of the respect he commands as a former star player and winning coach. Ancelotti likes to stretch the game and take advantage of open spaces, but Atlético’s coach, Diego Simeone, has proven enough times that he is a tactical genius and will not be overwhelmed by the occasion.
The media has marketed the game as David vs. Goliath. Real Madrid generated €550 million ($726 million) in revenue during the year, compared to Atlético’s €170 million ($224 million). Real Madrid paid their players an average of $7.6 million compared to Atlético’s $2.6 million. Real Madrid has a powerhouse balance sheet, probably one of the strongest in all of sports, while Atlético had such serious debt problems three years prior that they fell behind in their tax payments. Although any link between winning in sports and profitability has been disproven in several studies (see sidebar below), the media has been speculating that an Atlético win would increase the value of their brand and profitability. The media seems to have forgotten that, after winning the Champions League in May 1998 and May 2000, Real Madrid was close to bankruptcy by 2000.
Simon Kuper, writer for the Financial Times, and Stefan Szymanski, former professor of economics and current professor of sports management at the University of Michigan, made the argument in chapter three of their book Soccernomics (New York: Nation Books, 2009) that most soccer teams lose money. According to the authors, the buyers of soccer teams are wrong if they assume that if they can get their teams to win trophies, profits will inevitably follow. The authors analyzed the Premier League from 1992–93 to 2011–12 and discovered that even the best teams seldom generate profits. They also detailed how unprofitable the overall industry is. In addition, they showed that there was little correlation between success on the field and making money. Instead, Kuper and Szymanski found that most teams didn’t care about profits. They were spending what they believed it took to win games. The majority of teams even paid players more money than they had or could produce, so the teams would borrow money, and most had a precarious amount of debt.
In a 2008 unpublished MBA thesis at Judge Business School in Cambridge, Francisco Cutiño showed that winning games doesn’t necessarily help soccer teams make profits. Rather, the effect works the other way. If a team finds new revenues, those revenues can help them win games because they can help buy/retain better players:
But contrary to the common idea that good [on-field] performance will drive good financials, there is evidence that better revenue-generating structures can have a significant impact in the performance of the team . . . only with good financial results clubs can buy and retain good players and create good teams.
Therefore, a team should develop a sustainable economic-sport model to make profits to buy/retain better players, which leads to better results.
In Winners and Losers: The Business Strategy of Football (New York: Viking, 1999), Szymanski and researcher Tim Kuypers analyzed ten years of the English Premier League (1990–99) and discovered that the one variable with the highest correlation to winning is: the teams that pay the highest salaries for the best players win the most often. It probably doesn’t take a lot of classes on data analytics to figure that out. I believe in a competitive industry with competitive owners who have lots of money to spend, a team needs a distinctive competitive advantage to maximize the performance of these best players as well as to help generate more money to pay the salaries.
The game ends Real Madrid 4–1 Atlético Madrid. It’s Real Madrid’s tenth Champions League trophy, their first since 2002, and they couldn’t have won it in a more dramatic fashion, coming from behind to tie the score in the ninety-third minute and forcing the game into extra time (for more details, see “Play-by-Play of La Décima” sidebar on page xxvii). To add to Real Madrid lore, the team won the game utilizing one of its core values: never giving up, which means competing until the final whistle. Real Madrid was 150 seconds away from defeat, yet they never gave up hope and played as hard as they could until the very end. Putting aside the rivalry or La Décima, what makes the evening so special to Real Madrid’s management is that the players lived up to the community’s expectations.
On Sunday morning, the team arrived at Madrid’s Plaza de Cibeles with the trophy. There were still tens of thousands of Real Madrid fans in the square after celebrating throughout the night. “Thank you for waiting,” Captain Casillas told the supporters and then added the obvious, “It’s time to think about the Eleventh (La Undécima).”10 Vice-Captain Sergio Ramos, with the second-most seniority on the team, spoke into the microphone: “This is dedicated to Pitina, who helps us from above.11 Hala Madrid!” “Hala Madrid” is difficult to translate exactly. It means something like “Go, Madrid, Go!” or “Forward, Madrid!”
Real Madrid define themselves by results, and in particular by their performance in the Champions League. Anyone who plays for or manages Real Madrid is left in no doubt about the top priority every season.12 The pride of the community at the team’s record number of wins is matched only by their passion for doing it in their own unique way. In Lisbon, the team’s players felt the full weight of the community’s expectations, which went beyond simply winning. There is an intense sense of responsibility and pride that comes with representing what the community is and the values they stand for. Real Madrid’s secret to dominance on and off the field is the passion and values of their community members.
Exactly 19:45. It is time for business. The atmosphere is electric. Real Madrid gets the ball first and kicks it from left to right. Atlético is defending deep, as expected. In the ninth minute, Diego Costa, Atlético’s leading goal scorer, jogs off the field, injured. Since he isn’t carried off, the announcers speculate that he hadn’t torn his hamstring again, like he did in the semifinals against Barcelona, but clearly he knows he can’t carry on. The announcers speculate whether Costa will be sidelined by injury, and, if he is, the gamble that playing him could cost his team one of only three valuable substitutions allowed very early in the game.
Real Madrid continues to control the ball, but Atlético is so well organized on defense that Real Madrid can’t develop any serious threats. As excellent as Atlético has been defensively, however, it has been ineffective going forward. At thirty-two minutes into the game, Real Madrid gets their best chance to score when Bale takes advantage of an Atlético midfielder’s careless pass. Space opens up, and thirty yards out the Welshman uses his world-class speed to sprint toward the goal. Bale fights off a sliding tackle (had Bale gone down, he might have drawn a penalty) and perhaps is somehow distracted enough that he then pokes the ball just wide of the post from twelve yards. Bale throws both hands over his face. The magnitude of his regret over the missed opportunity highlights how rare scoring opportunities are in soccer and how precious the ability to finish and score is.
Only four minutes later, Atlético responds. An Atlético corner is headed away by Real Madrid, then an Atlético player heads the ball back into the penalty area. There seems to be little threat, but Real Madrid goalkeeper Casillas sprints off his goal line into no man’s land. Atlético’s center back rises above a Real Madrid defenseman near the penalty spot to head the ball over the out-of-position goalkeeper who is too far off his line. Casillas is already desperately retreating, realizing that he misjudged his ability to reach the ball. He manages to get a hand on the ball heading toward the empty net, trying to claw it back, but to no avail. The ball crosses the line. GOAL! The goal scorer is tackled by his teammates on his celebratory run and ends up under a mass of Atlético players. Even though Real Madrid had seemed to be in control for most of the first half, they are losing. To make things worse, all Atlético has to do now is sit back, clog things up, eliminate space between
