Real Madrid CF
Real Madrid is a Spanish, professional football club founded in 1897, and with upwards of thirty Spanish League (La Liga) titles, seventeen Spanish Cups, nine European Championship Cups and two UEFA trophies, it is easily one of the most successful football clubs in the world ( Real Madrid, 2012). It was voted the 20th Century’s most successful club by FIFA and by the close of 2011; it was the richest club in the world, with annual revenues reaching upwards of $695 million and $204.0 million in operating revenues. The club, which is entirely owned and controlled by its members, is estimated to be valued for upwards of $1,877 million by April of 2012, grossing match day, broadcasting and commercial revenues of $435 million, $647 million and $540 million respectively (Forbes, 2012). Having enjoyed top-flight football since its founding, it has become massively successful over the past decade, following restructuring in 2000 that allowed it to bring on board some of the world’s most sought after players, including Zinedine Zidane, Beckam, Luis Figo and Cristiano Ronaldo. By the close of 2007, it was the world’s most valuable football brand, and among the topmost twenty most valuable brands in the world. The club is registered and organization as an association with close to 60,000 members, and enjoys worldwide support and following, reaching as many as 280 million fans.
The Real Madrid Foundation
The club set up the Real Madrid Foundation to develop and coordinate its social responsibility policies, charged with the formulation and implementation of formative and social projects. Its major role is the promotion of values of sport and use the resources available to it as an educational tool both in the country as well as internationally. Led by a president, vice president, secretary and the club board of directors, the foundation also has institutional members including The Association of Decana Supporters’ Club, Association of Basketball Veterans, the Mayor of Madrid and other members elected by the club board of directors ( Real Madrid, 2012). The collaboration with government and private enterprises, individual donations, coupled with global sponsorships and support allows the Foundation to carry out varied CSR initiatives in sports education, sports promotion, social projects, institutional activities and international cooperation, including a heritage center for preserving important historical documents. Among the leading projects implemented by the Real Madrid Foundation, include national integration academies, geared at reaching out to demographic groups across the world, at risk of social deprivation and exclusion. Others include Basketball in hospitals, integration camps, donations to charity and exercise opportunities for the elderly, sports and social academies, voluntary work, summer experience camps and multiple other activities that promote the welfare of communities across the world ( Real Madrid, 2012).
CSR Issues and Failures
The major social responsibility problem facing Real Madrid derives from its wide community of corporate sponsors, who production and distribution, as well as sustainability of their operations reflects on the club’s reputation and even most importantly on the global community. The company’s corporate sponsors include global companies such as sports clothing manufacturer Adidas AG, Audi, Telefonica, Unilever, Pepsi, Mahou-San Miguel, Sanitas and Siemens Mobile. These companies are involved in wide ranging operations across the world, which affect innumerable communities in both positive and hurtful ways (United Nations Global Compact, 2011).
While it is in the best interests of the club to ensure its sponsors share in the objectives, corporate citizenship, traditions, values, performance standards and leadership of Real Madrid, this is nearly impossible to attain in practice. In 2005 for instance, Adidas AG, which also sponsors top-flight sides in France, Germany and the FIFA World Cup, sacked Union Officials at its Panarub factory, Indonesia. It actions were found to be both illegal and against the labor rights by the Indonesian Human Rights Commission, but the company has failed to reinstate the employees. In addition, the company, along with another sports apparel giant Nike has faced allegations of using child labor in their facilities in Asia. Pepsi and Coca-Cola on the other hand, have faced allegations of unsustainable production practices in the developing world, including depletion of ground water supplies, lack of recycling and ineffective treatment of wastewater before disposal into water bodies, leading to pollution and disruptions of ecosystems. Sponsors account for an important proportion of Real Madrid’s revenues, but their failings to observe the best values etc, reflect on the club’s CSR. In addition, such shortfalls are in contravention to the UN Global Compact principles, which call for the elimination of forced labor, abolition of child labor, discrimination and respect for collective bargaining (United Nations Global Compact, 2011).
In addition, Real Madrid has since its 2000 restructuring the presidency of Florentino Perez has pursued the best players in the world. These players are bought from individual clubs or even recruited at the early ages to be a part of the star-studded team (the Galacticos). The club effectively has a responsibility towards the local communities from which it plucks the players, not least because these communities invest resources (education, training and mentorship). The club gets the best, and effectively assumes a responsibility over the communities, clubs, and associations that do may not monetarily benefit from the purchase of players from their midst. The recruitment of players, and regulations over national team responsibilities are regulated by FIFA rules, while national regulations only regulate child and forced labor, leaving may grey legal areas that can, and have been exploited by football clubs to their commercial benefits.
Further, Real Madrid has a global fan base of over 280 million people spread across the world, who support the club in varied ways including purchase of merchandise ($540 million in annual revenues). Since the Spanish and European Union CSR and sustainability regulations only apply in the country and continent respectively, the club’s policies towards the rest of its stakeholders across the world is effectively unregulated (Phil, 2003). In addition, the global football communities represent the main draw for its corporate sponsorships, keen to tap into the diverse markets. Developing policies to ensure that the best interests of the global communities, including development of football, sustainability and investment in local communities among others, which are however, heavily limited by the available resources.
Real Madrid Stakeholders
The club is owned by more than 60,000 members, who purchased memberships rights in the club, and are interested in the club’s good performance on the pitch and financial performance, and perhaps most importantly, the sustainability of the club into the long term. The club management, comprising of directly elected president and board are keen to ensure their tenures are secure by ensuring the short-term objectives i.e. good financial and performance on the pitch, brand management and lucrative sponsorship deals among others. Other stakeholders include the players and the coaching staff ( Real Madrid, 2012). These are interested in the club’s on the pitch, good remuneration and the club’s long-term survival. The players and the manager need Real Madrid to remain in the Premier League and win trophies. In addition, the club’s employees, the stadium management and workers, the team medical staff and nutritionists on the other hand, are after job security, good remuneration and working conditions.
The team’s commercial partners, including sponsors and merchandise distributors and retail outlets. The merchandize retailers’ sales depend on the popularity of the team and the game, and thus their interest in the club is good marketing, great on the pitch performance and followership across the world. The communities across the world that have a direct or indirect interest in the club e.g. through the national team players playing for the team etc among others, also have a stake in Real Madrid. The local communities include the communities around Real Madrid’s home stadium and other football stadiums across Spain, which benefit from employment opportunities and suffer noise pollution during match days etc. These community interests are largely served by the Real Madrid Foundation. Other stakeholders include FIFA, UEFA and other football governing bodies across the world, along with the global football communities, who benefit from the development and promotion of football and its values across the world ( Real Madrid, 2012). The leading clubs in the world are at the forefront of developing football across the world.
CORPORATE SOCIAL RESPONSIBILITY RECOMMENDATIONS
Provision of Leadership in Sustainability & Corporate Citizenship
In order to ensure this:-
(i) Develop a code of ethics and corporate social responsibility objectives of the foundation and club, for the corporate sponsors to sign up, besides being signatories to the United Nations Global Compact to promote the rule of law and uphold utmost respect human rights across their value chains as established under the United Nations Human Rights Charter. In addition, corporate sponsors must maintain healthy relationships with governments, non-state actors, suppliers and business partners in order not to pose a risk of human rights abuses, besides maintaining diligence, including the adoption of UN Statements of Policy publicly committing (United Nations Global Compact, 2011).
(i) Join the UNGC LEAD Initiative, which at present only has 56 companies, by committing to implement the Blueprint for Corporate Sustainability Leadership, while at once sharing learning and outcomes with other companies and clubs across the world through the Global Compact framework and other initiatives
(ii) Promotion of women and minority rights empowerment principles, including through the adoption of the UNGC 10th principle against corruption envisaged in the in the United Nations Convention against Corruption.
(iii) Participation in the UNGC Working Group meetings to promote and communicate CSR and sustainability initiatives, while also using channels such as the United Nations Economic and Social Council to encourage other clubs and business to participate
(iv) Promotion of training, education, professional development and women leadership among parties that are involved with Real Madrid, Spanish football and the club itself (United Nations Global Compact, 2011)
This CSR initiative is in line with the Real Madrid Foundation’s mission and will not require new members of staff to ensure it is fully implemented. In addition, given the large number of corporate sponsors available to the club, it is unlikely to drive away a considerable number of companies, not least because some of the companies are already signatories to the UN Global Compact and Real Madrid is a premium brand and an excellent football club, effectively making it a major attraction for corporate sponsors. There are no direct costs involved, and providing leadership, the club would be able to accomplish more CSR objectives that would touch its 280 million-strong supporters across the world, without a considerable cost to the club. The initiative would be evaluated in terms of the number of corporate sponsors and other companies that sign up to the UNGC and other global sustainability and CSR initiatives, resulting directly from Real Madrid’s initiatives ( Real Madrid, 2012). In addition, number of presently existing sponsors that have successfully signed up to the code, the UNGC and other Conventions, as against those that opt out of the sponsorship agreements at the conclusion of the current contracts or earlier.
The major difficulty arises from the need to get companies that are not signatories to the UNGC to sign up, especially companies that currently have long running sponsorship contracts with the club. The UNC requires elaborate measures to be undertaken by each individual firm. Which may run against the strategic interests of some companies, hence they may not prefer it, and it will be futile for Real Madrid to tie sponsorship deals to UNGC (United Nations Global Compact, 2011).
Social Work and Summer Experience Camp Projects in Player Home Regions
The Real Madrid Foundation has established numerous football academies across the world, but as yet they have not been guided by the communities from which they have a direct interest. The Real Madrid players are huge celebrities in their respective home countries and regions, which could be harnessed by the Foundation to ensure its CSR goals, are met.
(i) The use of players’ celebrity power to raise financial resources to set up financial resources to finance the CSR initiatives in their own home regions
(ii) Identify and invest in regions or communities that economically and socially deprived
(iii) Establish programs that are responsive to the needs of the respective communities and according to the resource needs of the regions (Mullerat & Brennan, 2010).
(iv) The projects should comprise a mix of summer camps, training boot camps, mentorship programs, motivational speaking by the players and club officials among others, tailored for the youth
(v) Programs for the benefit of the society should include exercise programs, provision of clean water for arid and semi arid regions among others
(vi) Projects should draw on local labor, preserve the environment or encourage environmental protection. Employees would be recruited by the respective project teams, under the direct supervision of the Real Madrid Foundation. They will include project managers, football and basketball coaches, community leaders and other officials depending on the respective projects. The project teams would draw up the individual proposals of the respective projects, subject to approval by the Real Madrid Foundation.
The programs should be promoted to through the club’s official website, mass media in the respective countries in which the projects will be located. The costs of the collective projects is enormous, but for practical reasons, individual players should raise money for individual projects, and then project budgets and scale should be based on the respective amounts raised by the players (Mullerat & Brennan, 2010). This would ensure that the projects are independent form each other. The foundation should chip in with its wealth of experience in such projects, to provide overall supervision and framework for running such programs. With these programs however, individual players will be advancing the club’s social responsibility initiatives, while at once giving back to countries and communities from which the “Galacticos” come from. In addition, since the players change constantly, this program will ensure that every player that plays for Real Madrid has a project under their names, which they will be encouraged to maintain even after leaving the club, and in case they do not, the foundation will take over. The success of these projects would be evaluated according the success of the individual projects and their specific purposes. Football academies for instance, will be judged according to the number talents brought on, the impact to the community. The challenge of this project is that individual projects may become to many to handle, especially if individual players are disinterested in them.
Sponsorship of Human Rights and Environmental Protection Initiatives across the World
With fans and corporate sponsorship spread across the world, it is impossible to cover the entire globe. However, general interest issues such as global warming, human rights protection, conservation, art and culture are critical to all human beings and the planet (Phil, 2003). Effectively, by sponsoring these initiatives or promoting them, the club would have succeeded in giving back to all its fans, global stakeholders. The potential projects include:-
(i) Global human rights and environmental organizations such as Amnesty International, Greenpeace and The Global Human Rights Watch
(ii) Promote these initiatives at the home stadium, Real Madrid TV and other channels
(iii) Invest in alternative fuel and cleaner fuel programs across the world, to help bring to reality revolutionary new technologies that would benefit the whole world
(iv) Support environmental clean-up campaigns water recycling, waste treatment and conservation initiatives (Phil, 2003)
(v) Sponsor academic and scholarly research geared at the provision of clean energy technologies, human rights promotion and conservation
(vi) Cultural preservation initiatives e.g. conservation of World Heritage Sites across the world
These sponsorships necessarily need not be expensive, and Real Madrid can contribute as little as the Foundation can afford to. The number and nature of the projects will equally be dependent on the individual proposals by the entities to be sponsored. The projects would be evaluated on the basis of the (i) nature of projects sponsored (ii) the results produced, (iii) the contribution to knowledge and (iv) the impact of the individual projects on the populations in different regions across the world. In this way, Real Madrid will be able to contribute to the best of its ability to the advancement of knowledge, culture and societies without even knowing or being directly involved with them. The difficult of this project is that results take a long time, if any at all (Center for Biological Diversity, 2010).
Conclusion
CSR and marketing are inseparable, and for sporting institutions, marketing has got to go beyond the perimeter fence advertising and ownership of television companies. Sports comprise an important part of cultures across the world, and as such, global sporting brands such as Real Madrid should serve the wide goals of all fans and communities across the world, as against just its 60,000 members. It is important that the club’s corporate sponsors and other institutions share in the values, traditions and beliefs of Real Madrid. In this way, the club will be able to address many CSR objectives in multiple areas of the world and spheres of life as against if the Real Madrid Foundation was to seek to achieve these goals its own. The CSR policies should be geared at doing greater good (United Nations Global Compact, 2011).
References
Center for Biological Diversity. (2010). http://www.biologicaldiversity.org/campaigns/overpopulation/climate/index.html. New York: CBD.
Forbes. (2012, April 21). Real Madrid. Retrieved May 7, 2012, from www.forbes.com: http://www.forbes.com/teams/real-madrid/
Real Madrid (2012, april 17). Current News. Retrieved May 7, 2012, from www.realmadrid.com: http://www.realmadrid.com/cs/Satellite/en/1193041516335/Fundacion/Foundation.htm
McManaman, S., & Edworthy, S. (2003). El Macca: Four Years with Real Madrid. New York: Simon Schuster.
Mullerat, R., & Brennan, D. (2010). Corporate social responsibility: the corporate governance of the 21st century. Los Anngeles: Kluwer Law International.
Phil, B. (2003). Morbo: The Story of Spanish Football. London: WSC Books.
United Nations Global Compact. (2011, July 2). About Us. Retrieved May 7, 2012, from www.unglobalcompact.org: http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.html
