Television rights, merchandising and sponsorships are concepts that have crept into football vocabulary in recent years. For some time now, winning in sports, while still important, is not everything for the top-flight clubs. In the paper "Características estructurales de un club de fútbol profesional de elite" ("Structural Characteristics of a Top-Flight Football Club"), IESE Professor Sandalio Gómez and research assistant Magdalena Opazo show how the arrival of these revenue sources requires the clubs to be more professionally managed. Decisions can no longer be made from the perspective of a sports fan or a devotee of certain team colors. In this increasingly challenging environment, it is paramount to be professional, which means bringing management experts on board, specifically defining job functions and placing greater emphasis on how the organization operates.
Revenues earned on game day are no longer the clubs? main assets. If we look at the top 15 European teams on the 2007 Deloitte Football Money League (a listing of the world's wealthiest clubs), just four of these (Manchester United, Chelsea, Arsenal and Newcastle United) bring in more money from game day than from sales of their products or television rights. This scenario has formed in the shadow of professionalization and has become a driving force for developing marketing-oriented strategies and forming a sales division within the football clubs.
The Business of Making Fans Happy
What does all this media attention bring to football? First of all, it generates entertainment. Secondly, it potentially serves as an example in society by its association with positive values, such as healthy competition and work ethics. Thirdly, it integrates people of diverse origins and characteristics; and, finally, it turns over a great deal of money. This is why so many organizations (public and private) are interested in the sport. If there is a favorable relationship between the various individuals involved with the club, this can lead to a "virtuous cycle" of value creation for all constituents of the football business.
All of this translates into benefits for the players (who, in addition to winning titles, are able to capitalize on their marketing value), the fans (who see the club as an identity and buy its products so as to feel they are part of a community), the media (for the audience gained thanks to football), the city (which sees the team as a promotional vehicle), companies (whose sponsorships give them visibility with a large number of fans), and club owners (who look to maintain assets and a balance sheet that ensures their survival, along with being highly ranked on the sporting side of things and increasing their impact on society).
Finally, the ones ultimately responsible for keeping the wheels turning are the fans, since their numbers determine the level of value creation for everyone associated with the club. Nonetheless, there is no single path leading to success, which is ultimately to entertain and excite the fans. It would be more appropriate to look at the variety of steps leading to an ideal panorama for all those involved with the game.
Toward a Rational Organization
According to Gómez and Opazo, football clubs are essentially "suppliers of professional sports activity whose main task is to offer physical activity programs of a recreational variety." Nonetheless, the goal of a top-flight pro football club is to "assemble a first-rate team to represent the club in national and international competitions." This consists of defining working divisions that allow for the acquisition and administration of the funds needed to sign quality players and a capable coaching staff, as well as working with the secondary squads to develop players worthy of moving up to the first team. These basic premises branch out into the sports and sales divisions. However, in order to achieve maximum professionalization, managers must not overlook the other aspects, such as communication and administration.
The organizational structure proposed by Professor Gómez is related to this division of tasks. The organizational chart would be led by an executive director (the top executive) and a general secretary (in charge of supervision), to whom each area's general management would report.
The sports division is still the essence of a professional football club, since this determines its survival, level of promotion and potential for growth. This division would include general management (contract negotiation, assignments, transfers), sports-related human resources (in charge of policies regarding contracts and the training of all personnel on the sports side), development squads (management, coordination and support for the young prospects), scouting (checking out players with talent who are susceptible to being hired elsewhere), and the head coach or manager of the first team.
The sales division is responsible for generating new resources to fund the different sports-related activities. This requires attracting both direct customers - partners, fans and product consumers - and institutional customers, meaning sponsor companies, advertisers and media.
Due to the ongoing relations between clubs and the media, it is necessary to create a communications division whose aim is to maximize profits from these relations. In recent years, clubs have taken another step, which is to create their own media vehicles, in both audiovisual and printed formats. The head of the communications division would also be responsible for relations between members, supporters' clubs and the fans.
Finally, there must be a team that manages incoming revenues, plans spending and designs budgets. The administration division determines to a certain extent the organization's chances of survival and growth.
This is not the only valid structure. As the authors point out, each club must seek to develop a structure that works best for establishing "clear lines of authority and proper distribution of responsibilities, as well as adequate differentiation and integration in order to achieve the organization's goals."
In other words, there are no recipes for success in today's football, but the clubs wanting to be part of the sport's elite class must have a solid business organization. Professionalization is fundamental for competing at the top level. Playing time has run out.