Where We Stand in the World
International Strategy Based on Advanced Cases
Last year, Kashima Antlers established a base in New York.
The main objective is to investigate and apply advanced cases from the digital domain of the MLS (Major League Soccer), which has developed remarkably of late. Alongside this, however, we can learn international strategy directly from FC Barcelona, Bayern Munich, and the Spanish La Liga as they also have offices based in New York.
In the frame of football business, Europe overwhelmingly predominates in terms of management scale. Top European clubs such as Manchester United, Real Madrid, and FC Barcelona rank in the top 20 for annual sales in research carried out by Deloitte.
In the football world, this monopoly has existed for a long time. However, in terms of sports business, America is leading the way. In particular, MLS has been growing the size of its business by attracting the millennial generation through the effective use of digital technology.
MLS is currently composed of 23 clubs and has no promotion- relegation system, and an expansion to 28 clubs is being considered within five years. Also, as a franchised system, in MLS the league takes the initiative concerning media strategy and since 2010 MLS digital has been conducting a business plan for digital content production, content streaming, and partnerships.
MLS is targeted at the so-called ‘light layer’ fan groups in their teens and 20s. The head of MLS digital says, “Baseball developed on the radio, American football developed on TV, so we are thinking of developing ourselves on digital technology”.
The basis of the idea is thoroughly ‘Fan first’, with an approach of, ‘The place of engagement will not be questioned; we will bring the content to the digital generation’ and an assertion that ‘MLS is defined by its fans’. This ‘Fan first’ concept offers us a lot to learn from.
It was previously mentioned that the J.League has had an ‘Asian strategy’ as one of its significant strategies since 2015, and co- operating with the J.League in order to increase awareness of Antlers in Asia is a task we must contend with. To achieve that purpose, we want to win the Asian title, the AFC Champions League, at any cost. By grasping the flow of the world and enhancing our presence in Asia, we will cultivate the ability which will enable us to compete with the world in a real sense for the next 25 years. In order to keep aiming to achieve ‘FOOTBALL DREAM’ in the J.League, which has moved from ‘co-existence’ to ‘competition’, we need to think about our management strategy from a more global perspective.
In Order to Win Titles
The Mission of Increasing Sales Revenue
Last season the fact we lost the title didn’t only considerably impact us competitively but also from a management perspective. At the core of Kashima Antlers’ management is the notion that, ‘We push ourselves towards victory as a whole club’, and to constantly be challenging for and winning titles forms the identity of the club. From this point of view, last year’s result was something we have to deeply reflect on and solutions need to be found for problems on the pitch and also in a management sense.
In 2016, as a result of the two domestic titles won and the second place finish at the FIFA Club World Cup, Antlers’ revenue increased hugely to approx. US$50.7 million. However, the revenue in 2017 will drop to US$47.5 million – a decrease of approximately US$3.2 million. The main reason for this decrease is that the total revenue combined with allocation money and other incomes fell by approximately US$4.5 million to US$13.1 million from the total amount of US$17.42 million in 2016.
Furthermore, since sponsor revenues also dropped to US$17.42 million from US$17.8 million in 2016, greater effort on the part of the club will be required to bring about an improvement. As will be discussed in more detail in due course, we need to improve sponsorship value by furthering activity development. A new opportunity for increasing sponsor revenue was also created by the J.League lifting an embargo on printed logos on the collarbone area of uniforms. Antlers seized this chance by signing a new contract with the club’s official sponsor Mercari, in the process succeeding in acquiring additional sponsor revenue.
An even more positive element can be witnessed in ticket sales. The average home game attendance was over 20,000 for the first time in seven years since 2010, and ticket sales amounted to US$8.1 million, beyond the US$7.9 million from last year. That was also partly because Antlers were in the title race right down to the wire, but even so, when Antlers’ red overwhelms Kashima Stadium the team gains momentum as well. Of course the club is always striving for victory, and it is important to raise ticket sales income from both competition and management perspectives. Also, club merchandise sales, which are increasing every year, have to be further expanded by developing more attractive products and strengthening marketing. Marketing has good compatibility with digital strategy, so expanding sales by EC and strengthening CRM (Customer Relationship Management) will also be key.
Regarding costs, the team’s playing expenses rose to US$19.81 million from US$17.5 million last year. However, this is because the J.League has launched from ‘co-existence’ to ‘competition’. With regards to this change in environment, in which the amount of prize money has been increased along with improved amounts of strengthening allocation money, the club finally determined to make large investment in terms of team reinforcement. We were unable to achieve victory, but we are confident this investment will help us win in the J.League and AFC Champions League, and to challenge for various other titles.
We were unable to achieve our goals – not only in a competitive sense but also from a management point of view – and in order to change 2017 into a turning point we must strive continuously to achieve our business goals in 2018.