BARCELONA -- Total budgets nearing $1 billion, revenues unthinkable just one decade ago, $300 million in annual sponsorships, and studies underway to strengthen their financial and media position. El Clasico may indeed be a pinnacle moment for the Spanish League, but the battle to be had between FC Barcelona and Real Madrid extends well beyond the pitch.
The two giants of Spanish football have become the world's most popular clubs. At the start of the 21st century this title was held by Manchester United, which, with the talents of David Beckham and some outstanding marketing, came to be considered the most popular club in the world. But the tide has since turned.
The Galacticos catapulted Madrid to a leading position while resisting the strength of Ronaldinho's Barcelona, but it was Guardiola's football genius, accompanied by Lionel Messi and ultimate globalization, that put Barcelona on route to the unquestionable lead (a lead that has once again come into contest in recent years).
"You can't win them all, and one must be prepared to resist the negative impact that will occur when Messi retires," a sports marketing specialist that works with several clubs explained to ESPN, highlighting the good "fortune" that Barcelona and Real Madrid enjoyed having Messi and Cristiano Ronaldo at the same time.
"In terms of brand, this has been essential, because it has fed the rivalry between them."
LEVERAGING BRAND
Barcelona and Real Madrid as football brands have begun to leave Manchester United far behind, while staying well ahead of clubs like City, Chelsea or Arsenal, to say nothing of the Italians -- though they are beginning to watch the growth of PSG, bolstered by the undeniable benefit that the city of Paris provides to a star lineup headed by Neymar that will continue to grow in the coming years.
Manchester City manages its own global brand by creating clubs around the world (primarily in the United States and Australia), and with the purchase of other clubs, such as Girona. But the two giants of Spanish football are unmatched in today's arena of international football. Without the need for cash injections (as has occurred, for example, in the case of Manchester City and PSG), Real Madrid and Barcelona receive nearly $300 million annually in sponsorship and marketing.
In this context, their ongoing "cold war" -- the most significant rivalry at the club level -- takes place not on the pitch, but in the offices and at the high-level meetings resulting in multi-million-dollar agreements with a media impact "that encourages others."
Each club watches its rival's actions closely, ready to outdo them and respond with a better deal to win over fans of both clubs. These "suit-and-tie goals" are scored in a fast-paced match.
This is what happened with the issue of the main sponsor. Just a few months after the agreement between Barcelona and Rakuten took effect -- which guarantees the club fixed revenues of $65 million per season through 2021 -- Madrid responded by renewing its contract with Emirates for a fixed annual sum of $83 million, overtaking not just Barcelona but also the 2015 deal between Manchester United and Chevrolet (considered unbeatable) giving the Red Devils $73 million per campaign.
Moreover, executives at both clubs maintain a frenzied pace. A few months ago, Barcelona signed an agreement to open its first franchise in China, apart from the theme park opened by Messi with Barcelona's collaboration.
The site will include a replica of the museum, the first managed school in China, a smaller theme park, restaurants, shops and more. In 10 years time it is expected to earn $130 million in revenue. The club's assembly resolved to bring this experience to the United States and Europe with the creation of five similar theme parks through an agreement with Parques Reunidos to commence within the near future.
The idea is to create spaces, cafes and restaurants to welcome fans to watch Barcelona matches broadcast directly on large screens. This approach goes beyond the model of developing local groups or penas for supporters, while allowing the club to exert direct control. Fans will get the true Barcelona experience, including some form of participation by the athletes, whether through in-person visits or other publicity, as well as virtual reality recreations of Camp Nou and other club spaces.
The Real Madrid business model is somewhat different. They have already announced the opening of a theme park near Macao, in China, while the so-called "Real Cafe" restaurants are already operating, using a model similar to that employed for some time by the NBA and that has worked quite well in Dubai and the United States. The "Real Cafe" spaces are small, themed restaurants with large television screens to watch the games and stores with all manner of club products. The economic benefit may not be felt at Bernabeu, but the validity of the idea has been proven in terms of its ability to grow the fan base and earn revenue at all levels.
THE WAR TO COME
The full naming rights of Camp Nou and Bernabeu -- revenue from which must be used to make improvements and remodels at both stadiums -- are the next big battle between these two clubs. In Barcelona, Josep Maria Bartomeu announced in summer 2017 that he intended to sign a sponsorship agreement before summer 2018 for the naming rights to Camp Nou. In October, it was leaked that a pharmaceutical company would be the one to sign this mega-contract, which for Barcelona would mean $466 million in revenue over 30 years. The company is said to have rejected the offer, and the deal remains uncertain.
From Camp Nau there are calls for prudence, awaiting better times after the terror attack in August in Catalonia, resulting in a complicated moment that could mean delays in deal making.
In Madrid, the overall situation can be seen as less problematic, but this has done little to ease nerves. IPIC (International Petroleum Investment Company) terminated its contract with Real Madrid whereby it was to rename the stadium Cepsa Bernabeu, with a record agreement worth $474 million spread out over 10 years, to be used to finance a remodeling of the stadium.
Madrid seeks to enforce the contract, and there is the possibility of legal action against Abu Dhabi United Group for Development and Investment, the company that was formed under the IPIC contract and which controls Manchester City.
"It's an important and essential step," clarified Jordi Farre, one-time candidate for the chairmanship at Barcelona who in 2015 made clear that the naming of Camp Nau is non-negotiable in this global battle with Real Madrid.
Because El Clasico is not only played on the pitch.
This article first appeared on ESPN Deportes.