Sunday, 19 December 2010

FC Barcelona – Brand Value at Risk?

During the last week, FC Barcelona has been in the focus in more chronicles than usual in Catalan media. Comments have been made on big football events, like the club being paired against Arsenal in the first knockout round of the Champions League and the derby against Espanyol – resulting in a giant victory of 1-5 and Espanyol's first home defeat in the new stadium Cornellà-El Prat – but what more than anything else has caused debate is a new sponsor.

Since I work with brands, I am fascinated by the loyalty they enjoy when people really feel for them. But the price of a strong identification is a big responsibility and it can easily turn into disappointment. In the worst case, that is what we now see happening, when Barça's board of directors has decided that the football team for the first time ever will carry commercial advertising on the t-shirts.

The sponsor contract has been signed with Qatar Foundation and President Sandro Rosell stresses that the € 165 million over five years - the largest sum seen so far in the world of football - are needed to improve the poor economy. People who approve of the deal draw parallels to other football clubs owned or sponsored by oil money from the Arab world. However, the discussion is dominated by those who do not want for Barça to promote Qatar, especially not since it will happen at the expense of the current support to UNICEF and the children of the world. Former coach Johan Cruyff has summed up the situation by saying that Barça which used to be "more than a club" (més que un club) will hereby be reduced to "just another club" (un club més).

What is at stake is precisely that - the image of Barça as something bigger than a normal football club. Sports journalist Enric Bañeres reminds us of the many years when the team did not win titles, but in spite of that served as the unifying symbol for the whole of Catalonia - by sociologists described as an "army without weapons", a "secular religion" or even the "epic sublimation of the Catalan people”.

Combining two brands - co-branding - always involve risks and journalist Pilar Rahola raises a warning flag about the values which henceforth may be associated with Barça. She points out that the Qatar Foundation awards an annual prize to honour Yusuf al Qaradawi - an Islamic ideologue with nasty opinions like that Hitler was Allah’s solution for dealing the evil Jews, that LGBT people must be killed or that women may need physical punishment - and that many of them even like it.

FC Barcelona supporter Jordi Bruch accuses the club directors for treating the fans like donkeys when they respond to criticism with intellectually dishonest arguments. He condemns Javier Faus, Vice-President of financial and strategy matters, and his description of Qatar as a "flexible" dictatorship, with the argument that flexibility is in fact a typical feature of a non-democratic rule. And Sandro Rosell's proposal that the fans travel to Qatar and for themselves experience what a democratic place it is, is effectively dismissed through several examples of how skilled dictatorships tend to be at deceiving tourists.

Xavier Sala i Martín, economist and former Financial Director of the club, argues that the income gained from Qatar Foundation is not as big as has been claimed, since there are opportunity costs. The € 30 million extra per year which the contract will bring has to be compared with the 20 million which the previous board of directors had been offered by a candidate who was willing to be a "sponsor of the sponsor", i.e. get recognition not by advertising on the t-shirts, but as the entity making it possible for UNICEF to remain there.

Personally, I hope that the new directors have a plan to handle the consequences of the decision. Operating profit in a business or a sports club depends not only on income and expenses, but also on how you manage the assets which you already have. There can be no doubt that the brand FC Barcelona - an intangible asset - is stronger than ever after Joan Laporta’s years as President. The sponsorship agreement with the Qatar Foundation will affect the club's image. What has started as negative feelings can ultimately be a question about money.

- - -
Sources and inspiration Sandro Rosell: "A la major part dels socis els agrada l'acord amb la Fundació Qatar" Cruyff respon a Rosell: "Els mites sempre tenen raó? Els que pensen, sí" La nueva singularidad del Barça
Ens prenen per rucs? Noticias de Qatar
LaVanguardia via Reggio: Por culpa de Joan Laporta

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