club members, not a billionaire or corporation that can support losses. Many sports teams, including several Spanish soccer teams,25 have strong sporting values or expectations on the field; the genius of the executives at Real Madrid is that they have harnessed the values for both on- and off-field success.
As demonstrated in the figure on page 20, Real Madrid gets the world’s best players that match the community’s values to play an attacking, beautiful style of soccer with class to win championships and capture the imagination and inspire a current and potential global audience and community. Take Cristiano Ronaldo as an example. He is the most followed person on social media in the world. In 2015, Ronaldo had 167.9 million followers on all social media.26 According to jersey sales, he’s also the most popular player—and for good reason. Ronaldo is a champion and has been voted, multiple times, the best soccer player in the world. He is talented, stylish, exciting, multilingual, and multicultural. The Real Madrid community expects the management team to sign players like Ronaldo to be inspirational to them.
Winning is not enough to the Real Madrid community. This is in direct contrast to the idea of “win at all costs” or “the end justifies the means,” or selecting players based on data analytics first, or “taking a calculated risk” in signing a troubled talented player that can “help the team win now.” The Real Madrid community has a different standard and demands more. They want the team on the field to reflect the values and expectations of the community, which is winning with a team philosophy, class, style, and elegance. The Real Madrid community wants the club to be “champions and gentlemen.” If the team loses, the community wants at least to see effort until the end, courage, and dignity. This is what makes them happy, and Real Madrid always tries to satisfy their needs.
Florentino believes that when Real Madrid represents the ideals of the community members, the community responds with more engagement, passion, and loyalty. Since Real Madrid’s community values are inclusive and universal, the community itself grows globally, which leads to worldwide sponsors spending big money for association with and access to the Real Madrid community, as well as television broadcasters paying lots of money to distribute the game to the large, passionate global audience. The passion leads to an increase in stadium receipts, the value of broadcasting rights, and marketing and sponsorship opportunities, which contribute to higher revenues. Since Florentino and his executives implemented their sustainable economic-sport model, revenues have soared as fans more closely identified with the club and their players and became more passionate and loyal. Coming full circle, the high revenues allow the club to sign the world’s best players who share their community values.27 Real Madrid wants their community to see a player on the team and think, “I want to play like, and be like, that player; I want my son or daughter to play like, and be like, that player; I want to win playing that style and with those values.”
The resulting increase in revenues from the community values-centric approach funds not only signing the world’s best players but a bigger, more modern venue that makes the stadium experience itself a way to connect with the team. It also provides the best training facilities and a youth academy that develop talented homegrown players who learn, from the age of seven, the history, traditions, values, and expectations of Real Madrid to complement and indoctrinate the imported stars. To the community and to Florentino and his executives, Real Madrid is much more than any one current or past player, coach, or president.
Figure 2.1: The Real Madrid Way: Sustainable Economic-Sport Model
SOURCE: Steven G. Mandis
Real Madrid isn’t just providing a soccer game; they are providing a larger experience or entertainment that draws in a community member to actively participate, for a memorable sensation. It is the experience from before and after the game as well as the satisfaction of the work of the club’s charitable foundation. Off the field, the Real Madrid community wants the club to adhere to accountability, transparency, trust, and good corporate governance. Interestingly, if Real Madrid’s community feels the club has not followed their values, the club’s unique ownership structure enables those members to express their frustration by—along with not buying tickets or merchandise—voting a president out of office.
Although the team is often referred to as Real Madrid, or simply Real, its official name is Real Madrid Club de Fútbol. The reason Real Madrid is referred to as a club is that it actually is a club.28 Unlike most professional sports teams that are owned by billionaires or corporations, Real Madrid, since its founding in 1902, has been owned by club members called “socios.” Today, Real Madrid has 91,846 members, of whom 66,671 are between fourteen and sixty-five years old, 19,797 are under fourteen years old, and 5,378 are over sixty-five years old or have been a member for more than fifty years. Real Madrid has 73,680 male and 18,166 female members. Adult members pay €123.30 per year as a membership fee. Any person who has been a member for over fifty years is exempt from paying membership fees. Any prospective new members must also be recommended by two existing socios to finalize their application for membership, although membership has been closed to new members since June 2009. A few people have been named “honorary members,” including Placido Domingo (2011), Rafael Nadal (2012), Sergio Garcia (2012), and Julio Iglesias (2012).29
A new policy of only admitting descendants of present socios as new socios was established in June 2011 because the demand for season tickets is far greater than the seats in the stadium. Today, if someone is not a descendant of a present socio but wants to be an “official” part of the Real Madrid family, he or she can join the Official Madridistas Supporters and receive an official supporter card (“Carnet Madridista”) and other benefits. The approximately 610,000 card-holding Official Madridistas Supporters are very much a part of the Real Madrid community but have no season ticket or voting privileges.30 Non-socios can also join a local Official Real Madrid Fan Club and receive other benefits.
On the other hand, socio membership privileges include the right to vote for president and board of directors and to be a candidate for General Assembly (though the socio must have been a member for at least one year and has to be eighteen years or older in these cases). Socios also have easier access to tickets. As noted, Santiago Bernabéu Stadium has a capacity of 81,044. There are 61,287 socio season ticket holders for the 2014–15 season (76 percent of capacity).31 The remaining seats are for the general public. Socios are subject to disciplinary action for failing to pay any due fees or failing to adhere to a proper code of conduct on Real Madrid property or away games.
A September 2015 General Assembly Meeting of club members representatives. They vote by a mano alzada (holding up their hands), a normal practice of Spanish-listed companies. An independent company counts the votes.
As expected, any operating decisions that require the voting of approximately 92,000 people would be a cumbersome process. Thus, the socios hold an election to form the General Assembly (“Socios Compromisarios”), which comprises around 2,000 members elected by the socios for four-year terms. The General Assembly’s main responsibilities revolve around the financial aspects of the club, such as approving the club’s budget for the season. The General Assembly also has certain other powers such as the ability to discipline the club president, as well as authorizing the club to borrow money.
Ownership structure of soccer clubs has evolved over time and across geographies, creating both advantages and disadvantages. Before 1990, Spanish soccer clubs were structured as mutual organizations owned by, and run for, the benefit of their members. By the 1980s, poor financial management,
