What is a ‘brand’?
Brand consultancy Interbrand defines its concept as ‘a brand is the sum of all expressions by which an entity (person, organization, company, business unit, city, nation, etc.) intends to be recognized’
In a commercial product or service, a brand’s focus is more skewed towards creating an image of superior differentiation displaying its core values to keep a customer loyal and long-term. However, in case of a football club (or any sports club) where loyalty of customers, or fans in this context, is high along with the emotional attachment quotient, the effort towards creating a strong club brand is to elevate the fan association to a more meaningful level, to attract more sponsors and thereby work towards elevating its commercial valuation
Brand Finance has been annually releasing the list of most valuable and strongest football club brands. We take a deeper look at the evolution of football club brands in the last 5 years, especially in the 2024 list
Brand Valuation
An intrinsic parameter to brand value calculation, as explained by Brand Finance, is the present value of earnings related to the club brand’s reputation. It’s no wonder that the top 10 clubs in brand valuation are also the highest revenue generating clubs. We tracked the past 5 years data and all the top 10 clubs have been constant although intermingling its relative positions. The chart illustrates their path
The highest gaining clubs in brand valuation in the past five years:
- Manchester City: 42%. Buoyed by the consistent on-field performance followed with a strong commercial revenue generation growth of 55% over a similar five-year period seem to have contributed
- Arsenal: 39%. Again, strong on-field performances followed by a 53% commercial revenue growth in the same period
- PSG: 24%. Uniquely, PSG’s commercial growth is led by non-sponsorship revenues
- Real Madrid, securing the top position in 2024 ranking, also gained 20% over the five-year period
On the counter side, Chelsea has been the only club who brand valuation has dropped considerably to the extent of 16%, more so since the takeover by the American PE group
Brand Strength
Brand strength can be directly corelated to the extent of fan support. As Brand Finance puts it, ‘as football clubs extend beyond their local municipalities, into far reaching countries, searching for additional revenue and profits, it is the strength of their brand that attracts supporters, commercial sponsors, and ultimately differentiates one club from another’
In 2024 list, Real Madrid tops with an impeccable brand strength score of 96.3 followed by Liverpool at 93.7, Manchester City at 92.8 and FC Barcelona at 92.7. Chelsea had the lowest brand strength at 84.5, this is incidentally their 5-year lowest score
On a five-year scale, again Manchester City scores high on this with a 5 percentage point gain and Arsenal gains an impressive 3 percentage points. While 5 clubs namely, Real Madrid, FC Barcelona, Liverpool, Manchester United and Bayern Munich remain more or less same, it is Chelsea whose score has dropped drastically by 5 percentage points
The Net Result
A significant chunk of a club’s revenue comes from commercial stream and that’s where the brand valuation and strength index really play a key role. The top clubs with high scores would look to consolidate their position while the lower ranked clubs need to get their marketing efforts ramped up
The leagues with most even scores would become the most competitive, both on-field and off-field
An ideal situation we would like to see!
