Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2012

Capstone Advisor

Richard Burton

Honors Reader

Professor F.G. Tucker

Capstone Major

Sport Management

Capstone College

Sport and Human Dynamics

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Professional

Subject Categories

Business | Sports Management | Sports Studies

Abstract

In March of 2012, Forbes Magazine ranked the most valuable brands in all of sports. Trailing only Manchester United’s $2.235 billion valuation, the next most valuable franchises are Spain’s Real Madrid of La Liga BBVA, and Major League Baseball’s New York Yankees. As the two of the three most dominant brands in all of sports, Real Madrid and the New York Yankees are frequently mentioned in the same context as one another, but rarely discussed through more extensive market research comparing their brand management strategies. By utilizing Kevin Keller’s acclaimed Customer-Based Brand Equity model, the relative strength of the brands for Real Madrid and the New York Yankees will be assessed based on their ability to successfully integrate six core components within their brand: brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance. Through a combination of these indicators of brand strength, this paper will investigate which brand is stronger at the domestic and international levels, as both a sports team and commercial enterprise.

Awarded by FIFA in 2008 as the “Best Club of the 20th Century,” Real Madrid’s remarkable history is unparalleled by any other team in the world’s most popular sport: soccer. With a record 31 LIGA BBVA and 9 UEFA Champions League titles, Real Madrid’s sporting excellence is matched only by its brand equity, with a valuation of $1.877 billion. Owned by a coalition of members, known as “Madridistas,” Real Madrid has capitalized on its brand loyalty, translating recent team performances into $214 million in operating income, thereby establishing the club as the most profitable brand in all of team sports in 2011. Valued slightly below Real Madrid at $1.85 billion, the New York Yankees are the most storied franchise in all of American sports. As the most acclaimed brand in America’s favorite pastime, the New York Yankees have won an incredible 27 World Series Champions - 16 more than the 2nd place St. Louis Cardinals and 3 more than any other North American sports franchise, in the NHL’s Montreal Canadiens. As a true sports enterprise, the New York Yankees generate the most revenue of all sports teams worldwide and represent a core component of Yankee Global Enterprises LLC (YGE), with a collective valuation of $5.1 billion.

Though typically discussed in conjunction with the other, Real Madrid and the New York Yankees have each reached their respective valuations and positioning as global brands in very distinct ways. With its commercial business model roughly only a decade old, Real Madrid’s brand resonance, and subsequent brand equity, is derivative of the universal nature of soccer, taking advantage of the captivation of audiences worldwide and its presence as a truly global brand. The New York Yankees, have embraced this model since 1973 under the direction of George Steinbrenner, and have amassed such brand strength through its attentiveness in its domestic market and the salience of YGE. With virtually equal brand valuations, Real Madrid has maintained a more effective positioning as a global sports brand, with the New York Yankees utilizing its domestic strength to influence global markets. Ultimately, due to their longer season and greater local population, the Yankees are a stronger domestic brand, with Real Madrid’s global appeal catering to soccer fans enabling them to become the stronger global brand.

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Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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