Futbol Club Barcelona, familiarly known as Barça, is one of the most successful soccer clubs in history and it has dominated the world soccer scene for the past 10 years. Many would attribute this success to the rise of Messi, but in reality this is only a part of the story and the lion’s share of the rise of Barça stems from the exploitation of a business model that utilizes the club’s history and its idiosyncratic view of the game to capture value and win championships.
The Business Model
Barça, as a private entity wholly owned by its fans, has a rather unique business model where it captures value not by maximizing returns to its shareholders but by winning the championships its fans covet. Hence, Barça as a club and an entity, exists solely to provide entertainment to its fans and in order to do this it needs the resources to maintain a competitive style of play that allows it to edge the likes of Real Madrid, Manchester United and Bayern Munich in the pursuit of footballing supremacy.
The Operating Model
Barça successfully deploys its assets in the pursuit of value through the following channels:
- The club uses its long history and success to create deep bonds with its fans and build its brand across the world. This brand loyalty in turn facilitates the consumption of related merchandise that makes use of Barcelona’s image and further promotes the club to those who are not familiar with it.
- The club has a strong internal culture that aligns its style of play vertically from the youth teams to the senior squad. This facilitates the development of top talent – i.e. Messi, Puyol, Iniesta, Busquets, Xavi, Alba, Valdez, Pique, etc. – while at the same time giving the club cohesion and a particular play identity that is easily recognizable by fans. This, in conjunction with successful leveraging of the club’s history, constitutes the entity’s ethos and it also provides the Barça with a steady stream of top talent that it can either promote to its senior squad or sell to other teams for cash.
- Barcelona complements its home-grown talent with acquisitions of top talent from around the world. In the past three years, the club has signed both Neymar and Luis Suarez and these two players have combined with Messi to create the most lethal attacking trio in the history of the game. Before them, Barcelona bought stars like Kubala, Cruyff, Neeskens Maradona, Laudrup, Romario, Rivaldo and Ronaldinho; the result being that these acquisitions have not only led to on-pitch success but also expanded the reach of Barcelona’s brand by facilitating access to these players home markets.
- Barcelona exploits this brand loyalty and the allure of its mythology to secure favorable marketing arrangements with leading firms as well as securing better economic terms from its broadcasters. This commercial arrangements provide the club with the cash it needs to fund its internal operations as well as to acquire top players from other teams.
- The club utilizes its training season as a promotional aid that expands the reach of the team to territories where it doesn’t normally play. Hence, the club utilizes its off season to schedule friendly matches in Asia and North America, receiving significant compensation per match played as well as furthering its marketing goals.
How it All Comes Together
As mentioned above, Barça’s end goal is not to turn a profit but to win tittles and this is the reason why it needs to maximize its revenues. The club’s success has been entirely reliant on its ability to leverage its assets (history, culture, players, brand and size) through its daily operations to derive the revenues it requires to fund itself and acquire top talent from other clubs; this has led to spectacular results both on the field and off of it resulting in revenues of over $700 million per year, a valuation north of $3 billion and winning 4 UEFA Champions Leagues, 7 Spanish Leagues, 3 King’s Cups, 6 Spanish Supercups, 3 European Supercups and 2 FIFA Club World Cups in the past 10 years.
The Second Treble