Sunday, 31. December 2017

New business: Startup engine professional soccer

Bayern Munich was the first Bundesliga club to create, in 2014, a management directorate for internationalization and strategy, as well as set up an office in New York to drive the expansion of its core business of soccer internationally. Borussia Dortmund followed with an outpost in Singapore. Both clubs have intensified their efforts since then and they are not alone at all.

In the future leading professional clubs will have brought all of their international activities, subsidiaries and affiliated companies abroad (seed and farming teams, representative offices, fan shops, etc.) together under one roof. In a separate new business unit the operating companies for the stadium, catering, events, etc. will be combined with new businesses and businesses still under development. The management of these subsidiaries and operating companies, which are business segments peripheral to the core business of soccer, will be led by independent managers which receive guidance on matters of portfolio optimization from the board, which also will have a controlling and monitoring function.

In particular, the development of new fields of business will help ensure that professional clubs will be able to reduce the dependence of business success on sporting success considerably. One of the biggest growth areas is eSports. While the FIFA Interactive World Cup will celebrate its 36th birthday in 2025, the German teams in the club championships square off against one another in the “virtual Bundesliga” in their own sports arena. Now that some clubs have already begun to extend their activities to other sports (such as FC Bayern in basketball), VfL Wolfsburg was the first Bundesliga club to hire two professional e-sports enthusiasts in 2015 to wear the green and white in all national and international virtual soccer tournaments. In the same year Beşiktaş Istanbul became the first international professional club to buy a professional League of Legends team to open the Beşiktaş e-sports club. Fantasy games have already generated more than USD 200 million in the US in 2015, but have only recently reached the European mainland. The soccer console games which are getting more realistic with each passing year, are a melding of real and digital soccer and are giving rise to additional betting and advertising markets.

With a view to the future, education is another important growth area for professional clubs. While 2014 saw the first national league clubs cooperating with colleges and universities to establish institutions such as the Kleeblatt Campus in Fürth, the VfL campus in Wolfsburg and the Schalke Academy, educational institutions will be part of the inventory of the leading professional clubs in the future. The point is not only training and development of their own management personnel, but also the coaches, players and specialists within the club. In addition, having their own campus will give the professional clubs targeted employer marketing (employer branding) and position them as education-oriented employers on international employment markets. In addition, having their own educational institutions enables clubs to bring internationally renowned experts to their own campuses and secure access to best practices.

By Prof. Sascha L. Schmidt