to the soccer industry
Porter's value chain will be significantly different in the football industry than in a variety of
other sectors. Figure 1.5. in Appendix 1 presents our tailoring of the model to a football club,
based on Vas (2020) adapted to a professional football club20. We identify five primary
activities an organization must perform and in which it must excel to gain a competitive
advantage, namely selection & recruitment, team value management, sport performance, image
& brand and sponsorship, merchandising & services.
• Selection and Recruitment is the activity to spot and attract high-potential players
featuring the relevant attributes and values to evolve with the club
• Team Value Management21 is the aggregated value creation associated with the
development of players under contract, integration of youth players into the senior team
and player trading excellence
18 Freeman, R.E. (2015). Stakeholder Theory. In Wiley Encyclopedia of Management (eds C.L. Cooper and ).
19 Bazanini, R., Ferreira, A. A., & Bazanini, H. L. (2014). Entrepreneurship in the Society of Spectacle: Soccer Management in a Globalized
World. Global Journal of Management and Business Research, 23-35.
20 Several partially overlapping applications of the Porter's value chain model to the case of a football club have been proposed.
See for instance https://facenovywofopus.modellervefiyatlar.com/value-chain-analysis-for-a-night-club-51121zl.html last consulted on
29/06 2021
See also http://vtdogwoodnflmarketingmarvel.blogspot.com/2014/12/using-porters-value-chain-for-nfl.html last consulted on 29/06/2021
12
• Sport Performance is the delivery of good sports results and is considered as a means to
an end: the production of sports results is a driver for the other commercial activities
and ultimately a possible source of value creation
• The development of the Image & Brand of the club is both impacted by the activities
above but also requires some specific resources and skills as we will see.
• Developing successful Sponsorship, Merchandising & Services is the final key activity
driving profitability and ultimately value creation.
As a result, football managers should assess each activity of the club’s value chain and choose
in which one they want to particularly excel and also sometimes which part of these activities
they may prefer to outsource.
Now that all elements have been introduced, we can apply the conceptual framework discussed
in the previous section to the specific case of a professional soccer club. Table 1.1 to 1.10
present the complete list of resources and capabilities identified for each primary activity (and
its associated support activities). Figure 1.6 explores in more details the interactions between
the infrastructure and in particular the stadium and the image and brand. Figure 1.7 to Figure
1.11, show the resources graphically by looking at their uniqueness (I, R, N in the VRIN model)
and their business impact (the V of the model and an estimate of their business importance).
Table 1.11 summarizes what we consider to be the critical resources and capabilities in our
opinion and we will now discuss them in some detail.
Selection & Recruitment :
This first step towards value creation is undoubtedly of paramount importance since this activity
will largely determine the success of all the following ones. It is not only a question of tapping
into the right markets but rather to explore those which are hardly exploited by the larger clubs,
depending on the respective positioning of each. In this respect, a consistent scouting process
must be established both in terms of resources and capabilities. The challenge is to gain a
competitive advantage in the supply of players to be developed thereafter. If some clubs decide
to focus on a more locally-oriented recruitment for reasons of shared values and identity, it has
become more and more difficult to ignore wider prospecting abroad. Given the limited staff
available to the prospecting cells, it has become imperative to develop a broad network with
the required reliable contacts. In summary, developing a network to identify players on a broad
13
geographical basis, including in some less prospected markets and developing the associated
skills to manage it and detect the most promising players is a key source of competitive
advantage.
Table 1.11 : Key Resources and Capabilities by Major Activity

Activity Resources Capabilities
Selection and recruitment • Develop a local and international • Building an integrated and
network of scouts and partners collaborative wide scouting
network with a consistent scouting
process : squad planning, creation
of scenarios, potential player
identification and filtering, scouting
(video, live and selection process,
recommend selected candidates)
Team Value Management • Investment or agreements with • Development of players under

partner clubs to get access to their contract
youth academy • Youth development
• Squad of mature and experienced • Excellence in player trading :
players perfect timing
• A broad pool of young promising
players to feed the main squad in
the future
Sport Performance • Access to a stadium with all • Develop, align and maintain a
necessary facilities for the fans vision and an identity : in terms of
and the players (Venue recruitment, style of play,… Key
Performance Rating) role played here by the coach
Image and Brand • Infrastructure - Stadium – Location • Create coherence between the
• Image & brand strength sporting and the commercial
dimensions around the brand
identity
• Engage stakeholders through
collaboration including internal
teams (sport and management),
support from local authorities,
architects, sponsors,…
• Develop synergies with partners to
create a competitive advantage
• Engage fans, which are not only
supporting the team but also
customers of products and
services, with a complete package
Sponsoring, Merchandising and Services • Develop a 4P's (product, price,
promotion, place) marketing
strategy tailor-made for a football
club by moving from "a marketing
of sport" to "a marketing through
sport"
• Build an integrated experience
bringing together sports, leisure,
and entertainment as "consumer
goods" and leverage this with other
products and services
• Concept of totemism i.e. marketing
of symbolic goods raised to a
merchandise status
14
Team Value Management22
The next point is devoted to the nurturing and flourishing of the previously selected young
players. In addition to them, exchanges of know-how and knowledge with carefully selected
partner clubs may prove beneficial while eventually offering access to players already further
down in their development process. Only a few of this broad pool of young promising players
will be capable of accessing the elite level required to join the major team. Those
unexperimented talents will need to learn from accomplished mature players and coaches who
will be in charge of guidance as well as minimization of their mistakes. The successful
development of these either shaped or acquired players will possibly lead to their trading in the
future. For instance, it will be a matter of sound management of the contract extensions, for
example by urging them to extend their contract before a loan approval to another club, in
search of playing time. The market value of these players relies heavily on this duration factor,
except for the possible clauses contained in their agreement. Therefore, the timing of the sale
will be a strategic indicator to measure the amount that may be obtained. In summary,
managing dynamically the pool of players is another key to success closely associated with
strong negotiation skills and optimal trading of players.
Sport Performance :
In the area of sport performance, the emphasis is truly on the infrastructure needed for both
quality training and games winning. Players and staff must have access to state-of-the-art indoor
and outdoor facilities to deliver high quality services as well as to receive the support of their
12th man at home, namely the fans. Some key performance indicators (KPI’s) exist to
appreciate the quality of these assets and act as a benchmark tool such as the Venue
Performance Rating. In addition to the hardware part, the management must remain consistent
with the club’s vision and identity and follow a well-defined guideline in terms of recruitment
and style of play. This must always be in accordance with the real needs of an inspiring coach
who must endorse the club’s beliefs and shared values. Having access to a good infrastructure,
in particular an excellent stadium ideally in a prime location like a large city with a broad
hinterland is a major source of differentiation as we discuss next. It has an impact on sport
performance but also on the image and brand of the club. Engaging the fans, the players and
the whole organization in a coherent way in line with the history, the location and the style of
the club plays a key role. As mentioned above, we see sport performance as the primary activity

15
of producing good results to support the image & brand and ultimately the commercial
activities. We defined the objective of a professional football club as maximizing its enterprise
value and sport performance is a key way to achieve this objective.
Image and brand :
We have discussed the importance of the main tangible assets of a soccer club in the previous
paragraph but it is equally fundamental to the construction of a coherent image and brand.
Geographic location adds to the list of variables a club should leverage since the attractions of
a city or the ease of access in terms of mobility are likely to increase or decrease the
attractiveness to the average customer/fan. Here too, KPI’s have been designed to quantify the
value and strength of a brand, as we will see later. The secret of success is therefore to create
coherence between the sporting and the commercial dimensions around the brand identity. This
alignment must engage various stakeholders through collaboration including internal teams
(sport and management), support from local authorities, architects, sponsors, among others. The
ultimate purpose is to develop synergies with partners aiming to create a competitive advantage.
Last but not least, the brand should offer a complete package containing a complexified product
portfolio (Andrews (2015)) to reach fans that must be viewed and treated as demanding
customers.
Sponsoring, Merchandising and Services
We will rather talk about capabilities in the framework of the last component of our value chain
adapted to the inner workings of a football club. The right balance has to be found with regards
to the marketing mix of the company, namely product, price, promotion and place. The brand
must implement a marketing strategy tailor-made for a football club by moving from "a
marketing of sport" to "a marketing through sport" and build an integrated experience bringing
together sports, leisure, and entertainment as "consumer goods". The concept of totemism
(Bazanini et al. (2014)) which is the marketing of symbolic goods raised to a merchandise status
will serve to leverage a complexified portfolio of goods and services in the market. In this
context, the signing of a well-known celebrity should always be seen from both a sporting and
a commercial perspective, as additional income could be generated by a good marketing
campaign.
The specific resources and capabilities associated with the emergence of the Super League
which we describe above has been investigated in detail by Andrews (2020). Figure 1.12.
16
summarizes this analysis. He stresses the importance of adaptive learning on developing

infrastructure, accessing capital and implementing engagement mechanisms and ultimately
enhancing the skills of people and the organization. This is the basis of what he calls the
complexification of the Super Club model mentioned above.
In this chapter, we have discussed a model of how a soccer club operates discussing its key
drivers and we have applied several strategic frameworks to identify key activities, resources
and capabilities. In the next two chapters, we will try to test these ideas by looking first at a
large sample of clubs and then by analyzing in more details a limited number of case studies.
17
Chapter 2: Empirical Analysis

2.1. Objective, methodology and data sources
In Chapter 1, we first introduced a model of a football club and its possible value drivers. We
then applied the resource-based view approach to identify the possible key resources
capabilities and core competencies. The objective of this chapter is to provide a first empirical
test23 of the model introduced previously. This analysis is focused on the top 125 UEFA24
football clubs as of December 2020. Table 2.1 in Appendix 2 provides a summary of the dataset
gathered for these clubs. Section 2 shows the evolution of the football industry over time and
section 3 an analysis of the sources of revenues of football clubs. In section 4, we will introduce
different concepts of value and present a first analysis of their relationships with each other.
Section 5 provides an analysis of the drivers and interactions between sport performance and
the estimated value of the team. We also discuss the drivers of team value gains and losses. In
section 6, we discuss a way to classify these 125 clubs into various segments using a cluster
analysis. Finally, in section 7, we draw some conclusions from this statistical analysis, but also
show its limitations and raise some further more granular questions to be discussed in the
following chapter thanks to a detailed analysis of a limited number of case studies.
2.2. The football industry and its development over time
Football is generally considered to be the most popular sport in the world but a formal ranking
of sports very much depends on the criteria used. Different approaches provide different
rankings of sports but all of them put soccer undoubtably at the top of the list. Figure 2.125 in
Appendix 2 present one such ranking. Most rankings show that football is well ahead of its
direct followers like basketball, tennis or cricket. Although football is a world-wide sport,
professional soccer is dominated by Europe. In this thesis, we will concentrate our study almost
exclusively on the European environment. Figure 2.226 in Appendix 2 shows the evolution of
23 All statistical analysis presented in this chapter have been performed using STATA V16
24 https://www.uefa.com/
25
http://www.biggestglobalsports.com/worlds-biggest-sports/4580873435 accessed on 9 Mars 2021. For an alternative ranking of sports
see https://statisticsanddata.org/most-popular-sports-in-the-world/ accessed on 9 Mars 2021 which also puts football well ahead of all
other sports.
26 https://www.statista.com/statistics/261218/big-five-european-soccer-leagues-revenue/ last accessed on 27/06/2021

18
revenues for the 5 biggest European championships from 1996-1997 to 2019-2020. The graph
illustrates the following key points :
(i) Over that period, revenues have increased at an average compounded growth rate of 8.6%
(ii) The English championship is the largest by far and the gap has steadily increased over that
period
(iii) The last year for which statistics are available show already the strong negative impact of
the pandemic on revenue.
The negative impact on the pandemic has also impacted the 2020-2021 championships all over
the world. The pandemic has had a major impact not only on the level of revenues but also on
its composition since fans no longer had access to stadiums. Now that the impact of the
pandemic may progressively fade out, the key question is whether some of the changes
observed will have long-lasting effects on the clubs and their sources of revenues. On that
specific question, the jury is still out as of today.
2.3. An analysis of football clubs revenues
In this section, we analyze the sources of revenues of a group of twenty professional European
soccer clubs. Total revenues for the season 2018-2019 are presented in figure 2.327 in Appendix
2. Revenue ranges from €200 million for SSC Napoli up to more than €800 million for FC
Barcelona. Figure 2.428 in Appendix 2 shows the revenue breakdown between broadcasting,
commercial and match-day revenues and shows that the mix varies significantly across the
twenty clubs analyzed. For instance, broadcasting rights represent around 70% of revenue for
SSC Napoli but only a bit more than 30% for FC Barcelona.
As shown in figure 2.529 in Appendix 2, broadcasting represents on average 44% of revenue,

matchday revenue 60% and all other commercial revenues 40%. This corresponds to a
breakdown for the year 2018-2019, the last year before the impact of the pandemic. A statistical
analysis of the revenue breakdown as a function of the club size measured by its total revenue
shows that the percentage of income coming from matchday does not very much correlate with
27 https://www.statista.com/statistics/271636/revenue-distribution-of-top-20-european-soccer-clubs/ last accessed on 27/06/2021

19
the club size but also shows that larger clubs depend significantly less from broadcasting rights
and generate a larger proportion of their income from other commercial activities.
We next investigate whether the various sources of revenues are influenced by sport
performance as measured by the UEFA score30. We analyze how each source of revenue
depends on the UEFA score but also plausibly on the championship using the English
championship as the reference market. The statistical analysis is summarized in table 2.2 in
Appendix 2. The main conclusions from the analysis are the followings:
(i) All sources of revenues are clearly positively impacted by sport performance but
(ii) Only broadcasting revenues depend on the national championship of the club
(iii) An analysis of the data reveals that club specific factors also influence all sources
of revenues of a club.
2.4. A statistical analysis of value drivers
We now turn our attention to different elements of value introduced in chapter 1 and their
relationships. We begin by introducing the various concepts and their definition31. We use two
elements to measure the brand of a football club based on a score computed by Brand Finance
on a scale from 1 to 50. Brand Finance provides a ranking of the brand value for a subset of 50
top clubs out of the 125 analyzed in this chapter. Based on their analysis we assign a value of 1
to the lowest brand value and a score of 50 to the top one. Brand Finance also introduces a
related concept of brand strength which is defined as « the efficacy of a brand’s performance
on intangible measures, relative to its competitors. In order to determine the strength of a brand,
we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business
Performance » (Brand Finance (2020)).
A second important element identified in our model of a football club is the value of the
portfolio of players. Transfermarkt32 provides measures of the estimated market value of teams
for a large number of football clubs based on the estimated individual values of its core team
of players33.
30The UEFA provides a detailed description of the way clubs coefficients are calculated : see
https://www.uefa.com/memberassociations/uefarankings/club/about/ last accessed on 26/06/2021
31Source : Main database

32 https://www.transfermarkt.com/ last accessed on 26/06/2021
33 In this chapter, we use market value as of 14 February 2021
20
Finally, the total value of a football club is measured by its enterprise value also called its asset
value. KPMG (KPMG Sports Advisory Practice (2020)) provides estimates of market value for
a subset of 32 clubs. A number of football clubs are also listed on the stock exchange and their
enterprise value can be measured as the sum of their market capitalization and their net financial
debt defined as their total interest bearing debt less their cash position.
We will also use in the following analysis an enterprise value score from 1 for the lowest to 50
for the highest value as provided by Brand Finance (Brand Finance (2020)).
Figure 2.634 in Appendix 2 shows the estimated brand value in 2020 for the top 10 football
clubs. Real Madrid CF has the highest estimated brand value of around 1.6 USD billion.
Figure 2.735 in Appendix 2 shows that there is a strong positive correlation between the
estimated brand value and the brand strength. In what follows, we will focus our attention on
the brand value rather than the brand strength. Figure 2.836 illustrates the strong correlation
between the enterprise value and the brand value scores. Figure 2.937 shows also a strong
positive correlation between the UEFA score and the estimated team value.
Finally, figure 2.1038 confirms that the enterprise value estimate by KPMG is strongly
correlated with the market value for the subset of clubs in the KPMG study which are also listed
on the stock exchange. All these relationships are consistent with the expected relationships
based on the model of a football club which we introduced in Chapter 1.
The model introduced in chapter 1 assumes that the enterprise value of a club is impacted by
its brand value as well as its sport performance, which in turn could have an impact on the brand
value. Table 2.3 and 2.4 in Appendix 2 analyze the impact of those two key drivers on the
enterprise values using the enterprise value scores calculated by Brand Finance and the
enterprise value determined by KPMG respectively. In the two cases, we also measure the
impact of the sport performance either by the UEFA score or the market value of the players
and also control for the potential impact of the various national championships using the English
one as the reference.
34 https://www.statista.com/statistics/234493/football-clubs-in-europe-by-brand-value/ last accessed on 27/06/2021

35 Source : Main database
21
We consider first the conclusion of the analysis based on the Brand Finance data and then from
the KPMG data. The main conclusions are as follows:
(i) When considered separately either the brand value score or the UEFA score have a
strong positive impact on enterprise value ranking but when considered
simultaneously only the clubs’ brand score appears significant. But of course, this
is influenced by the positive correlation between the sport performance and the
brand value. The same conclusion holds if the sport performance is measured by
estimated value of the team rather than the UEFA score.
(ii) The impact of the national championship a club belongs to generally has no
significant impact on the enterprise value. The overall conclusion is thus that the
enterprise value is impacted by both its sport performance directly but also by its
brand value which itself could possibly be impacted by the sport performance.
Separating the two appears to be difficult based on this sample. If we now consider
the KPMG data, the conclusions are slightly different and show that both the brand
value and the sport performance have a significant impact on the enterprise value.
Again, differences in national championships do not seem to have much of an
impact. When considered together, we conclude that the two channels sport
performance and brand value and thus commercial activities have an impact on the
enterprise value as suggested in chapter 1.
2.5. Sport performance, market value of the team and team value management
In the previous section, the analysis has been focused on the interaction between the various
value components of the model i.e. the upper part of figure 1.1. We now turn our attention to
sport performance and its potential drivers. Table 2.5 summarizes the descriptive statistics for
the main variables that we will be considering in this section. All data have been retrieved in
February 2020 from the Transfermarkt data base mentioned above. We will first focus on the
drivers of the sport performance and more specifically the drivers of the UEFA score and the
market value of the players. Figure 2.11 in Appendix 2 summarizes the hypothesized model.
First, it assumes that the UEFA score is both influenced by and influences the market value of
the players. In other words, the quality of the team measured by its market value is assumed to
influence the sport performance as measured by the UEFA score but the sport performance in
turn has an impact on the value of the players. We thus have a reciprocal relationship between
22
these two variables. The next question is to identify the drivers of the market value of the
players. We will focus on a few variables which are summarized in table 2.5 and which cover:
(i) The purchasing of players and consider the gains and losses made of this activities,
(ii) The importance of players turnover measured by the transfer activity
(iii) The size of the squad and
(iv) Different measures such as the average age of the team or the age of a player at
signing
These different variables correspond to some of the variables (resources and capabilities)
discussed in chapter 1. We will also consider additional variables which can impact the analysis
such as the capacity of the stadium which we use as a proxy for the size of the fan base, the
image, the location of the club and its size and we will also control for the impact of the
championship each club belongs to.
The results of the model presented above and estimated for the top 125 UEFA clubs are
presented in table 2.639 in Appendix 2. The conclusions of the analysis can be summarized as
follows :
(i) The UEFA scores depends strongly on the market value of the players and vice
versa. This confirms the strong inter-relationships between sport performance and
value of the team.
(ii) The various variables capturing how the club builds its core squad such as the
average age of the team, the level of transfers or the age of players at recruitment
time seem to have no significant effect on the market value of the team.
(iii) Everything else equal, listed clubs tend to have a slightly lower value for their team
(iv) And finally, when considering the championship of the club and using as the
reference the smaller European championships (i.e. all championships but the Big
5), we notice that the value in the top 5 sample championships is higher than in the
smaller ones, again everything else equal.
(v) Turning now to the determinant of sport performance as measured by the UEFA
score, we notice that the market value of the player has a significant positive impact
as mentioned above, that the stadium capacity as a proxy for the fan base and overall
39Table 2.6 reports the regression results using the ordinary least squares (OLS) method and the results using the two stage least squares
methods (2SLS). Given the interactions between the market value of the players and the UEFA score this latter estimation method is the
correct one. Comments will be based on that estimation approach.
23
size of the club has a somewhat positive impact on the performance. Everything else
equal, we notice this time that clubs operating in the smaller championships tend to
do better than those operating in the Big 5.
This statistical analysis does not provide any support for the role of a number of selection
criteria in impacting the market value of the team. This is, in our opinion, a somewhat
puzzling conclusion which might be a pure statistical effect but might also mean that indeed
those variables are not key in driving the value of a team. In chapter 3, we will look at the
more granular level at the role of these key sport drivers.
We also considered player trading as one possible core competency of a club. We will
analyze the role of this skill by considering the drivers on the gains (or losses) on the team
value. Gains on the team values are measured by the difference between the current team
value in February 2021 as estimated by Transfermarkt and the purchase value of all the
players of the team which is also provided by the same website. We will consider gains in
absolute terms i.e. in million euros but also relative gains i.e. gains as a percentage of the
market value of the team. Figure 2.12 summarizes the hypothesized model. We would
expect gains to be driven by sport performance (as measured by the UEFA score), to be
potentially impacted by the team management drivers, the type of ownership of a club and
the overall size of a club as proxied by its stadium capacity. Finally, the gains may also
depend on the championship in which the clubs operate. Table 2.7 in Appendix 2 presents
the results of the model estimated with data for the top 125 UEFA clubs. The main
conclusions are the followings :
(i) As expected, sport performance has a strong positive effect on absolute and relative
gains on team value.
(ii) The purchase value of the team has indeed a strong negative effect on the gains. This
suggests that the key capability is to identify the best players but then to be able to
negotiate the lowest possible purchasing value. In other words, trading skills are an
essential ingredient for the success of a football club.
(iii) All the other key sport management drivers that we use have practically no
significant effects on the gains, confirming again that trading skills are really
essential.
(iv) Finally, the influence of the championship is significant when considering the gains
in absolute terms but not when the gains are measured in relative terms.
24
Looking again at the model of chapter 1, we conclude that trading skills are a core
competence which we will investigate further in chapter 3 which focuses on a limited
number of case studies.
2.6. Classifying the top 125 clubs: a cluster analysis
It is certain that clubs operate in championships with very different characteristics and do not
have the same resources to compete in the industry. We have discussed above for example the
emergence of a Super League, the ownership structure of the clubs, and we have noticed in the
previous section in this chapter that very often conclusions of an analysis are impacted by the
championship in which a particular club evolves. Clubs are thus not all made equal and the
question is can we group them in a limited number of homogeneous segments based on
objective criteria. The objective of this section is to use a cluster analysis to allocate our sample
of 125 clubs to a limited number of market segments. This will also be an important element to
consider when looking at the case studies discussed in the next chapter. Clubs are classified
based on the following variables: UEFA scores, market value of the players, relative gain on
the team, transfer value relative to team value, squad size, number of transfers relative to squad
size, average age of the team, relative age difference, stadium capacity, whether the club
operates in one of the Big 5 championships and finally whether the club is listed or not. In this
section, we follow the approach presented in Mooi & Al (2018) Chapter 9. Table 2.8 in
Appendix 2 shows the methodological approach for our cluster analysis.
Figure 2.13 in Appendix 2 shows the dendrogram associated with our cluster analysis for the
top 10 clusters. The selection of the number of clusters for the analysis is described in the
methodological note mentioned above which led us to select four clusters. Table 2.9 in
Appendix 2 presents the four selected clusters which we now briefly describe.
The first cluster which we call Big 5 – Super League contains the top 20 European clubs. It
essentially includes most of the clubs which were involved in the Super League project.
However, on the one hand, the following clubs which are part of our cluster were not involved
in that project : Sevilla FC, Olympique Lyonnais, AS Roma, SSC Napoli, Atalanta BC and SS
Lazio. On the other hand, AC Milan which is not part of this cluster, was part of the Super
League project. The second cluster which we call Big 5 championships includes all other clubs
operating in the top 5 European championships, the third cluster called small championships –
listed includes 9 clubs mostly in Portugal and Turkey which are listed and operate in the smaller
25
European championships. Finally, the last cluster called small championship - other includes
all other clubs of the top 125 UEFA ranking.
The next step in the analysis is to investigate what actually differentiates the members of each
cluster. This analysis is presented in Table 2.10 in Appendix 2 and leads to the following
conclusions :
(i) The championship a particular club belongs to is a major uncontrollable factor that
differentiates European football clubs.
(ii) In terms of UEFA score and market value of the players, we observe significant
differences across the four clusters. There are significant differences between the
Super League and the other members of the Big 5 championships. They have teams
worth about three times more and do much better in terms of UEFA ranking. We
observe a similar phenomenon between the top clubs of the other championships
which are also all listed.
(iii) In terms of age and recruitment, the average age and the number of years with the
club seem to be higher for the super-league teams than for those operating in the
smaller championships. This is consistent with the hypothesis that the smaller clubs
train and operate with younger players on average who gain experience and then
after a few years are transferred to bigger clubs where they tend to stay longer. The
smaller clubs develop and then feed the larger clubs, in particular the members of
the Super League.
(iv) In terms of transfer strategy, smaller clubs transfer obviously less in monetary terms
but not in relative terms, i.e. They generate higher returns from their development
and selling strategy in comparison with large clubs.
(v) This suggests the existence of a clear differentiated strategy for the members of the
Super League on the one hand and the clubs operating in the smaller championships
on the other hand.
2.7. Some conclusions from the analysis and some open questions
The objective of this chapter was to test on a sample of football clubs some aspects of the model
identified in chapter 1, in particular the role of resources and key capabilities in value creation,
and to also identify the strategies implemented by these clubs.
26
The analysis clearly shows that the Top 125 European clubs are confronted to very different
market environments and constraints. The championship in which they operate, financial
resources and other factors influencing the size of the club (such as its location and the size of
its stadium) play an important role.
We have seen that the largest clubs tend to depend a lot more on revenue from commercial
activities and must therefore have access to the resources and develop the capabilities to be
commercially successful.
We have also confirmed that both the brand value and the sport performance impact the
enterprise value i.e. value creation despite the fact that sport performance also probably
influence the value of the brand.
Looking now at sport performance, we have identified a strong reciprocal relationship between
UEFA score and the market value of the team. It looks like the value of the team is not much
influenced by a number of sport management decisions but that value creation crucially depends
on the negotiation skills to buy key players.
The cluster analysis clearly shows that football clubs follows very differentiated strategies and
in particular the fact that clubs operating in the smaller championships can actually become
quite successful by acquiring and developing younger and less experienced players and then
selling them to larger clubs which themselves then retain and leverage the more mature players.
This chapter generally supports the ideas developed in the first theoretical chapter with one
major exception which is that the sport management policy seem to have a very limited role if
any in the whole value creation process.
In the next chapter, we will look at the role of some key resources and capabilities at a far more
granular level by considering in detail a few case studies. A particular point of attention will be
to investigate the various sport management policies implemented by the various clubs we
considered.
27
Chapter 3: Analysis of Some Selected Case Studies

3.1. Introduction
The last chapter of this Master Thesis contains four case studies corresponding to distinct
business models and complexity levels that will help us understand the evolution of soccer clubs
in a changing environment. First, The Leicester City case will put into perspective an emerging
club in full mutation since its takeover by foreign investors. We will take a look into an
organization which attempts to extract the benefits of its inner workings while spreading its
acquired know-how. Secondly, the case of Dortmund, which is at first glance the one that most
closely resembles a traditional company, is of a highly developed commercial level. We will
explain how the club was able to overcome its difficulties by pioneering a number of
entrepreneurial innovations. Thirdly, we will take another step forward with the extension of
the model to a network of clubs owned by the Red Bull Group. It will allow us to understand
that this policy, developed for marketing purposes, is in fact a much more complex value-added
strategy. Lastly, we will dig even deeper with a networking model pushed to the extremes. The
City Football Group, backed by the United Arab Emirates, intends to form a giant multinational
group of football clubs in order to expand its influence. We will notice that the stakes linked
to this costly pursuit are socio-political and diplomatic as well as being economic. Then, we
will discuss whether the objective of extending the soft power of a state is compatible with the
notion of return on investment.
The case studies analysis are based on the key resources, capabilities and core competencies
identified in chapter 1 and focus on a more detailed, granular analysis of their importance. For
each selected club, we explain why it has been chosen to illustrate some key dimensions and
how it managed to develop a sustainable competitive advantage on that basis. In this regard, the
Porter’s value chain will serve as a relevant reading grid and a guide in the writing of this
chapter. Henceforth, we decided to leverage the adapted model that we developed in Chapter 1
to elaborate our comments. The following themes are analyzed in those cases : Selection &
Recruitment, Team Value Management, Sport Performance, Image & Brand and Sponsoring,
Merchandising & Services.
28
A significant amount of information for this chapter is retrieved from The Athletic 40. This
Sports Media company headquartered in New York is considered to be a leading and reliable
reference in its field by redefining the way fans get access to Sports content.
3.2. Leicester
3.2.1 Presentation
Leicester City is an English football club that essentially became successful after its takeover,
in August 2010, by the Thai billionaire Vichai Srivaddhanaprabha, owner of the Duty Free
company King Power41. Table 3.1 in Appendix 3 provides some key information on the club,
including its history and performance. Leicester is an interesting case because it is a club that
is far from being part of the traditional Super League and yet manages to do well. After narrowly
missing out on promotion to the Premier League on the previous year, Leicester finally put an
end to a 10-year wait by joining the highest echelon of English football after the 2013-2014
season. Two years later, in the 2015-2016 season, it achieved one of the most resounding feats
in the history of sport by beating all the odds and winning the Premier League. What makes its
prestige so undeniable is that it managed to finish ahead of the usual tenors, namely the Big 6,
with far fewer tangible resources. Those clubs, Liverpool, Manchester City, Manchester United,
Chelsea, Arsenal and Tottenham, belong to the Super League caste and usually share the prizes
among themselves. Such a performance earned them the nickname of “The Unbelievables” in
reference to “The Invincibles” Arsenal players who had played a whole season without being
beaten. The Foxes continued to perform well afterwards, winning their first FA Cup title to
punctuate their 2020-2021 season. They have also participated in the UEFA Champions League
despite some unlucky attempts to qualify in recent years.
3.2.2. Selection and Recruitment
Pundits as Rob Tanner, a Leicester specialist, generally agree that “Leicester are threatening to
punch well above their weight again in the Premier League, defying the belief that to aim high
you have to spend big”42. This is the philosophy which attracted, convinced and finally retained
one the most coveted manager of the Premier League. Brendan Rodgers reportedly had many
opportunities in the coaching market but had turned them down for the sake of trust and freedom
40 https://theathletic.com/ last accessed on 4/07/2021

41 https://www.kingpower.com/?lang=en accessed on 8/06/2021
42 https://theathletic.co.uk/2177321/2020/11/03/leicester-recruitment-secrets/ last accessed on 8/06/2021
29
of work. The consistent productivity of a recruitment policy embedded in a long-term oriented

club’s culture, structure and leadership is best reflected in the background of Jon Rudkin43, a
longtime manager of the club who served in the organization for many years before becoming
its director of soccer. The long-standing relationship between Lee Congerton44, Chief Scout,
and Brendan Rodgers, who know each other from their experiences in different jobs, is also a
good illustration. The two men behind the scenes like to let the imagination of the man who
makes the team, Rodgers, run wild in order to create the best possible team and later optimize
the sporting results. In order to achieve the good match, emphasis is applied on the selection &
recruitment processes. The structure tries to sign young players sharing their values of self-
esteem and hard-working, making the choice of sought-after profiles limited. In other words,
Leicester's recruitment decision-makers typically sample the potential supplier clubs to retain
only those whose values are shared and where similarities to their own beliefs are found. For
example, the recruitment department has spotted an impressive number of very talented players
in the lower French divisions.
In order to explain the consistent success and efficiency of their recruitment policy, the process
of identification of a potential targeted player is summarized as follows45 : researching the
players’ abilities and personality, selecting youthful profile of good value with the potential to
be developed and establishing his suitability to fit the Leicester profile.
In practice, the Foxes are also constrained to prospect in different markets to differentiate
themselves given the relative financial gap among the “Super League” big clubs they compete
with. They need to attract talent sooner and faster through channels further down the food chain
pyramid. This means getting players from good clubs in smaller leagues with more dependence
on outgoing transfer money due to the composition of their revenue streams. In line with this
strategy, it led to the acquisition46 of a private subsidiary in Belgium in the form of an
investment in a sister club, namely Oud-Heverlee Leuven. This organization is completely
supported by the parent club while keeping its part of independence and identity. The local
management is financially endorsed and benefits from the acquired knowledge at every level47.
On the one hand, they invested in facilities like fields and stadium but also in data and video
analysis. On the other hand, soft skills including marketing, customer relationship management
43 https://www.transfermarkt.com/jon-rudkin/profil/trainer/6626 accessed on 8/06/2021

44 https://www.transfermarkt.com/lee-congerton/profil/trainer/16219 accessed on 8/06/2021
45 https://theathletic.co.uk/2177321/2020/11/03/leicester-recruitment-secrets/ accessed on 8/06/2021
46 https://www.bbc.com/sport/football/39946036 accessed on 8/06/2021
47 https://www.ohleuven.com/ accessed on 8/06/2021
30
through fans and players recruitment process have been implemented. Marc Brys, Head Coach
of the Belgian entity confirms “there is a vision, a plan, we have invested in the foundations,
the know-how of Leicester is very useful”48. Asked about his investment, the late Vichai
Srivaddhanaprabha declared “Louvain is close from Brussels, The Belgian National Team is
great and the championship as well. There is potential”49. According to him, the aim is not to
swap players between both sides while allowing to line-up a Leicester B for players in lack of
playing time. Nor is it a way to circumvent the rules that came into effect following Brexit
regarding obtaining a work permit in the United Kingdom. The reality of the facts so far proves
him right. Actually, this practice has been used sparingly since they are only three loaned
players from Leicester to OH Leuven at the moment.
3.2.3 Team Value Management
Leicester is an English Premier League team that has distinguished itself in recent years by
excelling in player trading rather than in the youth academy development. Indeed, they were
able to consistently achieve impressive residual values by the selling of key players over a
sustained period. If it is obvious that shareholders had to invest massively to launch and build
such a project, with an estimated purchase value of players around €311 million50, it is also true
that the financial guarantees provided by the foreign private majority investor and the amount
offered by the main sponsors have been a significant help. However, it remained relatively
conservative in comparison with investments from other major clubs in the industry. The
current development of the brand and the history of the club do not allow them to benefit from
the same level of global revenue streams. The organization did not have the means and assets
to compete on an equal footing with the biggest competitors in the field of net investment, hence
they focused early enough on Team Value Management to become a reference in this field.
Paradoxically, the willingness of most popular players keen to pursue their growth in an
ambitious but low pressure club is not to say that the ownership is against a good selling from
time to time. Inevitably, business imposes the need to create residual value but only after having
taken advantage of the sporting profitability. In recent years, the big sales have been N'Golo
Kante (bought €9 million, sold €35.80 million), Riyad Mahrez (bought €500 thousand, sold
€67.80 million), Danny Drinkwater (bought €900 thousand, sold €37.90 million), Harry
Maguire (bought €13.70 million, sold €87 million) and Ben Chilwell (trained at the club’s
48 Sportfoot Magazine n.47 Novembre 2020 : Nous avons un objectif, pas un délai
49 Sportfoot Magazine n.47 Novembre 2020 : Nous avons un objectif, pas un délai
50 Data base Football clubs
31
academy and sold €50.20 million). Interestingly, all these transactions involved clubs from the
English Big 6, which also explains the importance of the amounts collected. The next jackpot
could be hit with the expected sales of Youri Tielemans, James Maddison (each valued at €55
million) or Wilfred Ndidi (valued at €60 million), among many others.
Brendan Rodgers, their long-standing manager, embodies this vision and recognizes the leading
role played by this strategy : “We always knew it was going to be really difficult to punch our
way through into that top six because of the resources, qualities and the size of clubs at that
level”51. In an environment where management turnover is often common place, stability is
essential. One of his greatest achievement is to have won over most of the club's employees to
his cause. Rodgers articulates its ambitions around defined promises to players and directors of
each club he is involved with. First, an open communication. Second, quality in the work. Third,
maximization of the investment, improvement and development of players. Trust between
owners, directors and management appears to be a key success factor. In this regard, it is
essential to underline that there is no interference within the hierarchy. Political conflicts are
mostly avoided as far as director of football, head of recruitment and coaching roles are
concerned. Meanwhile, the limited power of agents makes conflicts of interests rare. In this
regard, the manager of the team is empowered and hold final word regarding transfers and staff
appointment including Head of Recruitment. We observe a stable continuity within the scouting
and recruitment departments and in the way to identify new potential prospects independently
of human resource turnover. The names can change but not the direction.
Last but not least, the club heavily invested in the creation of a state-of-the-art training center
and other facilities. The club can also count on its King Power Stadium52, also known as
Leicester City stadium for compliance with UEFA sponsorship laws. The 32,273-seat stadium
is only the 20th largest in England in terms of capacity. Although Leicester fans are known to
be noisy, we will not consider it as a means of differentiation. Apart from the stadium, however,
the infrastructure delivers the best environment possible to develop players under contract and
maximize their performance level. With such an investment, there is also room for further
improvement in the youth categories development as well.
51 https://theathletic.co.uk/2177321/2020/11/03/leicester-recruitment-secrets/ last accessed on 8/06/2021

52 https://www.transfermarkt.com/leicester-city/stadion/verein/1003 accessed on 8/06/2021
32
3.2.4. Sport Performance
To summarize Leicester's sporting achievements only as having lifted the Premier League
trophy would be somewhat reductive. The club also holds another record, that of having won
the most titles in the Championship, the second English division. Ironically, they share this
characteristic with Manchester City, another historic club that became great later on following
a significant takeover that impacted the performances. The club has also taken part in 5 FA Cup
finals but has only won it once, in 2021, which shows its progression. At the European level,
their rank is logically still very low. The club has participated only 3 times in the Europa League
(1998, 2001 and 2021) and only once in the Champions League, in 2017, following its title, still
reaching the quarterfinals of the tournament. Again, it was an unexpected performance for a
team of this magnitude that reinforces the feeling of competitive advantage somewhere in the
value chain.
3.2.5. Image and Brand, Sponsoring, Merchandising and Services
Leicester's performances have undeniably caught the eyes of the world and won them many
admirers across continents. The image is strengthening and the brand awareness is growing at
a rapid pace. Their merchandising products can be found in many different places while
expanding into markets that are far from saturated. The popularity is certainly even more
developed in Thailand given the investors' connection with the country. The shirts of the club,
as well as those of the sister club Oud-Heverlee Leuven, are sold en masse in the country's
airports. However, it must be admitted that the club is not yet on par with the brilliance of the
biggest clubs of the old continent because of their historical roots and their success over time.
Whether Leicester will ever be able to catch up with them is an open question.
3.2.6. Conclusion
In summary the three areas for which Leicester City has acquired and developed unique
resources and capabilities and excels are the selection and recruitment, team value management
and as a result increasingly sport performance. This is particularly highlighted by their
excellence in development of players under contract as well as player trading and perfect timing
33
at resale. This is less reflected in their integration of young players into the senior team. While
the example of Ben Chilwell is the exception that proves the rule, there is still room for
improvement in this area. The construction of a new academy within a state-of-the-art training
center will certainly help for this purpose while reinforcing strengths in the other fields.
Generally speaking, by continuing to operate in this way, there is every reason to believe that
they will be able to repeat the kind of Chilwell’s experience. To this end, keeping their project
coach along with his approach of Team Value Management as long as possible will be a
strategic point. It will also be interesting to see how the collaboration with the Oud-Heverlee
Leuven partner develops and whether it in turn can benefit from it. The supply of players will
not be the only way to evaluate this operation since the know-how acquired and shared in both
directions will be just as important. As a result, the club should be even less dependent on the
occasional investor-led upgrading by the owners and should continue to be managed in a
sustainable, debt-free manner, using only the commercial surplus from its activities. This
diversification of revenue streams would provide the club's financial department with an
alternative way to balance the books and even make a profit without relying on the sale of its
top performers. This could, hence, lead to longer players retention.
3.3. Borussia Dortmund
3.3.1. Presentation
Borussia Dortmund (BVB) is an emblematic German club located in the Ruhr region (see table
3.2 in Appendix 3). While the BVB case is now a remarkable demonstration of best practices
in the field of player management and trading, this has not always been true in previous times.
Indeed, to understand the management model applied today, it is necessary to immerse oneself
in a context of bankruptcy that the club came close to on several occasions between 2003 and
2005. Overly ambitious plans by the executives in place during this period nearly led to the
Westphalian club's demise, accumulating a debt of approximately €200 million and making the
employer unable to fulfill its payroll requirements. The already tense financial situation was not
helped by the sport performance of the team and became rapidly unsustainable when the team
failed twice to qualify for the group stage of the Champions League. Meanwhile, the stock
index of the only German club listed on the market also dropped drastically. This constrained
the Borussia company to trade a significant part of its stadium to Commerzbank, namely the
34
equivalent of 75% of his home arena rights. The organization also had to give up a portion of
its marketing and player entitlements to an insurance provider. Then, as surprising as it may
seem, came the more than welcome assistance of Bayern Munich (see table 3.3 in Appendix 3),
which had already reacted in a similar way with two clubs in its region experiencing financial
difficulties. As previously with FC Sankt-Pauli and 1860 Munich, Bayern granted Borussia a
financial support of €2 million which came without interest while covering 1% of the total debt.
Of course, while Thomas Treß 53 acknowledges that the contribution was not negligeable, many
other factors played a significant part in rescuing the club. Dortmund’ chief financial officer
specifies that convincing investors was one of them and details that : "Bayern Munich lent the
former management €2 million in September 2004 until the end of October 2004. €1.5 million
was paid back. And I guess, because Borussia Dortmund made a capital increase in October
2004, so from this money they paid Bayern Munich back, aside from €500,000 which was paid
in June 2005."54.
The succeeding managerial team was fully aware that such types of mistakes should be avoided,
as the financial department manager stresses out : "Borussia Dortmund and all the people in the
club learned that you cannot spend money which you did not earn. […] You have to focus your
economic strength and not have the idea to compete with clubs like Bayern Munich or
Barcelona, because these clubs have much higher revenues and more economic strength”55.
Hans-Joachim Watzke56, the current chief executive officer who took over the helm of
operations following this period of high turbulence put in place a recovery plan through an
austerity policy. His management worked hard to streamline the workflow via smart cost
management, persuading banks of the project’s credibility and building strong business
partnerships.
Last but not least, the main strategy has turned to thoughtful recruitment and excellence in the
trading of players acquired at reduced costs. The sustainability of this business approach
reinforced both sporting and financial aspects while leveraging on cutting-edge infrastructures
and facilities for youth development. This successful system of thinking enabled them to climb
back to the top of the German and European soccer scene very quickly.
53 https://www.transfermarkt.com/thomas-tress/profil/trainer/29401 accessed on 23/06/2021

54 https://www.sportspromedia.com/opinion/borussia_dortmund_bite_the_hand_that_once_fed_them accessed on 23/06/2021
55 https://www.sportspromedia.com/opinion/borussia_dortmund_bite_the_hand_that_once_fed_them accessed on 23/06/2021
56 https://www.transfermarkt.com/hans-joachim-watzke/profil/trainer/6910 accessed on 23/06/2021
35
After putting things into context, we will be able to study the areas in which Borussia Dortmund
was able to develop a relative advantage over the competition. We insist on the fact that the
objective is not to compete in the long run with Bayern Munich, which has much greater means
at its disposal. Although BVB has ambitions to lift trophies, the runners-up position suits them
as long as they can reach Europe through UEFA Champions League and put together a
competitive team year after year. This is the reason why we will also focus on the comparison
with its powerful Bavarian rival along this case.
Michael Zorc57, the sporting director of Borussia Dortmund (BVB), is born in Dortmund. He
spent his whole career in Borussia Dortmund, playing nearly 600 matches during 17 seasons as
well as being the team’s captain for many years58. He is the charismatic leader that an ambitious
team needs to reach its objectives.
The development of young players is viewed as a pillar of the strategic orientation of the entity.
The club official website describes it as the duty to “develop junior talent into a strong
professional team that meets the high sporting demands of Borussia Dortmund”59
The organization also claims to be fully conscious of its standing and lower financial resources
compared to either its main domestic competitor, the Bayern Munich, or some international
competitors. On the national scene, Bayern seems to be unreachable while on the international
stage, members of the Super League inner circle appear economically more impactful. The
response to this issue, allowing them to systematically compete with the best, consists in “a
great deal of professionalism and creativity by a close interlocking of youth, amateurs, and
professionals”60.
The management is first and foremost conscious of the indisputable supremacy of Bayern
Munich Football Club regarding national awards. The “Rekordmeister”61 reigns over the
Bundesliga, for almost a decade. The club from Munich is about to win its 9th German First
Division Championship title in a row. The Black and Yellows representatives are also aware
that revenues from the Bundesliga are not equivalent to those of the English Premier League.
57 https://www.transfermarkt.com/michael-zorc/profil/trainer/3295 accessed on 23/06/2021

58 https://www.transfermarkt.com/michael-zorc/profil/spieler/38033 accessed on 23/06/2021
59 https://aktie.bvb.de/eng/BVB-at-a-glance/Strategy2 accessed on 23/06/2021
61 https://www.transfermarkt.com/bayern-munich/erfolge/verein/27 accessed on 23/06/2021
36
Interestingly, BVB is not especially known for the quality of its broad cooperation with partner
clubs in terms of discovering elite players from these sources. They developed a large network
to spread a consistent philosophy and ideas. Nevertheless, in our opinion, it actually looks like
it is implemented more for commercial purposes either to reach new customers or even to
support a good cause than to actually feed the team with players. This is the reason why we
decided to address this strategy in the Sponsoring, Merchandising and Services section. In
practice, to convince and win over the most attractive young players, the organization leverages
on a “modern, professional, and global scouting”62 network. The young talent recruitment is
centered on post-formation, meaning that players are typically acquired later in the grooming
value chain. The club is desperately in need to hold all the technological tools to lead a
consistent scouting process and track the most suited potential acquisitions.
Last but not least, the club is also able to untie the purse strings to secure the services of a
suitable coach for its philosophy and style of play. the latest recent example is the purchase of
the remaining years of the contract of their next coach from next season onwards, Marko Rose63,
by activating a €5 million clause64 in his binding contract with Borussia Mönchengladbach. It
is worthwhile to notice that this trend has been pursued since the latest club has already found
his replacement, the Austrian Udi Hütter65, already acquired by paying an even higher amount
of to poach the current Eintracht Frankfurt manager66.
3.3.3. Team Value Management
It is valuable to notice again that the club’s strategy is focused on post-formation rather than on
supporting players from an early age. Players are generally acquired slightly later in their
development process, but early enough to be shaped following Dortmund’s standards, enabling
them to reach their full potential more quickly. The club strategic statement declares: “As a
consequence, Borussia Dortmund has a very young squad, and will continue to have one in the
62
https://aktie.bvb.de/eng/BVB-at-a-glance/Strategy2 accessed on 23/06/2021
63 https://www.transfermarkt.com/marco-rose/profil/trainer/24197 accessed on 23/06/2021
64 https://www.transfermarkt.com/official-rose-will-take-over-at-borussia-dortmund-in-the-summer-ldquo-we-are-very-happy-rdquo-
/view/news/380359 accessed on 23/06/2021

65 https://www.transfermarkt.com/adi-hutter/profil/trainer/5018 accessed on 23/06/2021
66 https://www.dw.com/en/bundesliga-adi-h%C3%BCtters-eintracht-frankfurt-falter-at-reborn-borussia-m%C3%B6nchengladbach/a-
57241762 accessed on 23/06/2021

37
future. This path, which we have been pursuing very forcefully for many years now and which
will be developed further in the future, sets us apart from many competitors”67.
Their main mean of differentiation, but also of survival among the top European clubs, has been
to develop a strong competitive advantage in value creation and production of up and coming
stars. They have, henceforth, the opportunity to sell and balance the books. Here again the
strategies of the two rivals are drastically opposed and the differences in amounts involved are
enormous. They do not receive the same financial amounts to spend68.
Raphael Honigstein and Tom Worville from The Athletic establish the cleavage as follows :
“Bayern can lock in their best performers long-term, whereas Dortmund are forced to have a
much more fluid squad composition, based on nurturing high-potential prospects and spending
more money on mid-class players looking for the next step”69. Although this may seem
paradoxical, the high turnover rate regarding incoming and outgoing transfers of players
allowed them to spend larger amounts in transfer fees than the wealthy Bavarians. Indeed, those
expenses were respectively of €480 million and €380 million between 2014 and 2019. The
difference is in the balance of trade since, over this period of time, while BVB was creating an
healthy profit of €80 million, Bayern, not facing any sales constraints, was maintaining a
negative trade balance of €160 million.
Thanks to this combined excellence in the integration of youth players into the senior team,
development of players under contract and especially in player trading, the club has been
rewarded with a prominent place in the McKinsey ranking70 on Team Value Management. The
best illustration provided by The Athletic article is as simple as this : “BVB added more than
€400 million to their squad value over the last five seasons, mostly thanks to clever resource
management and the development of players”71.
The strategic goal is constantly driven by “the principle of maximizing sporting success without
piling up new debts”72. The funding of team value management is mainly supported via surplus

68 Data base Football clubs V7 last accessed on 7/06/2021
69 https://theathletic.com/2175741/2020/11/05/dortmund-bayern-munich-
bundesliga/?article_source=search&search_query=Bayern%20Dortmiund accessed on 23/06/2021
70 https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-value-pitch-the-importance-of-team-value-
management accessed on 7/06/2021

38
from commercial activities but the incoming revenue generated by transfers is essential too
given the difficult financial history of the club.
The investor-led upgrading, which consists of cash constantly injected by shareholders, is not
considered as a viable option. The German 50+1 model engaging fans and favored by the fans
makes this kind of fund raising impossible. This is a restriction imposed by the Bundesliga itself
to its clubs with the aim to counter excessive foreign investment. In a nutshell, out of the net
transfer investment streams identified by McKinsey73, sustained revenue surplus is the only
plausible lever of growth. Investor-led upgrading and debt financing are not even considered as
reliable and sustainable strategies.
BVB maintains the image of a club that has always been able to surround itself with
entertaining, charismatic and rigorous coaches. The superior quality of their approach of the
game is widely recognized in terms of tactical, psychological and most importantly physical
aspects through players management. This is best illustrated by the fact that many coaches who
have worked for the club are now thriving at other clubs. The best examples of success are
Jürgen Klopp and Thomas Tuchel, now respectively actives at Liverpool Football Club and
Chelsea Football Club. In parallel, the club detains some of the most “bankable” young prospect
in the world with the English man Jadon Sancho74 and the Norwegian attraction Erling
Haaland75. Both footballers are highly rated on the transfer market. Sancho is currently valued
at 100M€ by the specialized website Transfermarkt. It means that this should require at least a
sum of money in this range for any potential buyer while Haaland will cost even more, with an
estimated price tag of €110 million. These amounts are obviously only estimates and do not
take into account potential clauses in contracts or balances of power. To provide them the best
environment to flourish, future coaches should systematically follow in the footsteps of trainers
who like to work with young technical players rather than more experienced and mature ones.
73
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-value-pitch-the-importance-of-team-value-
management accessed on 7/06/2021
74 https://www.transfermarkt.com/jadon-sancho/profil/spieler/401173 last accessed on 15/05/2021

75 https://www.transfermarkt.com/erling-haaland/profil/spieler/418560 last accessed on 15/05/2021
39
While the club has often been able to rely on a team built from players with a wealth of
individual qualities, the club has always put team spirit and intensity at the core of its
philosophy. The team is one of the best balanced chemistry between young highly-rated talents
and experienced mature players guiding and supervising their evolution.
The straightforward style of play is all about direct verticality and quick transitions by
exploiting spaces. The pressing and fast pace imposed on the opponent allow disruptive assaults
and thrilling counter-attacks in reconversion. It is a risky but spectacular way to play. The
emphasis is strongly put on "intensity", “authenticity”, "commitment", and "ambition”.76
The institution also praises its impressive infrastructures and facilities by willingly assessing
the following statement : “with the help of superb framework conditions, such as a modern
training center and foundation of BVB Fußballakademie GmbH we foster and develop highly
and extremely talented players77”. Workshops are also organized by a professional team of
sociologists to educate and explain them what is “the meaning of playing for Dortmund”78.
Always in line with their Selection & Recruitment approach, their attitude towards the
overwhelming dominance of the Bavarian giant is humble and pragmatic. In the long run, they
know very well that their most realistic chances of sporting success are to lift the DBF Pokal
(German national cup) and to qualify for the Champions League knockout stage rather than to
be crowned national champion. They certainly do not claim to position themselves as a strong
contestant for the national title but as an opportunistic outsider79.
3.3.5. Image and Brand
The corporate culture is deeply rooted in the Westphalian region as evidenced by the
commitment to perform for the club of the Sporting Director Michael Zorc and other executives.
In the same way, the managers ensure a dedication around “social responsibilities towards the
fans, club members, the city of Dortmund, and the region”80. The mission and positioning is

78
https://theathletic.com/2175741/2020/11/05/dortmund-bayern-munich-
79 In the most symbolic way, even when they were able to reach the final of the most prestigious club competition in the world, they failed
in the face of the magnitude of the task. As was expected by most specialists at the time, they lost the 2012-2013 UEFA Champions League
Final in Wembley Stadium, London, against the Bayern Munich.
40
deployed trough the idea of “building of a long term modern football company establishing
itself at the top level of the German national league”81.
The Stadium, called Signal Iduna Park but famously known for its Yellow Wall is viewed as
the epicenter of the project. It plays a big part in their unique selling proposition (USP) which
differentiates them from the crowd of competitors. It is a unique selling point both for fans and
players through emotional pull and atmosphere. While the award can be seen by some as
subjective judgment, the enclosure has once been designated as “the best and most beautiful
football stadium in the world”82 by The Times83 which described it as “the best atmosphere on
the Continent on a game-to-game basis”. The enclosure maximizes the fan engagement via the
expression of a concentrated energy and an unwavering support at home.
Loyal to its principles, Dortmund always tries to retain control of its assets and business model.
They master and strengthen the football-related BVB brand and image perfectly which in turn
lead to a successful expansion through global markets. This branding follows exactly the same
logic than the team : Deliver “an intensive football experience through intensity, authenticity,
commitment and ambition”84.
3.3.6. Sponsoring, Merchandising and Services
The choice of sponsors is also strongly impacted by the geographic location of the two clubs.
The assertion is simple : “Munich, a hotbed for technology, media and services is nearly three
times the size of Dortmund, which is situated in the post-industrialized Ruhr area”85. This
development often comes at a price for a segment of the more conservative fans who praise the
respect of traditions. Once again, Dortmund opted for authenticity and regionality with the
selling of the stadium’s naming rights to the local insurance and financial services company
Signal Iduna. Once again, Goliath outperforms David in terms of revenue86 while leveraging
on its own local insurance company. The contract allowing Allianz to give its name (Allianz
Arena) to the Bayern stadium is worth six times more than the corresponding naming agreement
for Dortmund. The same ratio also applies to shirt sponsors. On the one hand, Deutsche
81
https://aktie.bvb.de/eng/BVB-at-a-glance/Strategy2 accessed on 23/06/2021
83 https://www.thetimes.co.uk/article/the-top-ten-football-stadiums-r7pj5mggbc3 accessed on 23/06/2021

86 See Appendix 3
41
Telekom is Germany’s biggest mobile network company. On the other hand, the appearing
sponsor on Dortmund’s shirts, 1&1, is an internet company providing webpages. As a main
result, the gap between the commercial revenue of both clubs is a highly significant difference
of €200 to €300 million at the beginning of each season. Nevertheless, The Dortmund’s
directors still assume that the key strategic objectives drivers will be covered by a growing
income obtained through marketing rights as well as a rise of the business turnover87. These
factors should in turn generate a sustainable improvement of the value of the BVB company.
Its strategists identify traditional revenue streams of professional football as the way to get
bigger : games ticketing, TV marketing, advertising, retail, and transfers. Those touchpoints
will remain at the core of the BVB business model in the future.
Another key partnership is the one with DAZN88, a global over-the top (OTT) Sports Media
reaching over 400 million monthly users across 37 markets covered by 18 languages89. The
platform delivers a personalized service through a tailor-made fan engagement. To do so, it
leverages on cutting-edge technology able to display targeted advertising to DAZN customers.
The content is widely spread thanks to over 1800 publishing partners, social media influencers
and sports stars forming an impressive network.
Borussia Dortmund has partnered with DAZN Media Team for the launch of a significant global
marketing campaign. Its stated purpose was to increase the reach of fans in South East Asia
through several engagement mechanisms. The brand has been able to expand its regional
awareness via a well-thought out social media campaign. DAZN was assigned to create weekly
entertainment content to engage potential prospects. The communication was articulated across
the showcase and highlighting of prestigious competitions such as German Bundesliga and
UEFA Champions League. Regular followers of the club’s Facebook account could access the
inspiring work powered by DAZN Media’s creative content studio in Singapore in their local
language. The Fanbase to convert was geo-targeted on Thailand, Vietnam and Indonesia. The
ultimate goal of the move can be summarized as the necessity to “reach, engage and grow the
club’s fanbase in the region, whilst increasing loyalty, interaction and match viewership online
as well as directing fans to watch the Borussia Dortmund documentary on Amazon Prime”90.
Finally, the collaboration was able to leverage synergies thanks to the previous deployment of
88 https://media.dazn.com/en/ accessed on 23/06/2021
89 https://media.dazn.com/en/dazn-media/ accessed on 23/06/2021
90 https://media.dazn.com/en/press-releases/2019/11/borussia-dortmund-and-dazn-media-team-up-for-asia-campaign/ accessed on
23/06/2021
42
the Japan’s J League. The Nippon Championship had previously used the services of the Tech
Media to “manage its international social media strategy with the goal to grow its brand
presence and following overseas through digital and social media”91.
This collaboration between an internationally renowned fan activation agency and one of
Europe's biggest clubs has strengthened its connection with the Asian nations. The modern
communication has given the Germans a young and dynamic image in a market that is far from
saturated. It is with this logic that the famous international pre-season tours generally take place.
Although it was made impossible by the sanitary crisis measures ahead of this season, the club
pledged to support its international followers in this difficult time. The Head of International &
New Business department and his team competed in ingenuity to prepare something for their
distant admirers in China and South East Asian countries. In this regard, they launched the
Virtual BVB Tour of Asia to stay in touch with that audience. The reaction to the situation
being to take advantage of the technological tools at the club’s disposal, BVB Managing
Director, Carsten Cramer, quoted : “this inspired us to strengthen our digital communications
from Dortmund to Asia in close cooperation with our office locations in Singapore and
Shanghai as part of our preparations for the 2020/21 Bundesliga season”92. As far as the online
content is concerned, virtual meetings with players, livestreams of training sessions and even
friendly matches were delivered. Moreover, special online press conferences were hosted in
Singapore and Tokyo in order to grant interviews to local Bundesliga’s TV partners. On site
activities included Black and Yellow bus tours through Shanghai. On this occasion, special
treatment was given to the region's loyal fan clubs as well as to corporate relations including
Evonik, Puma, Rowe, Duisport and several Asian companies. The involvement of Evonik93 and
Puma, two main partners, regarding the launch of the new cup jersey is a particularly
demonstrative evidence. The large German chemicals company94 and the famous international
sportwear corporation took part in the announcement of the revealed kit worn at events such as
DFB cup matches, UEFA Champions League matches and international friendly matches.
Evonik Industries AG is listed on the Frankfurt Stock Exchange and headquartered in North
Rhine-Westphalia to which the city of Dortmund belongs. While PUMA is the third largest
91 https://media.dazn.com/en/press-releases/2019/11/borussia-dortmund-and-dazn-media-team-up-for-asia-campaign/ accessed on
23/06/2021
92 https://www.bvb.de/eng/News/Overview/BVB-bound-for-Virtual-Asia-Tour accessed on 23/06/2021
93 https://corporate.evonik.com/en accessed on 23/06/2021
94 https://en.wikipedia.org/wiki/Evonik_Industries accessed on 23/06/2021
43
sportswear manufacturer in the world, the club's tendency to partner with local, albeit
multinational, companies is once again highlighted.
BVB Evonik Soccer Academy occupies a prominent place in the expansion strategy of the
Borussia Dortmund’s merchandising through international cooperation95. Its worldwide
reputation and track record especially in terms of youth development plays a key role in the
provision of this service.
It consists in the transfer of know-how to international clubs, schools and universities relative
to sporting skills as well as social educational values. This sharing of competences and soft
skills is realized thanks to the on-site involvement of BVB’s philosophy representatives, which
is spread to an impressive list of partner clubs and various organizations (see box 3.1 in
Appendix 3 for more details).
3.3.7. Conclusion
In conclusion, the relative competitive advantages developed by Dortmund are multiple and are
spread across the different activities of the value chain. In the selection & recruitment part, we
identify a strong local and international network of scouts partners. These are articulated around
a strong personality, a charismatic and inspiring sports director for the rest of the organization.
In the same way, the choice of the coach is also made in a thoughtful way and adapted to the
operating needs of the club. These are fundamental criteria in the optimization of Team Value
Management. This field of expertise is supported by high-level infrastructures. The youth teams
are full of talented prospects who can reasonably expect to make the jump to the first team. The
more mature players on that team act as guides for these youngsters to take over. The revenues
generated from the commercial activities as well as those linked to the previous outgoing
transfers allow consequent means of financing the Team Value Management without
accumulating debt and putting the club in danger. Although the club has considerably less
money in absolute terms than Bayern Munich, this does not prevent Dortmund from achieving
positive results in terms of sport performance. At this stage, they can rely on their unique
stadium in the world filled with singing and passionately cheering fans. Their identity values
of intensity, authenticity, commitment, and ambition can be found at all the club’s levels, on
and off the field. This sustained vision also ensures consistency with the strong brand image
that it has allowed them to build and deploy around the globe. It goes without saying that the
95 https://www.bvb.de/eng/BVB/BVB-Evonik-Football-Academy/International-Cooperations accessed on 23/06/2021

44
academies launched with the help of partners and the numerous activations directed at
international fans have had a beneficial effect on the brand's positioning. The club's digital
presence, particularly through its collaboration with DAZN, has enabled its expansion and
recognition in Asia. The implementation of this marketing plan through sport, via a marketing
mix leveraging on the latest technological development, accentuated merchandising sales
opportunities in the region.
3.4. Red Bull Group
3.4.1. Presentation
Red Bull GmbH is a private company, headquartered in Fuschl am See, not far from the city of
Salzburg in Austria, that sells energy drinks whose production is outsourced to Thailand. The
organization became especially known for its involvement in sponsoring first, and then for its
ownership of various events and sports teams. The brand first opted for a niche market by
specializing in extreme sports before moving into more traditional sports. To cut a long story
short, Red Bull Marketing is a unique case in the field of brand management with its decision
to leverage a strategy to enhance its brand awareness within niche markets. Their sport
marketing approach disrupted the market by targeting specific investments in strategic areas.
The objective has undoubtably been to build a strong image of adventure, adrenaline,
achievements and success96 . To do so, the trend followed by the group was in the first place
focused on less bankable sports before investing in the most popular game in the world. It is
this last aspect that we will focus on in this case study. After acting in sponsoring like the
majority of its mainstream competitors, it quickly decided to opt for a more value creative
alternative, investing directly in the industry i.e. by hosting sporting events. The race to reach
larger audiences forced it to opt for a still more ambitious strategy. Instead of relying on external
players to advertise its brand, it simply chose to create its own content consumption only
accessible on its own channels. In addition to that, by keeping its distribution rights it created
other sources of revenue.
96https://medium.com/box-2-box-eng/the-marketing-strategy-that-drives-red-bull-to-invest-in-football-14c169edcee0
accessed on 23/06/2021
45
Actually, Red Bull Media House (RBMH) takes in charge the corporate communication and
the spread of the Red Bull brand. This managerial change is Blue Ocean type in the sense that
it completely revolutionizes the way goods are sold. This way of working makes it possible for
the organization to attract most of the profits all along the value chain. The same approach
applies to the way they operate in football.
Red Bull's strategy and behavior in the football industry differs greatly from the objectives of
most other clubs. The first football club acquired by the group in 2005 was in Salzburg, a choice
making sense given the short distance from Red Bulls’ Austrian headquarters. This led to their
decision to take over SV Austria Salzburg while taking it through a complete rebranding leading
to a change of its name into Red Bull Salzburg. Shortly afterwards, they added three additional
performance-dedicated entities, namely New York Red Bull, RB Leipzig and Red Bull
Bragantino in Brazil. It also acquired strategic feeder clubs to assist them in their mission.
Those lesser-known clubs are New York Red Bull II, Liefering (Austria Second Tier) as well
as Red bull Brasil. The administrative systems, however, differ greatly from country to country.
The Red Bull Brasil case illustrates really well this complexity. This subsidiary was the first
move in order to establish a contact point with the talent goldmine that the Brazilian market
represents but the local bureaucracy soon decided otherwise. In a nutshell, it constantly slowed
down the granting of the required licenses. The second attempt, Red Bull Bragantino, a club
they promoted from Serie B (Brazil's 2nd division) by winning the title in a short period of time,
proved more successful. This victory came about quickly thanks to the resources made available
by the group, allowing them to acquire better players under the eyes of their most powerful
rivals. Red Bull had to be patient, content to be a simple shirt sponsor during the first year of
collaboration before rebranding the club to its name. Another aspect of how the brand portfolio
is organized is the property rights that exist in different regions. This explains why it is only
allowed to own its Austrian and American entities, while finding creative solutions for the
others. The problem occurred when Red Bull tried to enter its parent company into one of the
most visible European leagues; Germany. In addition to that, the close linguistic and
geographical ties between Austrians and Germans was an attraction for Red Bull's expansionist
ambitions. However, the rules of the German Bundesliga are the most drastic, due to the 50+1
ownership model limiting foreign investments, as already explained. The cultural shock was
not easy to overcome either as the group encountered protests from fans of the clubs they were
approaching for a takeover. As a result, they quickly had to lower their expectations and accept
to acquire a club playing in the 5th level of the German divisions while located thirteen
46
kilometers from the city of Leipzig, in eastern Germany. This required ingenuity to circumvent
the rule when taking possession of SSV Markranstädt, including the constraint that a sponsor
may not appear in the name of the club. The most obvious subtlety lies in the acronym of the
team, namely RB Leipzig. Officially, RB does not stand for “Red Bull” but rather for
“RasenBallsport” which literally means “lawn ball sport”. In a more sophisticated way, they
overcome the majority voting law by limiting the number of members to 750, and just 19 with
voting rights, all working for the Red Bull company.
To give a quick benchmark against the German elite, we can refer to the two clubs studied
earlier in this chapter97 . Bayern Munich has 293 thousands members while Borussia Dortmund
has 154 thousands. All of them have voting rights. This scheme, of course, gave RB Leipzig
undeniable control over the decision making process. Subsequently, the second attempt to enter
the Brazilian market also ran into legal problems and forced the multinational to establish a
private association rather than a Private Limited Company. The desired exposure brought by
the participation of its teams in major competitions did not limit for long to the name, logo and
colors of its contenders. The overall communication had to focus on the energy and high
intensity promoted by the marketing of the drink, and this had to be reflected in all intangible
aspects of the game. This assumption is summarized by Thiago Scuro, Head of Football
Operation of RB Bragantino : “Technique and aggressiveness are the two basic pillars (…)
athletes who have a good level and who have a physical profile and aggressive attitude to make
a high intensity game (…) that heavy, slow striker who only waits for the ball in the last third
does not part of our athlete profile ”98.
Red Bull Football Group is a very atypical case since it operates following a true pyramidal
structure. At the very top of the pyramid, we find the Red Bull Leipzig, as the flagship team of
the group. The next layer is made up of 3 clubs that must have the ambition to maintain fairly
high performance standards and dominate their league, respectively in Austria, USA, and
Brazil. At the bottom of the pyramid, the last layer is made up of clubs whose only objective is
to feed the teams above them, without nurturing any sporting ambitions (see figure 3.1 in
Appendix 3).
97
Football Benchmark - The 50+1 rule in the Bundesliga – Strength or weakness? accessed on 9/06/2021
98https://medium.com/box-2-box-eng/the-marketing-strategy-that-drives-red-bull-to-invest-in-football-14c169edcee0
47
The plan is based on a well-established strategy that resembles a pyramid structure. The best
performers from clubs at the bottom of the ladder, i.e. Brazil, USA and Austria, earn the right
to move up to the next level. This first process ends up in Germany. Nevertheless, the best of
them which turn out to be of an even higher standard, may be traded for far more than the cost
of their development. The decision-maker continuously establish a well-defined recruitment
policy for each franchise whose distinctions can be summarized as : (i) American selection ,
Blue Ocean Strategy, (ii) Brazil , The golden mine and (iii) The rest of the world.
In the US, the Head of Football department proceeded to a breakthrough innovation in the field
of talent identification, building a revolutionary cost-free program for a pipeline of young
players from all over New York and its surroundings. Once the profile is validated by the
scouting network, they are given access to a soccer education system offering them prospects
for development across the continents. This bet on the future has already paid off handsomely
and promises to further contribute to the development of many talents.
However, these sources of supply were not enough for Red Bull's masterminds, who decided
to attack a promising and already crowded market. South America, and especially Brazil, is
sometimes referenced as the “Eldorado of undiscovered football stars”99 by clubs’ scouts
around the world.
The key to succeed in the Brazilian market’ talent identification is to develop a broad network
with various stakeholders. Recruitment units have to deploy boots on the ground to deal with
the political trends while they desperately need to make connections with local presidents of
clubs. This is certainly not a low-cost approach: Brazilian market is expensive not in terms of
wages but transfer fees. Moreover, a recent trend is threatening the Red Bull’s usual recruitment
network. Indeed, many observe an attempt from the biggest clubs to cut out the middle man100.
This trend shift in the industry is summarized as follows : “The race to identify and sign the
best youngsters in Brazil is intensifying. The biggest clubs are no longer content to wait until a
player is 20 or 21. They want to get a deal done when the player is 16 or 17, monitor his progress
99 https://medium.com/the-innovation/how-red-bull-is-building-a-profitable-football-empire-1b59fe4f71fb accessed on 23/06/2021
100 https://theathletic.co.uk/1702441/2020/03/28/real-madrid-brazil-recruitment-vinicius-rodrygo-reinier-neymar/ accessed on 25/05/2021

48
closely until he can move, then shape his tactical and technical development”101. This leads to
a strong reduction of the average amount of appearances with the local Brazilian team year after
years since the most promising ones leave their land at the first opportunity.
Another factor which adds to this move is that the majority of Brazilian football teams do not
have reserve teams to let players evolve since they are used to identify talent very early. It
means that talent is estimated mature enough to gain access really early to the first team and
rare are those who succeed after a certain age. As a matter of fact, it lowers the level of the
Brazilian league which loses early its best talents while the economic situation of local clubs
does not allow them to refuse financially attractive offers.
Red Bull strategy is to convince the best talented players that the Red Bull project is the most
suited to their career plan and allow them real possibilities for promotion. Money is not the
only convincing factor since conditions for a change of environment, from South America to
Europe, become meaningful. Representatives have to negotiate with families to ensure them a
significant playing time as well as possibilities of progress in terms of sporting perspectives.
The group's recruitment networks obviously extend far beyond these two countries and it is not
uncommon to see channels operating across Western Europe, most notably in France and
Scandinavia, as part of the constant search to talent identification.
One man is largely responsible for the implementation of a breakthrough idea in team value
management. Ralf Rangnick102 is the real architect of the project. He entered the Red Bull
sphere in June 2012, joining RB Salzburg and RB Leipzig as their joint sporting director until
June 2015 and June 2019 respectively. He even did some interim work as manager of RB
Leipzig team during this time, but this did not allow him to have an overall influence on the
network as he wanted. He then became the Global Sports Director on the football matters for
Red Bull Group, including stakes at RB Leipzig, RB Salzburg, New York RB and RB
Bragantino, from July 2019 to July 2020. He is also credited with revolutionizing the way
101
https://theathletic.co.uk/1702441/2020/03/28/real-madrid-brazil-recruitment-vinicius-rodrygo-reinier-neymar/ accessed on 25/05/2021
102 https://www.transfermarkt.com/ralf-rangnick/profil/trainer/196 accessed on 25/05/2021

49
tactics, and in particular pressing, are thought of in Germany. His charism combined with this
system of thinking earned him the nickname "The Professor" by the German media.
Rangnick’s theory for achieving a vision rely essentially on three pillars : Capital, Concept &
Competence. “If those three things come together, then you can be successful. If you only have
one or two of them, it’s more difficult”103. “He’s the sporting motor of our club and so is
fundamental to our future development”104 states RB Leipzig’s CEO Oliver Mintzlaf105, another
“wise men pushing the club onwards and upwards with all the energy packed into one of the
cans sold worldwide by Leipzig’s multi-billionaire owner, Red Bull mogul Dietrich
Mateschitz”106. While the club is certainly not short of money, the path to success was certainly
not guaranteed. If money and results were perfectly correlated, the German championship
ranking would certainly not look like it does. The impressive achievement is due to a strict
policy and sustainable mechanisms of improvement.
The aim of this orientation towards football business for Red Bull is completely different from
the one taken for the other sports in which it is active. This is not about marketing sponsorships
but profits. The discovery, development and resale of these young talents is part of a logic of
direct financial gain, selling players like they would sell drinks. With a view to perfecting the
supply chain and production line, Red Bull is completely reshaping the value chain of all the
franchises it takes under its wings.
It cannot be denied that the financial means made available to work are a significant help.
However, not all clubs that have this money at their disposal do so. The club has always
remained faithful to its policy of investing in promising young players. Even more noticeably,
the group has also given its sportsmen and women, and more particularly its footballers, access
to the best possible facilities. This is Red Bull's way and tangible proof of improving the
production chain of the sporting elite. The state-of the-art infrastructure, called The Athlete
Performance Centre, is located in the vicinity of Salzburg. “[It] offers coaches, experts and
medical stuff who work in the fields of strength and conditioning, physiotherapy, mental
performance, nutrition, research and development and environmental consulting”107. Elite
103
https://www.bundesliga.com/en/news/Bundesliga/brains-behind-rb-leipzig-s-rise-ralf-rangnick-contract-2021-red-bull-464992.jsp
104 https://www.bundesliga.com/en/news/Bundesliga/brains-behind-rb-leipzig-s-rise-ralf-rangnick-contract-2021-red-bull-464992.jsp
105 https://www.transfermarkt.com/oliver-mintzlaff/profil/trainer/36854 accessed on 25/05/2021
106 Bundesliga | Who is Ralf Rangnick: The brains behind RB Leipzig's remarkable rise accessed on 25/05/2021
107 From Cliff Diving To Formula One and Football: How Red Bull Built A World-Class Sporting Empire (forbes.com) accessed on 25/05/2021
50
athletes, sponsored or not by Red Bull, are granted “complete physiological evaluations, 3D
movements analysis, sleep consultations and mental performance assessment”108. This
mountainous city hosts also The Red Bull Academy, “which nurtures young talents from the
ages of eight to 18 in both football and ice hockey with the hope they will one day represent
one of Red Bull's constituent teams”109. The approximatively 200 football trainees can leverage
on six outside pitches as well as one indoor hall.
However, economies of scale and value created are often hidden but go far beyond the tangible
aspects. On this side, the Head of Football Operation of RB Bragantino, Thiago Scuro, clarifies
the synergies in place : “There is a person in the technical area who talks to all sports directors,
in the commercial area, in the legal area … (…) we have exchanges of ideas; of practice among
sports directors (…) we also have eight professionals who work monitoring athletes in South
America, to attend Red Bull Bragantino but also to provide information to other clubs in the
group“110 (see box 3.2 in Appendix 3 for some examples of transfers and synergies).
These synergies developed by the group are often accused of limiting competition in the transfer
market by minimizing trading prices during transactions or circumventing the rules. Critics of
this strategic approach allegedly accused it to be a cartel disrupting the market with anti-
competitive practices. They claim that transferring these players to non-Red Bull clubs would
have cost those outsiders much more money, which is not totally meaningless.
A famous example of this practice has been the transfer case of Marcel Sabitzer 111 from Rapid
Vienna to RB Salzburg via RB Leipzig. The departure was made possible by a clause in his
contract stipulating that the player would be released from his obligations by paying the modest
sum of €2 million from outside Austria. This condition was intended not to strengthen a direct
competitor in the competition. The Germans from RB Leipzig acquired the player and made
him available to Red Bull Salzburg the following day for the following season. A direct arrival
in Salzburg would have required a much more expensive investment, if not an impossible
transaction. There, however, the current iconic Leipzig captain played a major role in polarizing
the Austrian Bundesliga before moving to the German Bundesliga. The midfielder, currently
110 Together we’re stronger: the synergy of Red Bull football teams | by Theodoro Montoto | Box 2 Box (ENG) | Medium accessed on
20/05/2021
111 https://www.transfermarkt.com/marcel-sabitzer/profil/spieler/106987 accessed on 25/05/2021
51
valued at €42 million by Transfermarkt, is now often linked with a move to the European top
flight, away from the Red Bull galaxy, for a much higher fee than his cost of acquisition.
In the same vein, given the opacity of the amounts involved, it is difficult to assess whether
agent fees are calculated on the same scale when a player moves up the chain.
First, it looks like the sporting results of the weakest clubs of the pyramid do not appear to be
a top priority. Their role is to discover players with the potential to play higher up in the
organization or to be sold for a good sum of money. This is certainly not the case for the flagship
team of the project, RB Leipzig, which has experienced a meteoric rise to the top. Die Roten
Bullen already secured a second place in their first year in the top flight, during the 2016-2017
season. This performance guaranteed them a coveted place in the lucrative Champions League
for the 2017-2018 season. They have since brilliantly reached the semi-finals of this
competition over the course of the 2019-2020 season.
Coaches are hired based on the knowledge of their playing principles. They must share the
global values of the Red Bull global philosophy and follow a training process within the clubs'
academies. They are trained, drilled, but have real possibilities to evolve within the
organization.
In this regard, tactical devices may vary (3–4–2–1 from Leipzig, 4–4–2 from Salzburg and New
York, and 4–3–2–1 from Bragantino), but attitude remains the same. The vertical and direct
approach to the game combined with the willingness to fight for every ball reflects the brand's
positioning to perfection. To follow this path, the branches rely mainly on young players who
can physically keep up with the pace and who have time to learn their trade in this way. This
talent management is also true for the coaches in charge of these youth-oriented teams. The
managers want a modern approach to the game and give a chance to young coaches with less
experience but closer to their players while bringing new ideas. It is therefore quite natural that
coaches follow one another within these franchises. They take over from someone who has
inspired their own principles. Members of the Red Bull family often stay in it for a long time
and it is not uncommon for them to return to the network during their career. This allows a great
deal of flexibility in terms of planning and workforce succession.
52
The style of play & playing identity and coaches training and evolution can be illustrated as
follows : when the ball is lost, players have eight seconds to regain possession of it and ten
seconds to try their luck while making an attempt to score a goal. Players are fully committed
to this style of play and are convinced that it is the best path for their individual development.
Trainings are adapted to the methods : tools are put in place to condition them and speed up
their decision-making process.
The New York Red Bulls, for instance, have been busy rebuilding their internal workings in
order to realign with their European sister clubs. One of the earliest move in this regard has
been to rejuvenate the team. The main focus for the club is not to be the most successful club
in the American Major League Soccer (MLS) but rather to fit into the overall Red Bull model:
“signing young players and coaches for good value, developing them, succeeding with them in
the league and, eventually, moving them up within the organization or out of it for a profit”112.
However, this is an absolute objective that is difficult to accept for the fans, who sometimes
feel that their club has been denatured and protest against a lack of ambition. They feel that
they are just one part of the chain that must be used to supply the larger chains.
As we have explained above, image building and brand awareness are the core matters of the
Red Bull strategy. In the same way as the impact that their events must leave in other sports,
the impression left by the clubs they own therefore plays a fundamental part in their positioning.
Let us now consider the implications of this strategy on the brand and image of the Red Bull
clubs whose communication is handled by the Red Bull Media House (RBMH).
Interestingly, a supporter of a team acquired by Red Bull, and even the team in question, does
not necessarily share the values advocated by the brand. Success on the pitch is not the only
thing that matters to a club's supporters, and constant marketing can get in the way. Some
supporters of clubs taken over by the group do not find themselves comfortable at all in the new
identity imposed by Red Bull and decide to switch to another team or to create a new one.
Many Austria Salzburg fans were deprived of the authentic values of their club and did not
112https://theathletic.com/2122577/2020/10/07/how-hiring-gerhard-struber-aligns-new-york-red-bulls-with-their-sister-clubs/
53
adhere to the values set up by the incoming management team. It was not only renamed RB
Salzburg, but also lost its logo and colors. It is therefore a trade-off for the brand, which must
expect to lose fans who would rather join another club more in line with their own image than
continue to support a club they no longer feel close to. On the other hand, the brand is also
aware that it will continue to gain adherents as long as it continues to offer an attractive playing
style and accumulate high-flying performances. It would have been interesting to observe the
reactions and the repercussions on the image and brand if one of the Red Bull clubs, most likely
Leipzig, had been involved in the failed Super League project.
Red Bull Group is as expected the main sponsor of each football club that it controls. This
remains an essential element of their marketing deployment, an assumption confirmed by one
particular case. When the group acquired a stake in Red Bull Bragantino, it was not immediately
able to change the club's features for legal reasons already mentioned. Instead, the group was
content to appear as the team's main shirt sponsor for a short period of time before transforming
it into the common identity. Meanwhile, this does not prevent Red Bull teams from teaming up
with other brands, even if they do not appear visibly on the merchandising such as jerseys. For
example, on the official website of RB Leipzig113, the club highlights its collaboration with
local real estate partner CG Elementum, sports betting company Unibet and even the car
manufacturer Volkswagen. It is interesting to note the involvement of the latter since it is also
the somewhat less controversial owner of Vfl Wolfsburg. As explained earlier, Volkswagen
and Bayer have received special dispensations from the German Football Association because
of their working ties to local communities, respectively in Wolfsburg and Leverkusen. They
have therefore met with smaller protests from the crowds than RB Leipzig and TSG
Hoffenheim. However, the exposure that the Red Bull logo gains from appearing on these shirts
and stadiums pales in comparison to the association of its brand with the events it hosts, the
stars and the football clubs it holds in its portfolio. It is good to remember that Red Bull doesn't
just trade players but also mainly sells cans of energy drinks, and so has to make its consumers
willing to purchase them. However, sales from growing merchandising, club-related services
113 https://www.dierotenbullen.com/en accessed on 9/06/2021

54
and, most importantly, profits from departing players will continue to play an important role in
the Red Bull business model.
3.4.7. Conclusion
To summarize, the soccer part of the Red Bull Group has accumulated both hard and soft key
resources and capabilities overs a short period of time, partially by leveraging skills in their
own industry. They applied their existing know-how and were able to roll it out in their football
division through all layers of the pyramid afterwards while also giving to the network of athletes
access to quality tools to cultivate their personal and collective development. As such, the Red
Bull teams benefit from quality technologies and facilities in each country in which they
decided to be implemented. However, the most state-of-the-art academy is in Salzburg, at the
core of their Austrian roots. In addition to these cutting-edge training centers, scouting cells
have a gateway to interesting markets that they tend to mastermind. Their recruitment model
and technical scouting software that enable them an in-depth exploitation of these fields appear
to be a competitive advantage. It may be considered as sustainable because of the difficulty
encountered in imitating these inner workings. Another one is the broad network of clubs which
permits them significant cost savings when moving players across the web. In this manner, the
group can keep control over the intermediaries they negotiate with as well as on agent
commissions paid. They can also plan the succession of coaches and staff in advance. By
defining a roadmap and splitting tasks, they can avoid having to improvise under pressure.
However, there is still some doubt as to how the club will recover from the departure of two of
its leading builders. Ralf Rangnick had already resigned at the end of last season due to
disagreements with his management and Julian Nagelsmann114, who will officially leave the
club on June 30 2021, will fly to Bavaria, for an adventure with the rival of Bayern Munich.
This transaction, although denied by the purchaser, allegedly cost a whopping €25 million
which should allow Leipzig to make some sound investments. Fortunately, they have already
found his replacement in the person of Jesse Marsch115, who has been trained in and comes
from the pyramidal network of the club. He previously coached in New York, already worked
in Leipzig as an assistant manager and also managed Salzburg with which he has obtained
encouraging results. However, those losses, as well as that of Dayot Upamecano 116, who also
opted for Bayern Munich in return for the payment of his release clause of €42,5 million, have
114 https://www.transfermarkt.com/julian-nagelsmann/profil/trainer/8402 accessed on 9/06/2021

115 https://www.transfermarkt.com/jesse-marsch/profil/trainer/17275 accessed on 9/06/2021
116 https://www.transfermarkt.com/dayot-upamecano/profil/spieler/344695 accessed on 9/06/2021
55
not been well received by the group, which fears for the image sent to competitors as well as
the public. Leipzig, one of the main pursuers of the German champion letting go its best coach
and its best player in the same summer window does not make good publicity to the ambitions
of the club. It is likely that the adaptative leadership will react by aligning and maintaining the
vision and identity that made its strength in terms of recruitment and playing style. Last but not
least, a trade-off will have to be made when it comes to commercial investment and fan
engagement given the criticism and praise that Red Bull clubs receive around the world. The
strategy adopted in the search for sponsors will also be interesting to see evolve.
3.5. City Football Group
3.5.1. Presentation
In this last case study, we will look at another business model that develops the Red Bull
approach even further and will try to discover what is the distinctiveness in approach that
differentiates it from the multi-club Red Bull Group.
Abu Dhabi's long-term underlying investment strategy is to move away from its dependence on
oil by diversifying its economic focus. This includes opening up to tourism, the arts and of
course sports through the organization of events and the ownership of flagships sport clubs. At
a geopolitical level, such actions make sense as they develop the creation of soft power
legitimizing the golf country on the international diplomatic scene while being also crucial to
the stability of the government to remain in place.
Manchester City (see table 1.5 in Appendix 3) used to be a mid-league club but successive
investments brought the club’s ambitions to a higher level. The Citizens, as the team use to be
labelled, were acquired in July 2007 by Thaksin Shinawatra, former Prime Minister of Thailand.
An official of the United Arab Emirates (UAE) purchased the club from him in September 2008
for £210 million. Following legal disputes incurred by the previous owner, Thaksin, the
purchase was made at an affordable price but the incomer injected considerable amounts of
money to pay off debts. After various transactions, the equity investments into the City Football
Group (CFG) are currently split among three influential powerhouses (see figure 3.2 in
Appendix 3 for an organization chart of the group). Abu Dhabi United Group (ADUG) holds
56
77% of the shares. ADUG is an investment fund owned by the Prime Minister and member of
the Emirati royal family, Sheikh Mansour bin Zayed Al Nahyan (also Minister of Presidential
Affairs for his country). A second stake of 13% is owned by China Media Capital (£265 million
investment) and CITIC Group ($400 million investment) since 2015. Both are Chinese
companies and the latter previously used to be called the China International Trust Investment
Corporation. It is therefore unsurprising to notice a significant correlation between investment
decisions and government policies. Another minority investor is the American private equity
firm Silver Lake, with a 10% stake acquired in November 2019 for $500 million.
The development of City Football Group has followed a relentless exponential curve over the
last decade. The global branding strategy led by Abu Dhabi sovereign wealth fund, the most
powerful emirate within the United Arab Emirates (UAE) along with Dubai, is carefully
considered. This expansion across the sport industry must inevitably be accompanied by some
contextualization. In contrast to its peers of the Middle-East, Abu Dhabi like Dubai, given their
geographical locations, were soon forced to focus not only on their access to oil resources. They
decided to differentiate their economy by diversifying their global investments. In this respect,
sport rapidly played a major role through two well-known mechanisms : sponsorship related to
sporting properties and sporting club ownership. The leverage on the launch of their global
airline carrier called Etihad Airways, now in operation in six continents, is associated with this
strategy. The first major football-related investment via an investment group led by a member
of the Abu Dhabi royal family was precisely the purchase of the then mid-ranked club
Manchester City presented above and generated a lot of reactions. In fact, the money invested
was to enable them to quickly close the large gap with the city's perennial rival, Manchester
United. Unsurprisingly, Etihad became the main sponsor and provider of funds using techniques
than we previously presented such as naming rights of the stadium as well as on the shirt. As a
result of this irruption in the market one can easily state that the Sky Blues, another nickname
for Manchester City worked out to match the Red Devils’ pulling power. They completely
outperformed their opponent in terms of sport performance while the Citizens may have
developed a sustainable competitive advantage. The most interesting thing to analyze in this
case study is the development of a complete global-scale network of clubs in the following
years. Those worldwide well-thought-out investments permitted the group to reach each
continent but to achieve different objectives. This, leads to a benefit of owning a club network
: the creation of internal synergies and the cost savings that go with them. Most functions can
be performed by one person, reducing the number of staff needed and giving a more unified
57
vision and strategy to the group. This coherent management approach simplifies decision
making and can be felt in each area of the organization, from sporting areas to commercial, as
in the case of Red Bull.
However, this possible competitive advantage will have to be discussed and analyzed because
the line between wealthy investors looking for prestige, visibility and political strategic
objectives and businessmen looking for sounds investments with good financial returns is not
always easy to detect. The mechanisms and distinctive processes will be investigated in detail
to figure out how those emerging markets were carefully chosen and on which level competition
is taking place. We will also cover the questions of Sam Lee, Matt Slatter and additional
contributors who conducted the investigation of this atypical group for the sports business
magazine The Athletic117. On this occasion, they wondered how exactly can the “overarching
governing objective” be defined for the organization. They also tried to identify the deeper
global purpose between “produce a return on investment”, “launch franchises all over the
globe” “achieve sporting dominance” and “create a marketing platform”.
The ultimate vision of the organization is described by The Athletic as follows : to be the best
football organization in the world. In other words, the publicly declared vision can be
summarized as “Football as a sprawling entertainment business like Disney”118. In this regard,
the group intends to become a global brand through the creation of a global network of football
clubs via a well-defined strategy : owning, rebranding and renaming registration platform
(property clubs) by covering each continent and retaining talent as much as possible. In theory,
each subsidiary should embrace a curve that promises sustainable viability in its own right. In
practice, these peripheral entities are generally acquired at rather advantageous market
conditions. It means that the relatively low development cost of a single player who gets noticed
by potential high bidders may in turn occasionally offer a record sales to his employing club
while ensuring their self-sufficient survival for a few years without requiring the backing of the
group.
117 https://theathletic.com/2244579/2020/12/10/cfg-manchester-new-york-city-
soriano/?article_source=search&search_query=part%20two%20special accessed on 3/06/2021
118 https://theathletic.com/2244423/2020/12/09/city-football-group-
manchester/?article_source=search&search_query=zone%20part%20one accessed on 3/06/2021

58
This thinking appears perfectly endorsed by the sayings of Ferran Soriano119, Manchester City’s
CEO, announcing the acquisition of the Melbourne football club : “We want all our teams to
take benefit from our global organization. We have experience in football performance,
medicine, sport science, and of course tactics and technical development. We also know about
player recruitment and have large scouting networks all over the world to look for players for
the Melbourne team as well as the others”120
At first glance, our grid of analysis suggests that the core competencies that such an
implemented pyramidal structure would obviously support are the selection & recruitment
combined with team value management through youth development and trading capabilities.
In fact, the business model officially promises to “develop players either good enough for
Manchester City first team either for another CFG club or not good enough but tradable for big
sums”121.
In reality, the truth is that very few players develop themselves technically, tactically or both to
one day join the organization’s flagship. Therefore, the supply is almost unilaterally made
thanks to net investment i.e. the acquisition of mature players with cash injected from outside
of the group.
The whole project revolves around two pillars: Abu Dhabi and Ferran Soriano, a Spanish
businessman whose ideas are partly shaped by his training at ESADE and a former executive
of FC Barcelona. Through his current job, he is finally given the means to realize the vision that
was denied to him on the Catalan side. After an experience in the aviation field, City Football
Group managed to convince him that he was the right man for the project. According to
Professor Simon Chadwick, director of Eurasian Sport at Emlyon Business School : “Together,
they bring a distinctiveness in approach that differentiates them from other multi-club groups,
such as Red Bull (the owners of clubs in Austria, Brazil, Germany and the United States)”122.
“Abu Dhabi was looking for vision at City while Soriano wanted a way back into football so
he could translate his view of football’s future into a new reality,”123 ensures Simon Chadwick.
119 https://www.transfermarkt.com/ferran-soriano/profil/trainer/41525 accessed on 10/06/2021

120 Sports Business Management Decision Making Around the Globe (2021)
121 https://theathletic.com/2244423/2020/12/09/city-football-group-manchester/ last accessed on 31/05/2021
59
Ferran Soriano has such an admiration for clubs that can produce a global brand that he has
dedicated a book to it entitled "Goal: The Ball Doesn't Go in by Chance: Management Ideas
from the World of Football"124. In this book, he claims that elite clubs have to “capture the
growth and become global franchises”125 to no longer be simple promoters of local gatherings
but worldwide event organizers. It is according to him the only way for elite clubs to develop a
sustainable competitive edge impossible to copy for competitors. He then focuses on the
importance of a multi-national oriented strategy to avoid wasting resources through the
appropriate allocation of financial means. He emphasizes the need to engage fans across
continents, including tours of their own territory and gala matches against local teams. The
success is often such that the support is shared equally between the two teams. More
specifically, he drafts a manual with three concrete deployment phases consisting of :
• Step 1 : Product distribution implying the worldwide share of broadcast rights and
replica kits. In addition to that, a summer tour is recommended to reach and convert a
maximum of potential prospects with the aim of turning them into loyal followers.
• Step 2 : Opening of academies in these regions to promote the elite club thinking and
build a strong brand image.
• Step 3 : Natural progression by the launch of sister clubs in the form of franchises in
order to offer an "always on" presence in these foreign countries.
In practice, outsourcing of marketing and sales to local organizations is common practice, as is

the relocation of offices to provide a better view of the events. Build bridges allowing
cooperation between talent identification networks is one of the outcomes.
Selection and recruitment is a key asset for CFG on which it ambitions to differentiate itself.
This objective translates into concrete means with approximately 100 people mandated by the
group in charge of football operations. In sharp contrast to others, its processes are said not to
be as data-driven as some of its competitors, which may have created conflicts between data
124 Soriano, F. (2011). Goal: The Ball Doesn't Go In By Chance: Management Ideas from the World of Football. United Kingdom: Palgrave
Macmillan.
125 https://www.theguardian.com/news/2017/dec/15/manchester-city-football-group-ferran-soriano accessed on 1/06/2021
60
analysts and scouts, who consider their work to be sufficiently substantial thanks to the
synergies induced by the close collaboration with their analytical counterparts.
CFG's research and development department has developed the City Football Academy,
drawing inspiration from sports and industries such as the NBA and NFL, brands such as Nike
and government organizations such as the Australian Institute of Sport (AIS)126. As a result, a
state-of-the-art training facility was created to continue to produce young players, but at a
higher level matching the changing needs in standing and quality.
In conjunction with this investment, the so-called Emerging Talent Programme127 was born
from the involvement of two leaders : On the one hand, Brian Marwood128, managing director
of global soccer, takes care of optimizing the logistics ensuring the best talent management until
the eventual arrival in the Manchester City core team. On the other hand, Txiki Begiristain129,
through his role of sporting director, is responsible for signing the best players. Partner clubs
are seen as registration platforms likely to welcome and retain a larger number of interesting
young players given the limited places in the parent company. While regulations on transfers
differ from country to country, these options are of course designed to offer a way around
certain constraints. Globally, synergies are also created to overview the big picture as local
scouting departments are mandated by City to identify, select and recruit the best local talents.
This saves considerable time, energy and money. This collaboration is particularly visible
between the Japanese employees of Yokohama F. Marinos and the European staff. These
players could then probably be sent to the Netherlands, Germany or Belgium as previous
experiences of developing Japanese players in these leagues have often proved to be successful.
From their perspective, a gateway to Europe and a relatively secure career plan is sufficient to
convince them.
City Football Group maintains intensive contacts with recruitment units in South America,
particularly through the networking of Txiki Begiristain, City’s director of football, while
taking a leading role in decisions on the allocation of players to clubs together with Marwood.
Logically, Montevideo City Torque should serve as a rallying point for talents spotted in this
region, at least as a first stage.
126 https://www.ais.gov.au/ accessed on 1/06/2021

128 https://www.transfermarkt.com/brian-marwood/profil/trainer/9440 accessed on 1/06/2021
129 https://www.transfermarkt.com/txiki-begiristain/profil/trainer/6616 accessed on 1/06/2021
61
Family clubs can also use Manchester City's talent identification services, for which there is a
relative scarcity of worthy players, to help them identify talent at their own level. These targets
will then be acquired for their specific needs with a view to retain them while negotiations will
be conducted by local sporting directors.
Last but not least, to create an ideal framework of development, several optimal career paths
are studied inspired by successful player profiles by including variables such as playing time
and competitions attended into the equation. In summary, these are the career paths generally
taken by the players identified in their countries :
(i) Japan, then Netherlands, Germany or Belgium

(ii) South America, then Uruguay followed by France, Spain or the USA
(iii) Australia, then other Anglo-Saxon leagues.
In terms of Team Value Management, investors' strategy deserves to be further discussed.

Manchester City is following a trend of recruiting players and selling them, if possible at a
significant profit, without them ever having played, or having played very little, for the parent
club. “The top clubs use their financial strength to tie down talents early. They often develop
during loan spells at other clubs”130 . They take out loans through the clubs belonging to either
the ownership network or the partner clubs. They may also occasionally leave to seek sufficient
playing time for their development outside the broad network of clubs. In many cases, these
players do not even meet the requirements for a work permit in England. They are therefore not
even eligible for the team that recruited them. Indeed, in order to be allowed to work as a
footballer in the UK as a non-EU citizen, one has to meet conditions such as a minimum
percentage of participation in the national team, relative success in continental competitions or
the league as well as a certain number of matches played with the previous club. Age is also a
factor in the granting of special talent status by a commission. This system, based on a minimum
number of points to be obtained, aims to promote the development of young English players,
particularly to supply the national teams, by prohibiting the recruitment of foreign minors.
Following Brexit, it is worth noting that even EU citizens will be subject to such barriers in the
130https://www.transfermarkt.com/how-man-city-amp-co-make-transfer-profits-with-players-never-featuring-for-
them/view/news/352192 accessed on 27/05/2021
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future. Another point to note is the legal difficulty for English clubs to locally have at their
disposal a feeder club or a reserve team playing at a respectable level.
In line with this strategy, some CFG clubs are chosen to develop talents with no objective of
achieving results since their sole purpose is to showcase the players selected by the scouting
unit in order to maximize their potential profit on resale. The level of the competitions in which
players take part as well as the valuation of these leagues will undeniably influence the market
value of those individual human assets. This is most notably due to TV rights contracts as well
as other structural factors attached to competitions which will impact growth rate in the transfer
market of those respective countries. As a matter of facts, all other things being equal, a player
in the Spanish league will get a higher value than one evolving in the Australian league. It is
therefore not particularly necessary to keep these players in a team for a long time to see their
price soar. However, those specific selected clubs are also viewed as the right place to develop
specific players due to cultural and environmental factors. A player from Latin America, for
example, is more likely to acclimatize in an Hispanic country. Moreover, a notable benefit of
this approach is the retention of transfer allowances within the group account. Sometimes the
departure of a mature player from these smaller clubs to another covers their running costs for
several years, as illustrated by the successful case of Aaron Mooy 131 whose transfer from
Manchester City, after a stage by Melbourne City, to Huddersfield Town in July 2017 brought
in approximatively €9.10 million. This reflected the extent of linkages across the network that
led to this value creation before the perceived flow of money from outside.
A significant number of clubs use this value creation strategy, made possible by the constant
growth in the use of loans, although the case of the City Football Group is an extreme
illustration. The parent club Manchester City, for example, sent currently 17 players on loan
whose aggregated market value reach €107.90 million132. It is ranked fifth in this category
behind Chelsea, Real Madrid, Fiorentina and Inter Milan. The Financial Times stresses this
aspect in its study “How player loans are reshaping European football’s transfer market”133
which focuses on data provided by Transfermarkt : “loan deals only accounted for six per cent
of transfers in the top 5 European leagues at the start of the 1990s. Since then, this figure
increased to 29 per cent”134. This logistics management undeniably requires the establishment
131 https://www.transfermarkt.com/aaron-mooy/profil/spieler/123951 accessed on 31/05/2021

132 https://www.transfermarkt.com/statistik/leihspieler accessed on 27/05/2021
133 https://www.ft.com/content/9bd82b30-caf2-11e9-a1f4-3669401ba76f accessed on 27/05/2021
134 https://www.transfermarkt.com/how-man-city-amp-co-make-transfer-profits-with-players-never-featuring-for-

63
of a full-time team responsible for the supervision of loanees. However, an external factor could
come into play as the FIFA wants to regulate the player loan market to avoid abuses. The
assumption hypothesizes that “the world association plans to limit the number of players out on
loan to eight. In addition to that, a maximum of three or four players can be loaned out to the
same club at the same time”135, while adding at the same time that “talents under 21, who were
developed at their parent club and are under contract there for a longer period of time, can be
loaned out in unlimited numbers to support their development by giving them match
practice”136. According to the New York Times137, the regulation is planned to come into force
in the 2021/2022 season, and then to be tightened the following year, leaving only 6 loan
possibilities for players over 21 years old. The market expects a reduction in transfer prices as
a result of an increase in the number of players available on the market. Since any legal means
of circumventing a rule is open to abuse, as we saw in the Red Bull case with the controversial
transfer of Sabitzer, City’s methods have also come in for criticism. The complaint came from
the Australian Central Coast Mariners who, having sold one of their own player to Manchester
City, saw him go straight into the shirt of Melbourne City. The detail that ignited the fire was
the transfer ban in the A-League, which left the Australian Football Association with no choice
but to prevent such ambiguity from happening again. This amendment is now known as the
Caceres138 Rule.
In addition to the network of clubs it already owns, the football multinational group has
embarked on establishing partnerships with international clubs. These agreements promise to
transfer knowledge and know-how across the entire organizational chain. In this regard, a recent
collaboration involves Club Bolívar joining the circle of partner clubs. It confirms that
“Bolivia’s most decorated club will now benefit from the City Football Group’s infrastructure,
coaching, scouting and contacts”139. The official statement pursues by quoting City Football
Group chief executive Ferran Soriano : “We are very pleased to grow our global presence
through this important collaboration with Club Bolívar, City Football Group’s first partner club,

137 https://www.nytimes.com/2018/09/13/sports/soccer/fifa-report-transfer-market.html accessed on 11/06/2021
138 https://www.transfermarkt.com/anthony-caceres/profil/spieler/226739 accessed on 1/06/2021
139 https://www.transfermarkt.com/partnership-with-club-bolivar-man-city-rsquo-s-ownership-group-announces-new-
agreement/view/news/377611 accessed on 26/05/2021

64
this long-term agreement is the first of its kind and will enable Club Bolivar to draw down on
and utilize the wide range of football industry expertise developed by City Football Group”140
Pep Guardiola141, Manchester City FC manager, is to be considered one of the best coaches in
the world for his revolutionary ideas on the game. He has undoubtedly created what many
consider to be the best team in history during his time at FC Barcelona with his so-called tiki-
taka focused on ball possession. Furthermore, he managed to make a club like Bayern Munich
adhere to his philosophy and completely transformed the way his experienced players played.
He is one of the key figures of the project, bringing leadership, charisma and credibility.
Guardiola Playbook is a relevant tool for the network in order to develop the playing style
wanted by CFG and available to each employee. It supports the ideology and the willingness to
perform in each area of the game. The whole network benefits from largely spread guidelines
and a common database which allows a standard assessment of the qualities required to work
in one of the links in the chain. For the selection and recruitment process, these checks imply
people in place, processes in place, adequate infrastructure, technology available and possible
innovation to achieve a competitive advantage142. In addition to this knowledge sharing, it is
not uncommon for City to send one of its members to lead one of its development teams in
order to make the most of their skills. The turnover of coaches from club to club is seen
positively and encouraged. It is currently the case in Belgium, where Liam Manning143, former
academy director at NYCFC in USA, took over the reins of Lommel. The ultimate objective is
to enable all coaches belonging to the City network to learn the house methods by providing
them with the necessary resources to improve. Brian Marwood, an advisor at the Premier
League club in close contact with local staffs, agrees : “all the sporting directors are fully aware
of the style of play and what the requirement is. In some respects, we put that above anything
else. We’re very protective of that and we work very hard to make sure all of the clubs
implement that in the best way they possibly can.”144
In conclusion, the same applies to each player, invited to evolve in the pyramid. Although
officially belonging to his own team, he must be able to adapt flexibly to any other member in
140 https://www.transfermarkt.com/partnership-with-club-bolivar-man-city-rsquo-s-ownership-group-announces-new-
agreement/view/news/377611 accessed on 26/05/2021
141 https://www.transfermarkt.com/pep-guardiola/profil/trainer/5672 accessed on 3/06/2021

143 https://www.transfermarkt.com/liam-manning/profil/trainer/76341 accessed on 1/06/2021

65
the web of clubs. Those will pay the required transfer fees by themselves, while the amounts
received from eventual sales will end up in the same bank account.
Possible critics may oppose that City has already been fined €20 million for violating financial
fair play rules, point out that the club can afford to manage wages flexibly compared to
competitions where salary caps prevent the payment of Premier League standard salaries, or
that ultimately, cases of players reaching the Manchester City first team are ridiculously rare.
Those critics are reinforced by figures provided by the well-informed magazine The Athletic :
“Research by The Athletic has shown 36 per cent of players to have arrived at CFG clubs since
2013 have left for free and the group has made a profit in the transfer market on only 7.5 per
cent of those players. CFG clubs have made a total loss of around £420 million in terms of
player trading, although only Manchester City are in the red. The other nine CFG clubs have
made a net profit of £19 million”145 Moreover, despite the multiplication of loan system, only
one player is at this stage considered to have made his way to the top. The lucky one is
Oleksandr Zinchenko146, and still, he waited his time by transiting through clubs outside the
network.
The amounts spent were enormous for the results obtained. After the takeover of the club, €500
million in losses had resulted from winning an FA Cup in 2011 and a Premier League in 2012.
The business model was undoubtedly overspending and it was time to streamline some
processes.
For most of the clubs under the Manchester City umbrella, it is not even a question of
participating in a European competition given the fact that "UEFA only allows one club under
the same ownership structure to play in its tournaments"147. The idea that the results and sport
performance of these teams are not primarily priorities within the organizational structure is
further reinforced by the choice of some of these cheaply purchased clubs. Indeed, their
146 https://www.transfermarkt.com/oleksandr-zinchenko/profil/spieler/203853 accessed on 3/06/2021

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demographic situation will probably never allow them to obtain a substantial fan base as they
are geographically located a few blocks away from much more prestigious clubs.
Nevertheless, all the clubs franchised by the brand must conform to a chain of values, whether
it be hardware or software. The style of play to be deployed is no exception to the rule, which
is constantly monitored by City executives through a conscientious auditing. These practices
are directly inspired by the mistakes made and the wise decisions that have shaped the learning
curve of the organization. These experience effects apply from the most mainstream decisions
to the most granular, from sporting tactics to medical surgeries.
In the United States, the championship is divided into two parts: the so-called regular phase
decides who will qualify for the play-offs, leaving room for a mini-competition to decide the
champion. If we take the case of NYCFC, we can see that the club is consistent, holding the
record in terms of wins and points acquired at the end of the regular phase. However, the club
has so far struggled to leverage this to win the laurels.
Let’s put in perspective the stakes involved in the image that the City Football Group must
maintain to better understand the project. In this regard, it is necessary to look at those club
assets as tools used as propaganda by a sovereign state. This Middle Eastern country, part of
the Persian Gulf, is constantly torn by power games and geopolitical struggles with his
opponents. Maintaining a positive reputation is not always easy when you are regularly targeted
for human rights violations148, but it helps to have interests in sports to deflect attention.
The accumulation of trophies alone is not enough to bridge the gap between a brand under
construction and the amount of international followers of the biggest clubs in the world. In this
regard, some clubs are only used for branding and marketing objectives. “Our brand is perfect,
because it is ‘City’ and we know we can add that word to any city,”149 assesses simply Soriano.
When a club is added to the portfolio, not only the name is changed, but also the colors are
directly redesigned to display the sky blue used in all branches. The branding must therefore
adapt to a common identity policy.
148 https://www.theguardian.com/world/2013/dec/22/abu-dhabi-migrant-workers-conditions-shame-west accessed on 3/06/2021

67
The business side of things, however, remains paramount, with many hoping the repercussions
of American MLS brand development over time will take the form of a virtuous circle on the
market value of players. The process seems on track with the number of young American
prospects making a name for themselves in Europe recently while contributing to enhance their
home country’s image.
Some critics will always assume that City is a way to improve the image of a country that has
not always been free of blame. They will add that it is a hobby for leaders who do not know
what to do with their money. Others will argue that their means will always allow them to
circumvent the rules laid down by financial fair play.
However, more and more pundits, wealthy investors and, in contrast, competitors are looking
at this model as a potential solution to the structural crisis in which the clubs find themselves,
an interesting way of harnessing the demographic expansion of football and providing some
stability to the industry. Indeed, like the stock market, this can be seen as a portfolio
diversification activity and risk reduction through the gain of additional guaranteed income.
It is honestly acknowledged by many CFG executives that the objective number one of the
massive purchase of clubs was, before turning to selection and recruitment, purely commercial.
The logic behind this strategy was to maximize profits from merchandising in every continent
and to build interesting sponsorship relationships.
Soriano was stunned about the revenues of some clubs with a fanbase that could have provided
them with much more. He could not hide his disappointment, claiming that “a team with a
global following of 500 million fans might have an income of only €500 million. That’s one
euro per fan”150. The main criticism was that most of the intercontinental followers did not
contribute to the club's wealth in any way. The answer was, according to him, in one word:
glocalization. When combining global and local marketing approaches, the company maintains
a strong message that is widely deployed while adapting to the demands and requirements of
specific markets. This has not only meant the sale of merchandise from the star club in these
territories, but rather the creation of “a corporation that would have both a global brand –

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in Manchester City – and lots of local brands, developing talent through a network of clubs that
would also provide a pipeline of players for City”151.
The attraction enjoyed by these sister clubs also lies in the bargaining power that this union
gives them since a sponsor wishing to establish itself on a long-term basis with the Manchester
City powerhouse is thus obliged to commit to supporting partner clubs on other continents.
As a confirmation of the wide range of synergies available to a group of this magnitude, the
turnaround in the City Football Group's relationship with one of its main sponsors, Nissan, is
symbolic. The Japanese multinational is headquartered in Yokohama, Japan. It is therefore not
insignificant to learn that the car manufacturer decided, in 1972, to establish its football club in
the city while having them play their home game at the Nissan Stadium. At first sight, however,
there was no question of the CFG executives being involved in any way in the management of
the club. On reflection, however, their skills and connections eventually led to a close
collaboration between the two parties. This advanced partnership eventually convinced Nissan
to grant them the right to a 20% stake in their football business, allowing the group to extend
its influence and knowledge of the Japanese market.
Still in Asia, the Chinese market is not considered the most buoyant and the investment in
Sichuan Jiuniu is primarily commercial in nature. Yet, devoting significant resource
investments to it is therefore not seen as a strategy to be followed in the short term. City
strategists are nevertheless aware of the opportunities that Sichuan province offers in terms of
business prospects, with its population of over 80 million, and the strategic importance that
their pioneering role in the industry ensures them.
When it comes to Oceania and more specifically Australia, there is a latent question about the
market strategy to be developed within the Melbourne City Club. Proponents of a marketing-
oriented logic argue that the club would be better off convincing late-stage glories to come and
finish their careers here, an approach that has paid off for other Australian clubs in terms of
corporate branding. However, the current management frowned on this solution and favored
the subsidiary as a development platform.
Finally, to finish with the most obvious case, New York City was of course chosen for its city
and the demographic prospects it offers. Despite the fact that soccer has a much smaller
following than the passion found in other parts of the world, “the greater New York area is

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perhaps the most important media market in the world. It’s also the biggest population center
in the US and corporate dollars are abundant. It’s hard to imagine a better city to move into for
a European club looking to grow their global reach”152. The entry of the New York Yankees, a
local baseball team and “one of the most venerable institutions in the city”153, into the CFG's
shareholding in May 2013 proved to be strategic at a political level. The operation was supposed
to support the launch of NYCFC franchise, made official with €100 million paid directly to the
American League, by bringing its full weight to bear in negotiations. It was particularly
expected around the construction attempt of their own stadium that they still have not managed
to achieve. This setback forces them to play momentarily in the Yankee Stadium at a heavy
cost, when they do not have to relocate to make room for their hosts. Moreover, this fallback
solution does not allow them to play the exciting soccer they would like to deliver while it
largely reduces incomes related to ticketing and events organization as well as sponsorship
opportunities. It also damages their image and credibility in the eyes of American fans. This
ordeal could be coming to an end through “an agreement with New York City that would allow
the team to construct a privately financed, 25,000-seat stadium in South Bronx as part of a
development project costing more than $1 billion”154. Construction could be launched in 2022
with a move-in date of 2024, if not delayed. This promises to be a key element in the future
development of the club due to the financial impact and the commercial income it will bring.
3.5.7. Conclusion
To conclude, the City Football Group is an advanced case of a soccer club behaving like a
multinational company. This approach has undeniably resulted in economies of scope and
operational savings. The coordination between their various scouting networks and partnerships
around the world have proven to be a great help in recommending worthy players for the web
of clubs. For this, the club was able to count on competent professionals as well as inspiring
executives, aligned around the same vision: to become the greatest club in the world.
Nevertheless, it seems certain that this in-depth squad planning through the constant elaboration
of scenarios may have caused harm to the young promises of the academy. These players were
in most cases denied access to the first team in favor of more mature players bought at a high
price. It is very difficult to evaluate the possession of a competitive advantage by the group for
153 https://www.nytimes.com/2020/02/07/sports/soccer/nycfc-stadium-bronx-mls.html accessed on 3/06/2021
154 https://www.nytimes.com/2020/02/07/sports/soccer/nycfc-stadium-bronx-mls.html accessed on 3/06/2021
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the simple reason that the organization does not need them to survive or to prosper. They can
practice investment-led upgrading every year and access huge amounts of money to reshape
their team according to their needs. There is no need to make a sale, by excelling in player
trading, to build the next competitive team. Meanwhile, they can also offer above-market wages
to show themselves persuasive. In relative terms, however, our opinion is that they have
underperformed at the sport level in comparison to teams far less equipped than they are. As
far as the parent company, Manchester City, is concerned, this is especially true. Even though
the club won many trophies on the domestic front, they consistently failed on the continental
stage. They have repeatedly underperformed in the UEFA Champions League against teams
practicing Team Value Management much better than them. The recent loss in the final of the
2021 edition against Chelsea illustrates the difficulties encountered in fulfilling the proven
ambition of investors. The struggles encountered by New York City with its stadium have also
demonstrated that there is still room for improvement since the franchise will need its own
infrastructure to continue its growth. The short term goal must be to finally get a long awaited
title while extending its development in the elite players training. The equation to be solved is
also to determine if it is possible for all teams playing under the City label to benchmark with
the Guardiola Playbook given the extreme differences in levels observed with the parent team.
It is also argued that the alignment of the corporate culture and sporting identity is not as
obvious as at Red Bull GmbH155. The strength and awareness of the brand has grown
dramatically since the Emirati takeover, that is a fact. They have been able to create a certain
coherence between the sporting and commercial dimensions of their business, even though their
style of play is not as smooth and homogeneous as that of the Red Bull teams. Getting the
approval of the local authorities has not always been easy either, like in New-York, probably
also because of the country's image in terms of human rights.
When we talk about capital gains, the profitability of a model with a 20 to 50 years horizon can
be questioned. The main argument of the financial pundits is that the group's investments, even
more so when one takes into account the restructuring expenses incurred, do not come close to
the profitability of the same amount of money invested over the same period on the stock
markets. Here are the financial results obtained by this model. Manchester City, the parent
company, accumulated losses for 6 years before making a slight profit, a trend that the pandemic
is likely to halt. The multiple subsidiaries are currently achieving loss-making accounting
155https://theathletic.com/2244579/2020/12/10/cfg-manchester-new-york-city-
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deficits which "are dragging the group's overall results into the red"156. There are however
positive signals that accompany those club’s takeovers obtained at very democratic prices as
the fact that Manchester City's market share within the group is constantly reducing. The
business figures of Melbourne and New York City has doubled and tripled respectively, still
poor to compensate the amounts granted.
Nevertheless, an informed public should not deviate from the goal of the Emiratis, which is not
money but soft power, “the positive underlying direction of travel is encouraging for CFG’s
accountants and should keep MLS, UEFA and any other spending regulator off its clubs’ backs
for the foreseeable future, but it is not what gets CFG’s executives excited” 157. In addition, an
equity stake still seems to be of great interest to investors and it remains to be seen whether this
scenario could be replicated and extended to other clubs in the model. What profit could be
made from the resale of one of the entities would also be of interest if this ever happens.
3.6. Lessons from the case studies
We chose these four distinct case studies because they represented varying degrees of
complexity.
First, Leicester City, a growing club with a strong stable culture in the Other Big 5 category.
By lacking the means to compete on equal terms with its local and international rivals, the
management had to turn to a differentiation approach while tapping into alternative markets. It
proved to be very good at player trading and timing, which translated in a very strong cash
position as well as an enhanced bargaining position. The sport performance, adjusted given the
relative position against competitors, confirm the success of a strategy that works well but will
have to be confirmed in the long run if the club intends to disrupt the current hierarchy.
Secondly, Borussia Dortmund, an historical club deeply rooted in its local culture but whose
international reputation is no longer to be demonstrated, being amplified by a sound
international marketing. BVB relies on a rather young team fitting with the culture of the club
while focusing on post-formation rather than building on academies. Dortmund's high turnover
soriano/?article_source=search&search_query=part%20two%20special last accessed on 14/06/2021
soriano/?article_source=search&search_query=part%20two%20special last accessed on 14/06/2021

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contrasts with Bayern Munich's, it has to trade its players as part of its business model while
Munich can actually keep them in the long term. Management consistently hires strong
reputable coaches to deliver sport performance through a highly defined and specific style of
play. The stadium takes a key role in driving the team and ensuring consistency between image
& brand and belonging to its region. This is again a very different positioning than Munich’s
more international scope. In terms of commercial activity, Dortmund is differentiating itself by
well targeting the emerging Asian markets using highly sophisticated marketing tools.
Third, Red Bull Group, an organization that has sought to build a network of clubs around its
brand image through a style of play that is consistent with how it wants to be perceived by its
consumers. It offers a reversed case of a group where the image & brand comes first and
football becomes a means to enhance the value of the brand. Red Bull’s recruitment is focused
on two key markets : South America, and Brazil in particular, and the New-York area in the
US. The playing style of the football clubs must reflect the high energy and aggressiveness
associated with the brand while state-of-the art infrastructure is made available to support sport
performance. It translates into an aggressive trading approach in terms of team value
management by leveraging skills from the drink industry to football.
Finally, CFG, a group that has taken this idea to the extreme, considering that developing a
global brand is a key element of developing a sustainable competitive advantage, but is slow to
capitalize on the true benefits. In the meantime, it has put sport performance as a low priority
and has emphasized player trading as a major activity rather disconnected from the team’s
requirements. Sport performance and outcome of its trading activity have been disappointing
up to now.
From these business analyses, we can conclude that size and global reach in terms of access to
players and fan base for sales and marketing purposes are two essential dimensions. Someone
wishing to implement this strategy will have to make sure that the gap between the feeder clubs
and the parent team is reasonable, otherwise it will look like two parallel business plans. It is
likely that the trend towards the multiplication of soccer clubs within the same organization
will continue for reasons of profitability. Companies that want to take the plunge should
therefore focus on tapping new markets from Europe and Latin America to the US and Asia.
These practical cases allow us to confirm most of the hypotheses put forward in our model (see
figure 1.1. in Appendix 1). In the selection and recruitment process, it is important to hold a
strong network of competent partners. An arbitration could be made between the management
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of feeder clubs and the training of young people in the academy although a balanced mix
between these two policies is of course not to be excluded. This choice will be made according
to the degree of maturity at which we wish to integrate these players into the first team, in order
to minimize the cost of building a team (see figure 1.3. in Appendix 1). Later on, after a sound
team value management, it will be a question of extracting the greatest possible profits by an
excellence in the trading of the developed players. This maximization of transfer receipts will
be achieved via a perfect timing at the time of their resale. Capital is a must to carry out this
value creation stage. Substantial financial resources must be invested in players acquisition and
then in the infrastructure necessary for those players to flourish. These elements will also be
key to creating a virtuous circle between sport performance and increasing the aggregate value
of the player portfolio. Sound management of the payroll of contracted players and
commissions paid to agents should prevent clubs from getting into trouble, but is not considered
a key capability in itself. As far as the commercial part of the activities is concerned, the proper
implementation of the three previous steps should lead to a strengthening of the image and
brand provided the right identification of profitable markets. Stadium ownership emerges as a
strategic move to avoid a significant loss of the ticketing and match-day revenue stream. It will
also offer more flexibility in hosting alternative events and attracting sponsors, with external
factors such as geographical location and ease of access also coming into play, confirming that
the stadium is a key resource. The emphasis will also be on individual and collective reputation,
as clubs will have to work with their respective federations given the value placed on the
perception of these leagues abroad. These recurring revenues and margins will act as a positive
variable on the value of the brand while ensuring the structural sustainability of the club. It will
no longer have to rely on investor-led-upgrading from a donor, which is not a viable model in
the long-run.
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Conclusion
It is now time to bring together the theoretical analysis and in particular the possible key
resources and capabilities introduced in chapter 1 with the results of the statistical analysis
developed in chapter 2 as well as the outcome of the case studies presented in chapter 3.
First, it is worth noticing that we focus on a professional football club where success is
measured by value creation through the evolution of its enterprise value. Hence, we build a
model that describes the strategic drivers of enterprise value.
We focus first on sport performance and team value management and their drivers in terms of
key resources and capabilities. We also focus on the brand value and the commercial dimension
of professional football clubs which in turn we postulate are influenced by sport performance.
To be more specific, we then consider the role of infrastructure, financial resources, player
development and trading, existence of networks of partners and M&A as ultimately driving
team value performance as well as brand value and commercial activities.
As a next step, we recast this descriptive model in a strategic framework by using both the
concept of the value chain and a resource-based approach. We identify five primary activities
(Selection & Recruitment, Team Value Management, Sport Performance, Image & Brand and
Sponsorship, Merchandising & Services) and for each of them identify the possible key
resources and capabilities.
For Selection & Recruitment, the key resource identified is the development of a local and
international network in order to optimize talent spotting while the main capability will be the
development of internal skills along with a deep collaboration in terms of scouting.
For Team Value Management, the key resources are the creation of the right squad in line with
the club style and strategy and a privileged access to relevant partner clubs. The main capability
that has been underlined is the excellence in player development and player trading.
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For Sport Performance, the importance of having access to a state-of-the-art infrastructures is

viewed as a key resource to prosper, combined with the capability of adopting a playing style
and a team spirit in line with the values and identity of the club.
For Image and Brand, the key resources are the stadium, its strategic location and additional
facilities around it. The main capability is to maintain a strong coherence between sporting and
commercial dimensions while engaging a broad range of stakeholders (such as fans, local
authorities, sponsors, etc.) to create partnerships with synergies.
For Sponsorship, Merchandising & Services, we only identified capabilities. One of them
appears to be the development of the appropriate marketing mix while another one consists in
the building of an integrated experience bringing together sports, leisure and all associated
goods and services, all aligned with the values and the identity of the club.
In chapter 2, we look at the importance of these potential resources and capabilities using a data
base covering the top 125 UEFA clubs.
We first show that sport performance as measured by the UEFA score and therefore ultimately
the drivers of sport performance have a significant positive impact on the various sources of
revenue for a club.
We assume that achieving a sustainable competitive advantage must ultimately translate in

value creation for a professional soccer club and consider the enterprise value of a club as a
proxy. The results of the statistical analysis suggest that both brand value and sport performance
tend to influence the enterprise value although separating both influences is not an easy task.
We next try to identify how team value management and other drivers impact sport performance
and the market value of the players while acknowledging that sport performance and team value
of the players influence each other. The statistical analysis confirms the strong interaction
between performance and market value and suggests that excelling in trading and to some extent
infrastructure (using stadium size as a proxy) are important factors. However, other possible
drivers of team value management such as the characteristics of the team like average age or
the number of transfers do not appear to play a major role. It may be that the capabilities
required to be excellent at team value management are just poorly captured by the variables we
are using.
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If we focus on the drivers of the trading activity and its success, that we measure by the
difference between the current value of the players and their purchase cost, the analysis confirm
that it is essential to develop the right capabilities to become excellent at this activity. The key
here is not to overpay for players.
Finally, it is obvious that we cannot compare all professional football clubs with each other in
absolute terms since for instance some of them have access to simply more capital or just larger
infrastructure which are not available to others. We conduct a cluster analysis and identify four
major groups of football clubs. The first cluster which we call the Big 5 Super League includes
the largest professional football clubs, all operating in the 5 major European leagues (England,
Spain, Italy, Germany, France). A second group includes all the other clubs operating in the
Big 5 championships. The third includes nine clubs operating in minor European leagues and
all listed on the stock exchange. And finally, the last group involves all the clubs belonging to
the smaller European championships.
In chapter 3, we focus on a number of case studies. Given the growing importance of the Super
League and the latest development this year, with the possible creation of a new competition
independent from the UEFA, we focus on four specific cases in increasing order of complexity,
size and scope. We begin with Leicester, which is a member of the Big 5 championships but
not of the Super League. We then consider the case of Dortmund, a member of the Super League
but with less resources than Bayern Munich which we compared it with. We then turn our
attention to the case of the entry of Red Bull in the football industry and finish our analysis by
a discussion of Manchester City, one of the largest football organizations in the world. The
objective of this chapter is to be a lot more granular in the discussion of the key resources and
capabilities and to go beyond the statistical results of the last chapter. Ultimately, we want to
test with a different approach the possible resources and capabilities identified in chapter 1.
Leicester is an English football club that has grown significantly relatively recently but is still
not a member of the Super League. The club has been particularly successful at building a
strong and stable culture on which its whole development relies. Its capabilities are not
particularly in the areas of selection and recruitment of young players from its own academy
but mostly in the development of slightly more mature players acquired on different markets
and the optimal timing of their trading. This translates into a strong financial position giving
the club flexibility in its trading and bargaining activities. As far as its academy is concerned,
this is still very much work in progress. All these key capabilities confirm the success of a
77
strategy that has allowed the club to achieve a strong sport performance adjusted for its relative
position against its major competitors. To a large extent, the club has not yet reached the same
image, brand value and commercial revenue as the members of the Super League. These are
certainly areas where the club still needs to acquire and develop the necessary resources and
capabilities.
Dortmund has developed a very wide network of feeder clubs, partnerships and academies for
the selection and recruitment of young players. However, a detailed analysis suggests that these
key resources and capabilities have been mostly used to boost the image, the brand value and
the commercial activities of the club and not so much to feed the sport activity. The club has
developed a strong and coherent culture and image, both for sport activities and the associated
commercial ones, strongly rooted in its history and location in an old German industrial area.
This also appears in the selection of its partners such as in particular its sponsors who share the
same values and origins. Dortmund has also developed strong capabilities in selecting and
developing relatively young players and integrating them in a playing style in line with the
club’s culture. The club’s resources are certainly more limited than for instance the Bayern
Munich, which has several implications for the club’s strategy. To drive its development, the
club has become excellent at trading relatively young players, thus generating a relatively high
turnover by constantly adapting the squad. One of the key resources of the club is its stadium
and associated facilities which are an integral part of the image and culture of the club. Once
again, as in the case of Leicester, the success in the acquisition and development of the relevant
resources and capabilities translates into a strong sport performance, again on an adjusted basis
relative to a member of the Super League such as the Bayern Munich. Despite the fact that the
club cannot rival the Bayern Munich, it has created an entirely coherent culture and set of values
based on its local German roots; the profile of the fans, the composition and style of play of the
squad, its partnerships and its image are all consistent. This has not prevented the club though
to develop its presence outside of Germany and particularly in Asia to grow its fan and customer
reach.
While the case of Leicester illustrates how to progressively build the image, the brand and the
commercial activities based on the successful development of the football activities, the Red
Bull Group provide an example of the opposite process. Red Bull offers a reversed case of a
group where the image & brand developed in the drink industry comes first and is used to
leverage the entry of the group in the football industry using sport as a means to enhance the
value of the brand. The Red Bull brand is associated with high energy and some aggressiveness
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which are characteristics of its drinks. The same image was implemented when the group
entered the football industry and is reflected in all activities including its playing style again, as
in the previous example, showing the importance of the consistency between the sport and the
image and brand. The group developed skills in acquiring and transforming existing football
clubs going through a rebranding exercise and building recruitment capabilities with a particular
focus on the South-American market and the New York area. The group’s sport activities are
characterized by a team value management based on an aggressive trading approach and the
use of state-of-the-art infrastructure and support. The sport performance of the clubs showcased
by Red Bull highlights excellent and improving results over time. The group has successfully
been able to leverage its existing brand strengths and marketing capabilities in the football
industry, developing a culture aligned with its brand image.
The City Football Group illustrates a very ambitious global strategy based on the progressive
roll out of a common global brand through the acquisition and the implementation of multiple
partnerships around the globe. The main focus is on leveraging the brand for commercial
activities and the sport performance is not considered by the group to be crucial for its success,
except possibly for the parent company Manchester City. The group stresses that it considers
that developing a global brand is a key element of developing a sustainable competitive
advantage. While developing an integrated recruitment network and generating synergies
across the clubs, pure player trading is considered as an activity on its own and not exclusively
to support sport. The limited emphasis on and poor sport performance of its clubs is also
associated with a disappointing track record in terms of team value creation. The case illustrates
that sport performance is an essential pillar of commercial success and ultimately value
creation. It also shows that the whole business model must be coherent, as we have seen in the
other cases where the image, the brand, the commercial activities, the playing style, the profile
of the fans, the sponsors and the other stakeholders all need to be aligned to be successful. The
relatively poor performance up to now of the City Football Group may possibly be explained
by the nature of its owners who might have political as well as economic objectives in mind.
Both the statistical analysis and the case studies tend to confirm the importance of the key
resources and capabilities introduced in chapter 1 but our analysis certainly has limitations
which now have to be addressed. The various variables used for the statistical analysis do not
capture perfectly the different resources and capabilities previously discussed but are at best
proxies for some of them. The purpose of the case studies is precisely to go beyond these
limitations but with a very limited sample. It would be good to try to combine the two
79
approaches by considering a much broader number of cases and creating more sophisticated
measures of the resources and capabilities required to support a sustainable competitive
advantage. This could be the subject of further research.
80
Appendix
81
Appendix chapter 1 : Detailed analysis and assessment of resources, capabilities

and core competencies
Figure 1.1. : A theoretical model of the value drivers of a football club
Source : Personal analysis
Figure 1.2. : Sources of revenue
Source : based on categories identified in https://medium.com/@Thorpeskii/many-lovers-of-the-beautiful-game-

of-football-still-cant-wrap-their-heads-around-how-clubs-afford-d6a2f5c93d36 consulted on 28/03/2021
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Box 1.1 : Ownership of German football clubs
What does for instance the German “50 + 1” rule actually mean ? The “50 + 1” ownership model in a constraint
applied in principle to each professional football club of the German Bundesliga. It stipulates that half of the
shares plus one and their associated voting rights of the company have to be reserved to the clubs’ members in
any team member of the league.
Historically, German football clubs used to be fully owned by the fans in a way similar to the “socio” model
advocated in Spain which we describe below. Officially, these not-for-profit organizations were legally
recognized as registered associations and eligible for a reduced tax rate158. The emphasis was on democracy in
line with members’ associations visions. Those stakeholders used to be involved in order to mandate the
chairman and executives through elections. However, the significant growth of the Bundesliga in the mid-1990s
forced them to review and then rearrange their model into something more professional. A rule enacted in 1998
allowed clubs to offer special status to their football-related activities. This led to the conversion of these entities
into profit-making public or private limited companies. Therefore, professional German football clubs have
been given the permission to divide the stakes ownership in the hands of several entities, still given the “50 +
1” rule. In that way, members are able to maintain a high level of decision power on the club strategy. The point
is that it makes it impossible to allow a foreign private majority Investor into the championship, potentially
seeking only profits. Legally, there is at best only room for private minority investors.
Hence, the board of directors is appointed by fans who are not only consumers but also decision-makers. This
situation inevitably creates very different power dynamic compared to the rest of the world. Two typical profiles
emerge : the local businessman and the former footballer. The last option should preferably be a legend of the
club, for the sake of credibility, as he will less publicly held accountable for poor management performance.
This contrasts sharply with the lack of intimacy of directors and owners often observed in other leagues.
However, internal political struggles often emerge when it comes to designate the elected candidate and rivalries
for control are frequent. It can easily lead to bad interactions across the different levels of hierarchy. It makes
long-term scenarios and powerful executive decisions difficult while emphasizing short-term results to stay on
board. This model requires a strong leadership and personality to work.
By doing so, without any possibility of significant takeover, the model unfortunately lacks incentives for
potential foreign or even local investment. While it seems obvious that individuals would have been keen to
invest their money in exchange for control, it remains to be proved in the case of private minority investment.
It creates without any doubt a limitation to growth and development. In terms of funding, the main result is that
value has to be generated through a sustained organic revenue surplus. This complexifies the management of
German clubs, an aspect which we explore later on in some case studies in chapter 3.
However, it is worthwhile to note that we find exceptions to the rule. VFL Wolfsburg and Bayer Leverkusen
are privately and totally majority owned respectively by the automotive giant Volkswagen and the
pharmaceutical company Bayer. This is due to historical reasons since those teams were representative of the
working class and the corporations, though now international, remain well locally implemented in the region.
TSG Hoffenheim is another special case. It can even be branded a success story since the entity was a modest
fifth division club until a fan and former youth player, Dietmar Hopp, decided to invest his money in it. This
billionaire was actually the co-founder of SAP, the software provider company. In just over twenty years, Hopp
continuously managed to offer financial support promotion after promotion in order to get access to the top
flight and stabilize it at the top of the table. He has therefore well conducted his project while the team is now
a Champions League regular contender. This is why he was given the right to take private majority ownership.
Last but not least, RB Leipzig is the most recent and disruptive case to study. They are officially and legally
member-owned since they managed to circumvent the rules. In the same way as they did with the ban on a club
bearing the name of a company. The organization employs a reduced and closed number of twenty-one
members, most of them being employed by the foreign private majority owner : The Austrian Red Bull Group.
A whole analysis of their situation will be made further.
158KPMG Football Benchmark : Football Benchmark - The 50+1 rule in the Bundesliga – Strength or weakness?
Last consulted on 30/06/2021
83
Those clubs are generally accused to be artificially created clubs by traditional fans. Those are protesting against
unfair competition and loss of traditional values. They argue that there is a contempt for the connection between
fans and the institution. This is the reason why some voices have been raised to change the current model.
This system partly explains why it was unthinkable for German clubs Bayern Munich and Borussia Dortmund
to join the failed attempt to create a Super League between the elite most powerful clubs in European football.
It just wasn't possible without the approval of the supporters. Their anger would have been terrible for the
persons in charge who were given a taste of the protests that would await them.
Box 1.2 : Ownership of Spanish football clubs

The Spanish model is also recognized for its uniqueness and complexity. The overwhelming majority of clubs
in the country had established a management system called the socio-model until a law came into effect that
disrupted the political environment. This law, entitled Ley 10/1990 del Deporte, imposed on all sports
organizations, including soccer clubs, forced them to modify their articles of associations. This meant giving
investors the opportunity to acquire an ownership stake in the clubs, possibly even via the stock market. To
prevent this, four major clubs had the possibility to turn themselves into privately-owned S.A.D.s/PLCs. As a
matter of facts, being a Sociedad Anonima Deportiva is the Spanish equivalent of a Public Limited Company.
This rule was to be implemented with almost immediate effect as entities had to comply with it as from June
1992, since non-compliance would have meant fines and non-participation to the 1992-1993 season of the
Spanish competition. To make matters more complicated, the appearance of the Seventh Additional Provision
of the law could allow some clubs to potentially circumvent it. 4 clubs were meeting this condition i.e. they had
consistently made a profit during the five previous accounting years. After undergoing a thorough check by the
Liga de Fútbol Professional (LFP), Real Madrid CF, FC Barcelona, Athletic Club Bilbao, and Club Atlético
Osasuna, received the green light from the federation to continue operating as member-owned non-profit sports
associations. These companies applying tailored governance rules due to their sport-oriented purpose benefit
from advantageous interest rates on their borrowings as a result of their supposedly not-for-profit organization.
What is true of their relationship with the banks is also true of their relationship with the state, since the
government also provides loans, especially to enable them to survive in case of bankruptcy risk. Their associated
activities related to less popular and revenue generating sports also benefit from this situation. Part of the
rationale for these advantages may rely on the non-payment of dividends as well as the reinvestment of cash
flow into the firm. However, this also has reverse implications as the club is unable to raise money including
via the stock market and has as sole option to leverage its core revenue generating activities to fund its projects.
The few possible alternatives available to them would run the risk of contravening the rules laid down by the
Financial Fair Play rules.
In terms of the political organization chart, these particular cases therefore operate with an elected president
who is not the owner of the ship. Club members receive voting privileges in exchange for an annual club fee
while also gaining discounts on match tickets and a highly symbolic sense of belonging to the daily management
of the club. It is important to note that Real Madrid, FC Barcelona and Athletic Bilbao all have a very important
place in their respective communities due to their “special cultural and nationalistic significance for the ethnic
groups”159. This argument is often taken up in the speeches of election candidates who advocate to their voters
the choice of tradition and sometimes conservatism, even possibly going so far as to encourage populism or
nationalism. The downside of this power battle between egos is that it often leads to institutional instability.
This quest towards individual ambitions, which takes place at the ballot box every 4 years, is that it prevents
any stability in the leadership. This can damage the performance of the organization as well as the image and
credibility of the institution. It may also force competing participants to make promises that they cannot
reasonably keep, such as signing expensive star players, and to the blurring of relationships with other
stakeholders. Despite all the values of democracy that such a system promotes, the decision-making held by the
socios comes to a virtual standstill after the presidential election for the benefit of the winner and his team.
Their meager voice gives them a say in the composition of the annual budget, but again they must rely on elected
officials to speak for them at the General Assembly. Their commitment is therefore much weaker than it would
be if the company went public and makes it impossible for them to object to a non-consensual expenditure.
Last but not least, critics of this model also point to the encouragement of elitism and nepotism in key positions.
According to the Seventh Additional Provision of Ley 10/1990 del Deporte, the elected president and his team
of directors must be able to provide significant financial guarantees, i.e. a provision of 15% of the projected
159 https://bleacherreport.com/articles/404511-cure-or-curse-socio-club-ownerships-in-spanish-la-liga accessed on 5/06/2021

84
annual budget, in order to access their responsibilities. This significant involvement is taken to prevent
negligence and ensure the sustainability of the institution in the event of cash flow problems. On the contrary,
some argues that it only makes these wealthy individuals more untouchable while reinforcing their sense of
impunity and diminishing their incentive for transparency. On top of that, they can count on the power of allied
media to propagate their views and deliberately disclose strategic information for political calculations, which
does not help to distinguish truth from falsehood.
To conclude, the member-club model can to a certain extent be considered as a competitive disadvantage when
compared to the way other big clubs operate in more flexible leagues. On the other hand, a move away from it
could expose them to a hostile takeover and the ensuing loss of identity. Some clubs, namely Real Madrid and
Barcelona, would have allegedly expressed interest in changing status and this perspective could alert many
since “both are huge brands, have marketability, large global fan base and assets making them very attractive”160.
Figure 1.3. : The trade-off between acquiring mature players and developing young
talents
Box 1.3. : A simple model of the trade-off between acquiring mature players and
developing young talents
The basic idea of our simple model is that training and developing a player involves costs and risk-management
such as uncertainty about the ultimate quality of the individual and the risk of dropping out during the education
process. As a matter of fact, buying an older, more mature player is less risky since he progressively builds a
track record but the acquisition cost is simultaneously increasing as well. There is thus a balance to be found
between the two aspects. As a consequence, some clubs may develop capabilities to scout young players and
160 https://bleacherreport.com/articles/404511-cure-or-curse-socio-club-ownerships-in-spanish-la-liga accessed on 5/06/2021

85
train them well while others may focus on acquiring skills and a network to select more mature players and
become good traders.
• More formally, if we consider a player today and t the number of years he has been with the club
• We introduce three parameters; a is associated with the acquisition costs, e is the cost of training and
u a measure of the uncertainty about the ultimate skills of a player or the risk that he drops out
• For illustration purposes suppose for simplicity that total cost is given by:
𝑎
𝐶 = +(𝑢 + 𝑒)t
𝑡
• from which we can derive the optimal recruitment strategy that minimizes total cost of a club,
𝑎
𝑡 ∗ =√ 𝑎𝑛𝑑 𝐶 ∗ =2√𝑎(𝑢 + 𝑒)
𝑢+𝑒
• some clubs could thus focus on younger players and others on trading more experienced players with
a proven track record. Clubs must develop core competencies in this selection areas but may focus on
different approaches depending on their relative skills versus other clubs.
Figure 1.4. : From resources and capabilities to performance
Source : adapted from Nguyen (2021)
https://www.slideshare.net/DrLamDNguyen/chapter-3-the-internal-organization-resources-capabilities-core-
competencies-and-competitive-advantages last consulted on 29/06/2021
86
Figure 1.5. : Value Chain of a professional football club
Source : Vas (2020) page 103, Porter’s Value Chain adapted to a professional football club
Table 1.1. : Selection and Recruitment - Resources

87
Table 1.2. : Selection and Recruitment - Capabilities
Table 1.3. : Team Value Management - Resources

88
Table 1.4. : Team Value Management - Capabilities
Table 1.5. : Sport Performance - Resources

89
Table 1.6. : Sport Performance - Capabilities
Table 1.7. : Image and Brand - Resources

90
Table 1.8. : Image and Brand - Capabilities
Table 1.9. : Sponsoring, Merchandising and Services - Resources

91
Table 1.10. : Sponsoring, Merchandising and Services - Capabilities
Figure 1.6. : Drivers of image and brand

92
Figure 1.7. : Selection and Recruitment: Resources, Capabilities and Core Competencies
Source : Based on table 1.1. to 1.10.
Figure 1.8. : Team Value Management: Resources, Capabilities and Core Competencies

93
Figure 1.9. : Sport Performance: Resources, Capabilities and Core Competencies
Figure 1.10. : Image and brand: Resources, Capabilities and Core Competencies

94
Figure 1.11. : Sponsors, Merchandising and Services: Resources, Capabilities and Core
Competencies
Figure 1.12. : The emergence of super clubs
Source : Andrews (2015)

95
96
Appendix chapter 2 : Detailed statistical results
Table 2.1. : Description of the main database
The dataset includes the top 125 UEFA clubs based on their ranking at the end of 2020 for
which a number of variables have been constructed from various sources. Some analysis in
chapter 2 are based on a subset of clubs because of missing data.
Variable Name used in the document and comments Source Date

position UEFA ranking UEFA https://www.uefa.com/ 17-12-20
club club name UEFA https://www.uefa.com/ 17-12-20
Country National championship UEFA https://www.uefa.com/ 17-12-20
score_16_17 UEFA score season 2016-2017 UEFA https://www.uefa.com/ 17-12-20
Score_tot UEFA score UEFA https://www.uefa.com/ 17-12-20
nat_ass_contrib National association contribution factor UEFA https://www.uefa.com/ 17-12-20
club_brand_value_top50 club brand score (1 to 50) Brand Finance Brand Finance (2020) 2020
club_brand_strength_top50 club brand strength (1 to 50) Brand Finance Brand Finance (2020) 2020
Enterprise value ranking EV score (1 to 50) (EV = Entreprise Value) Brand Finance Brand Finance (2020) 2020
mv_players_meur MV players (MEUR) (MV = market value of the team) Transfermarkt https://www.transfermarkt.com/ 14-02-21
pur_value_meur Purchase value (MEUR) Transfermarkt https://www.transfermarkt.com/ 14-02-21
avg_age_at_signing Average age of the team at signing Transfermarkt https://www.transfermarkt.com/ 14-02-21
squad_size Squad size Transfermarkt https://www.transfermarkt.com/ 14-02-21
avg_age Average age of the team Transfermarkt https://www.transfermarkt.com/ 14-02-21
mv_top_18_meur MV of the top 18 players (MEUR) Transfermarkt https://www.transfermarkt.com/ 14-02-21
trans_arr_nb_19_20 Number of transfers (in) season 2019-2020 Transfermarkt https://www.transfermarkt.com/ 14-02-21
trans_arr_val_19_20 Value of transfers (in) season 2019-2020 (MEUR) Transfermarkt https://www.transfermarkt.com/ 14-02-21
trans_dep_nb_19_20 Number of transfers (out) season 2019-2020 Transfermarkt https://www.transfermarkt.com/ 14-02-21
trans_dep_val_19_20 Value of transfers (out) season 2019-2020 (MEUR) Transfermarkt https://www.transfermarkt.com/ 14-02-21
Stadium capacity Stadium capacity Transfermarkt https://www.transfermarkt.com/ 14-02-21
construction_costs Construction cost of the stadium (MEUR) Transfermarkt https://www.transfermarkt.com/ 14-02-21
Listed Listed (1 if club listed, 0 otherwise) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Currency Currency Yahoo Finance https://finance.yahoo.com/ 13-02-21
FX rate Exchange rate Yahoo Finance https://finance.yahoo.com/ 13-02-21
Market Cap Market capitalisation (in M units of local currency) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Market cap eur Market capitalisation (in MEUR) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Total Debt Total interest bearing debt (in M units of local currency) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Total debt eur Total interest bearing debt (in MEUR) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Net Debt Net debt (Total debt less cash in M units of local currency) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Net debt eur Net debt (Total debt less cash in MEUR) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Asset value eur Asset value or EV = Market capitalization + Net debt (MEUR) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Net debt/asset value Net debt/asset value Yahoo Finance https://finance.yahoo.com/ 13-02-21
Revenue Revenue (in M units local currency) Yahoo Finance https://finance.yahoo.com/ 13-02-21
Revenue eur Revenue (in MEUR) Yahoo Finance https://finance.yahoo.com/ 13-02-21
EBITDA EBITDA (in M units local currency) Yahoo Finance https://finance.yahoo.com/ 13-02-21
EBITDA eur EBITDA (in MEUR) Yahoo Finance https://finance.yahoo.com/ 13-02-21
EV KPMG EV KPMG (MEUR) KPMG KPMG Sports Advisory Practice (2020) 2020
Figure 2.1.: World's most popular sports

Football (soccer)
Basketball
Tennis
Cricket
Formula 1
Baseball
Athletics
American football
Boxing
Golf
Ice hockey
Volleyball
Badminton
Cycling
Rugby Union
Mixed martial arts
Swimming
Snooker
Moto GP/Motorbike
Field hockey
0 500 1000 1500 2000 2500 3000 3500

97
Figure 2.2.: Revenue of the 'Big Five' European soccer leagues

1996-2020 (in MEUR)
7.000
6.000
5.000
4.000
3.000
2.000
1.000
England Italy Germany Spain France
Figure 2.3. : Revenue 2018/19 (MEUR)

FC Barcelona
Real Madrid
Manchester United
Bayern Munich
Paris Saint-Germain
Manchester City
Liverpool FC
Tottenham Hotspur
Chelsea FC
Juventus Turin
Arsenal FC
Borussia Dortmund
Atlético Madrid
Internazionale Milan
Schalke 04
AS Roma
Olympique Lyonnais
West Ham United
Everton
Napoli
0, 100, 200, 300, 400, 500, 600, 700, 800, 900,

98
Figure 2.4. : Revenue breakdown top 20: by

category (2018-2019)
FC Barcelona
Real Madrid
Manchester United
Bayern Munich
Paris Saint-Germain
Manchester City
Liverpool
Tottenham Hotspur
Chelsea
Juventus
Arsenal
Borussia Dortmund
Atlético de Madrid
FC Internazionale Milano
Schalke 04
AS Roma
Olympique Lyonnais
West Ham United
Everton
SSC Napoli
0% 20% 40% 60% 80% 100%
Broadcasting Commercial Matchday
Figure 2.5. : Impact of club size on revenue breakdown (2018-2019)

99
Table 2.2. : Impact of sport performance on revenues
Note : Estimation method: seemingly unrelated regressions (SUR)
Source : main database

100
Figure 2.6. :
Figure 2.6. : Brand value in 2020 (MUSD)
Real Madrid CF
FC Barcelona
Manchester United
Liverpool FC
Manchester City FC
FC Bayern München
Paris Saint-Germain FC
Chelsea FC
Tottenham Hotspur FC
Arsenal FC
0 200 400 600 800 1.000 1.200 1.400 1.600 1.800
Figure 2.7. : Brand value and brand strength

60
50 Real Madrid
R² = 0,65 Manchester United
Barcelona
Liverpool
Manchester City
Bayern München
PSG
Chelsea
Tottenham
Brand value score (1 to 50)
Arsenal
40 Borussia Dortmund
Juventus
Atlético Madrid
Inter Milano
RB Leipzig
Leicester City
Schalke 04
Everton
Wolverhampton
30 Borussia Mönchengladbach
AC Milan
Bayer Leverkusen
Wolfsburg
West Ham
AS Roma
Ajax
SSC Napoli
Olympique Lyonnais
20 Burnley
Sevilla
Eintracht Frankfurt
Southampton
Valencia
Köln
Olympique Marseille
Athletic Club
10 TSG Hoffenheim
Lazio
Villarreal
Benfica
Celtic
Zenit
Real Betis
0
0 5 10 15 20 25 30 35 40 45 50
Brand strength score (1 to 50)
Figure 2.8. : Entreprise and brand value scores

60
50 Real Madrid
R² = 0,71 Manchester United
Liverpool
Barcelona
PSG
Bayern München
Manchester City
Chelsea
Tottenham
Juventus
40 Arsenal
Borussia Dortmund
Inter Milano
Entreprise value score (1 to 50)
Atlético Madrid
Schalke 04
Everton
Zenit
Leicester City
Wolverhampton
RB Leipzig
30 West Ham
Wolfsburg
Olympique Lyonnais
Borussia Mönchengladbach
Valencia
Benfica
Southampton
SSC Napoli
20 Bayer Leverkusen
TSG Hoffenheim
Burnley
Sevilla
Eintracht Frankfurt
AS Roma
Ajax
10 Celtic
AC Milan
Villarreal
Köln
Real Betis
Athletic Club
Olympique Marseille
Lazio
0
0 10 20 30 40 50 60
Brand value score (1 to 50)
101
Figure 2.9. : UEFA score and team value
140
Bayern München
Barcelona
120
Juventus Real Madrid
R² = 0,61 Atlético Madrid
Manchester City
PSG
100
Sevilla Manchester United
Liverpool
Arsenal
Borussia Dortmund
Chelsea
Tottenham
80
UEFA score
Olympique Lyonnais
AS Roma
Ajax SSC Napoli
RB Leipzig
60
Benfica Bayer Leverkusen
Inter Milano
Zenit
Lazio
Villarreal
40 Valencia
CelticSchalke 04 Eintracht Frankfurt Borussia Mönchengladbach

Leicester City
Olympique Marseille AC Milan
TSG Hoffenheim
20 Athletic Club
Wolverhampton
Wolfsburg
Real Betis
Southampton
Köln Everton
Burnley West Ham
0
0 200 400 600 800 1.000 1.200
Team value (MEUR)
Figure 2.10. : EV KPMG and EV based on market capitalisation

4.000
3.500
3.000
R² = 0,94
EV KMPG (MEUR)
2.500
2.000
1.500
1.000
500
0
0 500 1.000 1.500 2.000 2.500 3.000
EV based on market capitalization (MEUR)
102
Table 2.3.: Impact of brand value and sport performance on Enterprise value (Brand Finance
data)
Source : Main database
Table 2.4.: Impact of brand value and sport performance on Entreprise value (KPMG data)

103
Table 2.5.: Team values and team management variables
Source Main database
Figure 2.11. : The hypothesized model of the drivers of UEFA score and MV players

104
Table 2.6.: Drivers of UEFA scores and Team value
Test of the assumptions that all team value management variables are equal to zero : F( 6, 110) =
0.53, p-value = 0.784
Test of the assumptions that there is no difference across championships (MV players) : F( 5, 110) =
6.18, p-value = 0.000
Test of the assumptions that there is no difference across championships (UEFA score): F( 5, 117) =
19.02, p-value = 0.000
Figure 2.12 : Possible drivers of team value gains

105
Table 2.7.: Drivers gain on the team value
Table 2.8. : Cluster analysis – Methodological note
• Source : Mooi et al. (2018) chapter 9
• Hierarchical clustering method : Ward’s linkage and Gower’s distance measure
• Selection of the number of cluster based on three criteria : Calinski-Harabasz pseudo-

F, Duda-Hart index and pseudo T-squared
• Criteria lead to the selection of 4 clusters
• Robustness of the solution obtained by applying a k-means partioning method using the
outcome of the previous method as initial allocation to the algorithm
• The two methods yield the same cluster allocation except for 9 clubs (out of 125) which
are moved from the super-league to the other big-5 cluster. They are indicated with a
star in the table below.
• The final analysis is based on the outcome of the hierarchical clustering method.
106
Figure 2.13. : Cluster analysis – Dendrogram
Table 2.9.: Classification of clubs in the four selected clusters

107
Table 2.10.: Analysis of differences across the four clusters

108
Appendix chapter 3 : selected information of the clubs analyzed
Table 3.1. : Leicester City - Club description, championship and history
Nickname The Foxes

Ownership status Foreign Private Majority Investor
Owners country of origin Thailand
Listed No
Takeover Yes
Ground Stadium King Power Stadium
Stadium Naming YES
Main Sponsors King Power (investor company ownership);
Tourism Authority of Thailand
Main achievements : track record 1 Premier League Title (English First Division)
(2016)
7 Championships Titles (English Second
Division) (joint record) (1925, 1937, 1954, 1957,
1971, 1980, 2014)
1 League One Championship (English Third
Division) (2009)
3 EFL Cups (1964, 1997, 2000)
1 Community Shield (1971)
UEFA Ranking (December 2020) 49th
Category Big Five - Other
Purchase value of players (February 2021) €311 million
Team value (February 2021) €469 million
Table 3.2. : Borussia Dortmund - Club description, championship and history
Nickname Die Borussen, The Black and Yellows

Ownership status German “50+1” model
Owners country of origin Germany
Listed Yes
Takeover No
Ground Signal Iduna Park
NAMING YES
Main Sponsors Evonik, Signal Iduna, 1&1
Main achievements : track record 8 German Championships (1956, 1957, 1963,
1995, 1996, 2002, 2011, 2012)
4 cup victories (1965, 1989, 2012, 2017)
1st German club to win the European Cup
Winners Cup (1966)
1 UEFA Champions League (1997)
Category Super League
109
Table 3.3. : Bayern Munich - Club description, championship and history
Nickname The Rekordmeister, The Bavarians

Ownership status German “50+1” model
Owners country of origin Germany
Listed No
Takeover No
Ground Allianz Arena
NAMING YES
Main Sponsors Allianz, Deutsche Telekom
Main achievements : track record 31 German Championships
20 cup victories
3 European Champion’s club cup
3 UEFA Champions League
2 FIFA club world cup
UEFA Ranking (December 2020) 1st
110
Box 3.1. : Borussia Dortmund – Some key academy partners
Dortmund Soccer Academy in Japan in partnership with DSA 161 : 45 locations training over 600 pupils
supervised by 20 employees, 15 full-time coaches, two part-time coaches and two office workers.
BVB International Academy in America : collaboration between BVB, Youth Soccer International Academy
and Puma to launch the BVB International Academy. The ten training centers stand as an answer to the
increasing demand and interest in soccer in the United States. The club decided to build on the recent successes
of Christian Pulisic162 and Giovanni Reyna163 to emphasize the possible success on the way to a professional
career. It is more or less the only partnership which has had an impact on their selection and recruitment through
real findings for the first team, proving the emergence of this labor market.
Marconi Stallions Football Club in Sidney, Australia : training sessions and coaching workshops held by BVB
experienced representatives to improve the talent development system of club Marconi. The most promising
youth players receive the opportunity to travel to Germany for a trial period at the parent academy.
Buriram United Football Club in Thailand : Possibility of trials and access to Black and Yellow cultural
programme.
Huya Football Club owned by HUPU Sports Shanghai Media Co. : The Chinese online community for sports,
games, entertainment and e-commerce164 is a subsidiary of a company called ByteDance Ltd. which is the
creator of the social network TikTok. ByteDance, already an official global partner of the National Basketball
Association (NBA), has favored to be listed in US to reach a higher stock exchange valuation. HUPU, for its
part, had previously put sporting events in place and partnered with another football club, namely AC Milan.
The partnership with Dortmund includes agreements on weekly training session with the Elite-teams of Huya
Football Club coordinated by BVB-coaches, regular coach-to-coach clinics and common organization of
football events165.
Iwate Grulla Morioka is a Japanese youth academy active in the J-league third tier. It is partnering with
Dortmund Soccer Academy, a local franchise which belongs to the same parent company NOVA Holdings 166,
hence creating synergies . Top European coaches are sent in Morioka while top elite players are received in
Germany for trial in exchange.
Lukasz Piszczek’ BVB Academy in Poland : Lukasz Piszczek is a Borussia Dortmund player and former
international footballer who played 66 times for the Polish national team. He will stop his professional career
at the end of the season to join his native Poland and most notably the club of his youth LKS Goczałkowice-
Zdrój now active in fourth division. Lukasz always maintained his strong attachment to a club where his father
is known for his vice-president role167. Borussia Dortmund offers supports to the Łukasz Piszczek Foundation,
which has its own state-of-the art facilities and Sporting Director, through its expertise but also name and usage
rights. The counterpart lies in the fact that “the foundation runs non-commercial courses (and as far as legally
possible) commercial vacation courses on behalf of BVB in Poland on a non-exclusive basis”168.
Academia Borussia is helping a German School in Mexico City supported by the BVB foundation
German School Shanghai technical partner of the BVB Evonik Football Academy : Over 200 students receive
BVB-ground rules teaching while philosophy advocates organize coaching seminars in two locations.
161 http://www.dsa.or.jp/design/english/ accessed on 23/06/2021

162 https://www.transfermarkt.com/christian-pulisic/profil/spieler/315779 accessed on 23/06/2021
163 https://www.transfermarkt.com/giovanni-reyna/profil/spieler/504215 accessed on 23/06/2021
164
https://www.bloomberg.com/news/articles/2020-05-14/tiktok-owner-backed-hupu-said-to-seek-100-million-in-new-round
166 https://nova-holdings.jp/hd_en/?page=sports_dsa accessed on 23/06/2021
167 https://www.bundesliga.com/en/news/Bundesliga/borussia-dortmund-lukasz-piszczek-coaching-at-polish-club-injury-461812.jsp
111
Table 3.4. : Red Bull Group - Clubs description, championships and history
Nickname Die Roten Bullen (The Red Bulls)

Ownership status Local or Foreign Private Majority Investor
Owners country of origin Austria
Listed No
Takeover Yes
Ground Red Bull Arena
NAMING YES
Main Sponsors Red Bull GmbH
Main achievements : track record
RB Leipzig (RBL) : Bundesliga Runners-up (2017, 2021)
DFB-Pokal Runners-up (2019, 2021)
UEFA Champions League Semi-finalists (2020)
RB Salzburg (RBS) : 15 Austrian Bundesliga titles
(including 8 in a row, ongoing series)
8 Austrian Cup titles
(including as many cup-championship doubles)
New-York Red Bulls Most points and wins in a regular season (2018)
UEFA Ranking (December 2020) RB Leipzig : 21th
RB Salzburg : 22th
Category Big Five - Other
Purchase value of players (February 2021) €179 million (RBL) – €42 million (RBS)
Team value (February 2021) €559 million (RBL) - €148 million (RBS)
Figure 3.1.: Organization structure of the Red Bull football division
Source : https://medium.com/box-2-box-eng/together-were-stronger-the-synergy-of-red-bull-
football-teams-cef1df4c6e7c169
169 last accessed on 9/06/2021

112
Box 3.2. : Red Bull – Some examples of collaborations, transfers and synergies within the group
Collaborations at professional level are also notified through exchanges between elite clubs. According to the
article Together we’re stronger: the synergy of Red Bull football teams170, 25 players had moved from one Red
Bull stable to another in the space of 5 years. This calculation extends from the 2014-2015 season to the end of
November 2020, just before the opening of the winter transfer window of the 2020-2021 season. Those figures
were only applied to transfers between major RB clubs, otherwise it would bring the numbers up to a hundred.
This average of 4 moves per season implied the following balance of payments :
➢ Exchanges from RB Salzburg to RB Leipzig : 16 players for an amount of €90,5 million

➢ Exchanges from New York RB to RB Leipzig : 1 player for an amount of €2,63 million
➢ Exchanges from RB Leipzig to Salzburg : 6 players for an amount of €900 thousand
➢ Exchanges from RB Leipzig to New York RB : 1 player sent on loan
➢ Exchanges from RB Leipzig to RB Bragantino: 1 player sent on loan
Table 3.5. : City Football Group - Clubs description, championships and history
Nickname City, The Citizens, The Sky Blues

Ownership status Foreign Private Majority Investor
Owners country of origin United Arab Emirates
Listed No
Takeover Yes
Ground Etihad Stadium
NAMING YES
Main Sponsors Etihad Airways, Etisalat, Visit Abu Dhabi, Nissan
Main achievements : track record 7 Premier League Titles (English First Division)
(1937, 1968, 2012, 2014, 2018, 2019, 2021)
7 Championships Titles (English Second
Division) (joint record) (1899, 1903, 1910, 1928,
1947, 1966, 2002)
6 FA Cups (1904, 1934, 1956,1969, 2011, 2019)
8 EFL Cups (joint record) ( 1970, 1976, 2014,
2016, 2018, 2019, 2020, 2021)
6 Community Shields (1937, 1968, 1972, 2012,
2018, 2019)
Team value (February 2021) €1.060 million
170https://medium.com/box-2-box-eng/together-were-stronger-the-synergy-of-red-bull-football-teams-cef1df4c6e7c last accessed on

9/06/2021
113
Figure 3.2.: Organigramme of City Football Group
Manchester City
New York City Mumbai City Melbourne City Montevideo City Torque
Yokohama F. Marinos Lommel SK Sichuan Jiuniu ESTAC Troyes Girona FC
Note : All those clubs fulfill not the same function and may not have the same importance.

114
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"Winning Team Value Strategies of Professional

Football Clubs : A Resource-Based Approach"

CITE THIS VERSION

Available at: http://hdl.handle.net/2078.1/thesis:31052 [Downloaded 2024/03/18 at 15:56:31 ]

3.3.5. Image and Brand................................................................................................................. 39

Winning Team Value Strategies of

In chapter 3, we take a different approach to complement the statistical analysis by developing

Chapter 1: Theoretical Framework

competitions. More opportunistically, this move allowed Nasser Al-Khelaifi5, President of

5 https://www.transfermarkt.com/nasser-ghanim-al-khelaifi/profil/trainer/23714 accessed on 14/06/2021

its-core/?article_source=search&search_query=explained%20super%20l accessed on 15/06/2021

likely accessed on 15/06/2021

1.2. Modelling a soccer club and its key value drivers

1.2.1. The model

1.2.2. Sources of Revenue

14 McKinsey & Company (2020)

1.2.3. Club ownership

1.2.4. Organic vs acquisition of players

1.3. A strategic framework: Resource-based analysis and value chain

1.3.1. Conceptual framework

understand what a company must achieve to be successful. A particularly useful approach is to

coherent brand identity, accountability, collaboration, learning, leadership, customer

1.3.2. Applying the strategic framework to the soccer industry

Selection & Recruitment :

Table 1.11 : Key Resources and Capabilities by Major Activity

Team Value Management • Investment or agreements with • Development of players under

Team Value Management22

22 McKinsey & Company (2020)

Image and brand :

Sponsoring, Merchandising and Services

summarizes this analysis. He stresses the importance of adaptive learning on developing

Chapter 2: Empirical Analysis

2.2. The football industry and its development over time

26 https://www.statista.com/statistics/261218/big-five-european-soccer-leagues-revenue/ last accessed on 27/06/2021

2.3. An analysis of football clubs revenues

As shown in figure 2.529 in Appendix 2, broadcasting represents on average 44% of revenue,

27 https://www.statista.com/statistics/271636/revenue-distribution-of-top-20-european-soccer-clubs/ last accessed on 27/06/2021

2.4. A statistical analysis of value drivers

31Source : Main database

34 https://www.statista.com/statistics/234493/football-clubs-in-europe-by-brand-value/ last accessed on 27/06/2021

2.6. Classifying the top 125 clubs: a cluster analysis

Chapter 3: Analysis of Some Selected Case Studies

3.2.2. Selection and Recruitment

40 https://theathletic.com/ last accessed on 4/07/2021

of work. The consistent productivity of a recruitment policy embedded in a long-term oriented

43 https://www.transfermarkt.com/jon-rudkin/profil/trainer/6626 accessed on 8/06/2021

3.2.3 Team Value Management

51 https://theathletic.co.uk/2177321/2020/11/03/leicester-recruitment-secrets/ last accessed on 8/06/2021

3.2.4. Sport Performance

3.2.5. Image and Brand, Sponsoring, Merchandising and Services

3.3. Borussia Dortmund

53 https://www.transfermarkt.com/thomas-tress/profil/trainer/29401 accessed on 23/06/2021

3.3.2. Selection and Recruitment

57 https://www.transfermarkt.com/michael-zorc/profil/trainer/3295 accessed on 23/06/2021

3.3.3. Team Value Management

/view/news/380359 accessed on 23/06/2021

57241762 accessed on 23/06/2021

67 https://aktie.bvb.de/eng/BVB-at-a-glance/Strategy2 accessed on 23/06/2021