Parrish, Lee, & Kim (2016). Business development strategies among football clubs in Argentina

Forthcoming Chapter in Gonzalo Bravo, Rosa Lopez de D’Amico , & Charles Parrish (eds.) (2016). Sport in Latin America: Policy, Organization, and Management. (Routledge)

Innovative Business Development Strategies among Football Clubs in Argentina

Charles Parrish, Shawn Lee, & Ji-Ho Kim

Abstract

Professional sport organizations around the world use a variety of commercial (business)

strategies to generate capital in an effort to offset costs and maximize revenue potential. While

emphasis is typically placed on revenue associated with the core sports-based product (i.e. match

tickets, broadcasting rights, corporate partnerships, licensing and merchandise sales) these

organizations are increasingly seeking supplemental revenue by identifying and capitalizing on

opportunities that exist outside their traditional core business ventures. Professional football

clubs in Argentina are no exception and many have initiated innovative strategies aimed at

generating new revenue. This chapter outlines some of the typical revenue streams associated

with football club management and discusses the nature of Argentinean football within this

framework. The authors then provide a brief overview of Mark Johnson’s ‘white space’

construct and describe a sample of these types of strategies recently implemented by professional

football clubs in Argentina to highlight contemporary sport management practice in the region.


INTRODUCTION

As Soderman (2013) notes professional sport is often characterized as being inferior to

other industries however it is plausible to conceive of the management and operation of

professional sport organizations as similar to other types of business enterprises. While

significant differences exist with respect to contextually nuanced factors such as organizational

purpose, management and operation strategies, models of governance and regulation, and

technology integration; the conspicuous tie that binds professional sports teams and business is

the pursuit of revenue. For some teams revenue is viewed as providing a return on stakeholder

investments while for others it is a means to achieve organizational subsistence.

A sport organization’s capacity to generate revenue is dependent on a myriad of factors

beyond success on the field of play (O’Reilly & Nadeau, 2006), such as resources (human and

physical), market dynamics, geography, regulatory environment, brand image and value,

marketing, and distribution practices within the local, national, and international marketplace.

Also, some sport organizations may be better positioned to succeed financially or are simply

managed better than others and hence are able to gain a financial and competitive advantage over

other organizations (Calzada, 2013). However, this particular chapter neither focuses on the

amount of revenue generated by sports organizations nor whether teams are successfully

maximizing their revenue generating potential. Rather, the authors highlight the manner in

which professional teams access revenue with a particular emphasis on innovative ‘atypical’

business strategies. The chapter begins by examining the most common revenue streams football

clubs typically seek to capitalize on followed by a brief discussion on the nature of football in

Argentina to provide necessary context. The authors then outline Mark Johnson’s ‘white space’

business construct to establish an analytical framework and briefly explore a selection of ‘white


space’ strategies being implemented by and on behalf of some professional football clubs in

Argentina.

SOURCES OF REVENUE

In general, for profit and nonprofit professional sports organizations (and leagues)

capitalize on a range of organizational resources by implementing diverse business initiatives

aimed at generating revenue. Applying portfolio theory to professional sport club management

O’Reilly (2013) characterizes this concept as a ‘portfolio of assets’ approach to management

from an investment perspective. The portfolio model of professional club management

highlights the various ways revenue can be accessed through organizational assets while also

noting the approach can help to “reduce an organization’s overall risk exposure” (O’Reilly,

2013, p. 345). This idea stems from the notion that the financial health of a sports team can be,

to a degree, optimized while simultaneously being safeguarded through the diversification of

financial assets. Theoretically, developing multiple sources of revenue can serve as a financial

safety net, whereby the loss of one revenue source would not constitute financial ruin. While not

all professional sport organizations, whether by choice or structural conditions, ascribe to this

particular model of management it is becoming more common across the globe.

The most common revenue generating initiatives professional football clubs capitalize on

are based on the core product (the team) and the entertainment value it provides (football

matches). These initiatives include the sale of match tickets, media broadcasting rights, licensing

and merchandise sales, corporate partnerships, naming rights deals, advertising, food and

beverage, luxury suites and club level seating, and parking (Beech, 2010). Other forms of

revenue can be raised through club membership dues, strategic player transfers and loans, off-


season exhibition tours in the global marketplace, stadium tours and museums, and year-round

stadium lease agreements for sport and non-sporting events alike. Some European based

organizations have experimented with listing shares of the club on stock exchanges however this

practice is becoming less common.

This model is clearly in decline because of the pressure that the sporting activities put on

the price of shares. It can lead to value swings that are unjustifiable from the point of

view of the actual financial value of the club’s assets. In Europe, there are currently 20 or

so clubs listed on the stock exchange, a far cry from the 50 there used to be in the 1980s

and 1990s. (Calzada, 2013, p.10-11)

Of the various revenue generating initiatives, stadium related revenue, media

broadcasting rights, and corporate sponsorships typically account for the largest percentage of

revenue for professional football teams. According to Deloitte’s (2014) most recent report on

the highest earning football clubs in the world, Manchester United (England), Arsenal (England),

and FC Barcelona (Spain) were among the most balanced clubs with respect to the

diversification of revenue across these three broad categories of assets during the 2012/2013

season. Specifically, Manchester United generated 30% of its total revenue (423.8 million

Euros) through its stadium (tickets, hospitality, and merchandise), 28% from media agreements,

and 42% from commercial partnerships (including licensing). Arsenal’s total revenue

distribution (284.3 million Euros) was 38% from stadium revenue, 36% from media agreements,

and 26% from commercial partnerships. Finally, FC Barcelona generated 25% of its total

revenue (482.6 million Euros) through game day stadium revenue, 39% through media deals, and

37% from corporate sponsorships. In contrast, during the same year Italy’s top two earning


clubs AC Milan and Juventus were overly dependent on media money as this source accounted

for well over 50% of these organizations’ revenue (Deloitte, 2014).

FOOTBALL IN ARGENTINA

Football in Argentina is both a popular leisure pursuit and commercial enterprise with a

history that dates back to the last quarter of the nineteenth century. Though the sport was

originally associated with the fledging British private schools and influx of railway workers it

rapidly became a popular and organized leisure practice that cut across demographics in Buenos

Aires by the first decade of the twentieth-century (Frydenberg, 2011). By the 1920s, ‘under-the-

table’ professionalism was common and many of the nation’s first soccer clubs had begun

developing grounds with fixed seating to capitalize on the revenue potential associated with the

sport’s popularity. Amateurism gave way to professionalism in the early 1930s and by the1950s

football clubs in Argentina were providing fair wage compensation to players. Certainly, many

players sought higher wages abroad, just as they do today. Over the past 40 years Argentina’s top

flight football clubs have routinely filled their large stadiums with paying fans (hinchas),

expanded their membership base (socios), and reaped the tangible and intangible benefits that

accompany television broadcasting, albeit with varying levels of success.

Today, Argentina’s football clubs remain classified as non-profit civil associations, where

remuneration for the elected board of directors managing each club is restricted by law. This

‘associative model’ of governance provides club members and their board of directors the

collective option to invest capital on sport success in addition to or at the expense of membership

service satisfaction. For example, a club may decide to allocate substantial financial resources

towards improving the quantity and quality of its physical infrastructure and programming


offerings to meet the needs of its socios rather than allocating money to player salaries. In this

particular scenario, a club is not focused as much with acquiring and maximizing revenue

beyond organizational subsistence. However, in practice, Argentina’s top football clubs have

aspirations of competitive achievement and hence they resemble commercial organizations that

aim to generate substantial revenue beyond the amount provided by dues paying socios and the

sale of season and one-off match tickets to support their competitive goals.

The largest and historically most successful football clubs in Argentina are concentrated

in the province of Buenos Aires, the majority of which are located within the metropolitan region

surrounding the federal capital city of Buenos Aires. The most prominent of these clubs are

Boca Juniors and River Plate. Historically, both Boca and River have had tremendous success

within the domestic championship as well as in international competitions. Because of their on-

field success and branding linked to class-based identity politics, these clubs enjoy support

nationwide. The other main clubs in Argentina include Velez Sarsfield and San Lorenzo de

Almagro in Buenos Aires, Racing and Independiente in the Avellaneda suburb, as well as

Estudiantes in the provincial capital city of La Plata.

Traditionally, Argentina’s top clubs derive revenue from a wide array of sources,

including membership fees and match tickets, licensing and merchandise sales, corporate

sponsorships, and media broadcasting agreements. Player development initiatives within the

clubs’ local academy system have also provided substantial revenue as teams capitalize on the

value of their rising stars via transfer and loan deals. Unfortunately the complex political

environment of each club, which includes a notorious web of corruption and clientelism among

club directors, politicians, the police, and the barras bravas (organized, violent, and financially

opportunistic fan groups) has rendered the accuracy of financial accounting among football clubs


in Argentina dubious at best (Alabarces, 2004; Duke & Crolley, 2001; Gaffney, 2009; Paradiso,

2010). Nevertheless, Ramallo and Aguiar’s (2007) work on the business of football in Argentina

is useful when exploring the breakdown of revenue among Argentina’s top football clubs. To

begin they emphasize that due to restrictions on remuneration for football club directors, the

majority of these elected officials lack the professionalism and expertise needed to fully

capitalize on the array of financial assets held by each club. Consequently, clubs frequently

outsource their rights to third party companies who design and apply “the strategies protected by

the attributes and values, for better or worse, operated by each club” (Ramallo & Aguiar, 2007,

p. 469).

The outcome of this scenario is decisions related to the pursuit of commercial revenue

from licensing and merchandise sales are often left in the hands of external entities. These third

party partners are linked to the clubs only through contractual agreements and their interest rest

solely in extracting profits rather than contributing towards a comprehensive brand renewal and

management strategy. With respect to media revenue the Argentine Football Association (AFA)

brokers collective television contracts on behalf of member clubs with local broadcasting

networks in Argentina. In the mid 1980s the AFA transferred the media rights to its top flight

first division to media mogul Carlos Avila, who eventually merged his pay channel Torneos y

Competencias (TyC) with Grupo Clarín to form Television Satelital Codificada (TSC). Until

2009 TSC, via the Clarín and TyC partnership, controlled the broadcasting rights of Argentine

football through a series of exclusive contracts. The revenue generated by these deals, which

totaled in the neighborhood of $US90-$US100 million annually, was then redistributed among

the 20 first division clubs based on a three-tiered formula that provided the largest five clubs

with a higher percentage of the payouts. However in 2009, amidst a heated public dispute


between Clarín and the Argentine government, the AFA signed an exclusive media rights deal

with the Argentine government initially worth approximately $US150 million annually

(Alabarces & Duek, 2014). Interestingly, the value of this new Fútbol Para Todos (Football For

Everyone) television contract exceeds past media agreements yet the actual increase in revenue

allocated to each club is marginal and remains inadequate in comparison to the massive debts

carried by Argentina’s big clubs. Besides moving all broadcasts of first division matches to free-

to-air television, including the government’s own Televisión Pública, the Fútbol Para Todos

contract with the AFA maintained a similar three-tiered revenue distribution formula, which

allocates more money to the larger Buenos Aires based clubs.

Football clubs in Argentina rely heavily on the distributed revenue from the Fútbol Para

Todos broadcasting agreement as well as transactions related to player transfers and loans.

Specifically, approximately 70-75% of club revenue is generated from player transfers and the

media broadcasting agreement. In comparison, dues paying socios, stadium related revenue (e.g.

advertising and match tickets), and licensed merchandise combine to account for approximately

25% of the teams’ overall revenue in Argentina’s first division (Ramallo & Aguilar, 2007).

While the revenue distribution breakdown reveals much about the business structure of

Argentine football clubs it is critical to understand for the vast majority of clubs the total amount

of revenue generated is not sufficient to support the actual cost of operation. Collectively,

football clubs in Argentina reportedly carry a debt exceeding $1.4 billion, 60% of which is

attributed to Boca Juniors, Independiente, and River Plate alone.

Football clubs in Argentina face immense pressure to capitalize on commercial

opportunities to address these revenue shortfalls. Historically, most are limited in their capacity

to enhance stadium related revenue beyond match tickets because of antiquated stadia


infrastructure. Further, there has been a lack of coherent long term branding strategies among

the clubs and their corporate partners. However, several clubs have recently implemented new

and innovative ‘white space’ strategies aimed at generating capital to meet the rising costs of

supporting a competitive team in the Twenty-first century. The following section briefly

discusses the ‘white space’ analytical framework and provides examples of how clubs are

generating these atypical sources of revenue.

THE ‘WHITE SPACE’ AND ARGENTINEAN FOOTBALL

Harvard Business School professor Mark Johnson’s (2010) ‘white space’ concept

provides a useful general framework for long term success through innovative practices across

business contexts. Using case examples of sustainability struggles of large firms such as Xerox

and Polaroid, he suggests a business can fail even when it is ‘doing’ everything right and that it

is necessary for those in leadership roles to systematically anticipate and seek change in order for

a business to remain viable. This can be accomplished by identifying and capitalizing on new

revenue growth potential that is separate from the core function of the existing business, which

Johnson frames as being the essence of the ‘white space’. Ideally, this new ‘white space’ growth

potential will service existing customers in new ways or a completely new market (and perhaps

both). Businesses that fail to explore their ‘white space’ growth potential risk financial shortfalls

over the long term, which can be exacerbated by uncontrollable influences such as threats from

competitors, changes in government policies, and dynamic societal expectations.

If we reframe Johnson’s concept within the context of football we can begin to

conceptualize how some of Argentina’s top clubs (and elsewhere) are ‘seizing their white space’

opportunities. To do so we must begin with an assumption that football clubs act as businesses.


As previously outlined, Argentinean clubs are classified as non-profit civil institutions yet they

do seek to generate substantial revenue to support not only the services and infrastructure desired

by socios but also a competitive football team fans in Argentina demand. With this scenario a

club’s senior team and its football matches qualify as the core product being offered for

consumption whereby the bulk of revenue has traditionally been generated through media

contracts and player transfers and loans while a small percentage of revenue has been generated

from the sale of match tickets, membership dues, and commercial licensing and sponsorship

agreements. With Johnson’s ‘white space’ concept outlined and football clubs assuming the role

of businesses we can now explore examples of ‘white space’ strategies being implemented in

Argentina.

Stadium hospitality

The majority of football clubs in Argentina’s first division utilize stadiums that were

constructed over fifty years ago. These structures are generally simplistic outdoor concrete or

steel venues that were initially designed to satisfy the most basic needs of fans, including a space

to view the match (terraces and seats), restroom facilities, and limited points of sale for

concessions. In general, stadiums in Argentina lack many of the modern amenities that are

readily available in Europe and North America hence these venues have historically been

regarded as limited in their capacity to generate revenue beyond game-day ticket sales. It is

important to point out that football clubs in Argentina are typically part of a larger athletic club

structure, which possess and maintain social centers and recreational facilities that accommodate

a variety of club functions and activities. Football stadiums are usually stand alone structures


located off site; some are a few blocks from the club’s social and recreational facilities while

others may be miles away.

Several of Argentina’s top clubs have realized the value their stadiums have for fans and

corporate partners alike beyond access on game-day and they have begun to add features and

services to accommodate a wide variety of functions year-round beyond sporting events and the

occasional music concert. Using Tuan’s (1974) work on the affective qualities of public spaces

social geographer John Bale (1994) has suggested stadiums are topophilic places with embedded

meanings for those who experience them. Specifically, there exists an intense psychosocial

relationship between stadiums and sports fans. It is this relationship, along with an appreciation

for history and nostalgia, that explains the affective appeal sports venues (old or new) have for

people around the world (e.g. Manchester United’s Old Trafford, Boston Red Sox’s Fenway

Park, FC Barcelona’s Camp Nou, etc.).

Initially constructed in 1928, Club Atlético Independiente’s Libertadores de América

stadium reopened in 2009 after undergoing a major renovation that spanned two and a half years.

Beyond upgrades to the general terrace and seating sections, restrooms, and concourses the club

decided to incorporate the addition of a restaurant with an exclusive view of the pitch, a museum

and gift shop, and conference and meeting space. These new spaces within the Estadio

Libertadores de América are now accessible to fans, local business and organizations, as well as

the team’s corporate partners for a fee and thus collectively represent opportunities to generate

‘atypical’ revenue through the club’s most conspicuous asset year-round.

Club Atlético Boca Juniors’ stadium, which was constructed in 1940 and is known

colloquially as La Bombanera, features similar amenities following a series of renovations over

the past several decades. Its most recent overhaul transformed the stadium’s simplistic cafeteria


into the chic and modern 1905 Restaurant. Before the renovation, the cafeteria served basic fare

(e.g. sandwiches, coffee, soda) and was primarily used by club staff and players. Today, the new

full service 1905 Restaurant features custom catering menus and is marketed as an exclusive and

unique space for private banquets, meetings, and festive celebrations such as birthday parties

year-round. Depending on the package selected and the amount of money paid, the 1905

Restaurant experience provides options for autographed merchandise as well as personal access

to private team training sessions.

A number of other clubs have also recently begun to develop similar ‘white space’

stadium initiatives. Racing Club, located just blocks from rival Independiente in the Avellaneda

suburb, has made its meeting and conference facility within the Juan Domingo Perón stadium

available to its corporate partners. With a capacity of 400, the space is marketed as ideal for

business meetings, product launches, breakfasts, as well as conferences and congresses. In

2009 Club Atlético River Plate opened the doors to its own museum (Museo River) within the

famed Estadio Monumental. For a fee that ranges from 65 to 80 pesos, fans and tourists can

purchase the opportunity to view historic memorabilia and artifacts from club legends such as

Labruna, Di Stéfano, and Passarella as well as clever visual and cinematic displays depicting the

club’s triumphs among other features. While some of these initiatives are common in stadiums

in North America and Europe they are in fact rare in Argentina and represent a relatively new

business opportunity for Argentinean football clubs.

Merging commercial licensing with tourism

Many first division clubs in Argentina have contracts with the license division of the

media outlet Torneos y Competencias (TyC). TyC manages the commercial use of the clubs’


official symbols and logos and brokers a variety of merchandising opportunities. Officially

licensed club merchandise in Argentina is diverse in nature and ranges from the typical team

branded apparel and schools supplies to culturally specific items such as logoed mate gourds,

asado cutlery, and the popular Christmas and New Year’s holiday food staple pan dulce (sweet

bread infused with candied fruit). These team branded items are available at a number of the

clubs’ official stores throughout the country, though pirated memorabilia and jerseys (kits) are

also prevalent. As previously mentioned in this chapter, commercially licensed merchandise

comprises a very small percentage of a club’s overall revenue in Argentina. However, Boca

Juniors has extended its commercial licensing agreement beyond the typical merchandising

opportunities brokered by TyC.

In 2012, Boca Juniors agreed to a unique licensing agreement that paved the way for

what is being promoted as the world’s first football team themed hotel. The club partnered with

Grupo Solanas’ upscale hotel management subsidiary Design Suites to develop the boutique

Hotel Boca in the heart of Buenos Aires. Located just one block off of the picturesque Avenida

9 de Julio (July 9th Avenue), the hotel is walking distance to many of the city’s most iconic

landmarks, including the national Congress building, Casa Rosada (presidential office), and the

Obelisk. Hotel Boca boasts 18 stories and a total of 85 guest rooms. Each suite is decorated in

the color scheme of the club (blue and yellow) and named in honor a club legend. Framed

portraits and murals of club icons, such as Diego Maradona, are integral parts of the hotel’s

décor throughout the facility as well. From the outside, the metallic and glass building embodies

Design Suites’ contemporary brand while the interior clearly signifies a blending of this brand

with Boca Juniors positioning as one of the country’s most revered clubs. In addition to

attracting domestic and international tourists the facility offers several banquet and meeting


spaces that can accommodate the gamut of corporate meetings, social functions, and incentive

travel. Specifically, the La Bombanera ballroom (named after the team’s famous stadium) can

accommodate events up to 400 people, features state-of-the-art audio/visual technology, and

offers complete turnkey event coordination and production services. Further, the La Barra Brava

bar and La Boca restaurant within Hotel Boca provide an upscale dining experience that offers

customers a unique experience that includes glimpses of team memorabilia. For an additional

fee, the Hotel Boca partnership offers transportation to the stadium, entry into the team’s

museum, a stadium tour, and the opportunity to participate in interactive football themed team

building exercises at the club’s Casa Amarilla practice facility.

Perhaps the most unique ‘white space’ initiative recently implemented in Argentina was

the opening of an exclusive section within the serene Parque Iraola cemetery for Boca Juniors

fans in 2006. For a fee that ranges from $US1,000 to $US5,000, die hard supporters of the club

can purchase a burial plot alongside other passionate fans as well as some of the club’s legendary

players. Previously, a popular tradition among many of the club’s supporters was to have one’s

ashes scattered within the team’s La Bombanera stadium. Also, it was not uncommon for fans to

decorate the burial sites of family members and loved ones with Boca Juniors themed accessories

(flags, blue and yellow flowers, etc.).

The club was astute to understand the popular terrace chant from fans pledging to support

the club from heaven coupled with the practice of spreading ashes within the stadium and

decorating the burial sites of loved ones with club themed items was a revenue generating

opportunity. Initially, former club president Mauricio Macri considered developing a new

cemetery however legal restrictions governing the development and operation of private

cemeteries prevented the club from acting on the plan. As a fall back, Boca Juniors brokered a


commercial licensing agreement with the existing Parque Iraola cemetery, which is located about

20 miles south of Buenos Aires. The cemetery made available one hectare of land where fans

can purchase one of 3,000 exclusive burial plots as a final resting place. Also, a local funeral

parlor has been granted a commercial license to construct and sell caskets bearing the club’s

colors and official crest for a fee that ranges from US$600 to US$800. Fans are offered both the

casket and plot independently or in a package and in return Boca Juniors is given a percentage of

the revenue from the transaction. The Boca Juniors sector of the Parque Iraola cemetery is

demarcated with a stone fountain featuring the club’s crest along with flowerbeds featuring floral

arrangements in the club’s blue and yellow colors. Also, the grounds feature transplanted turf

from the pitch at the La Bombanera stadium.

Global expansion of player development academies

Immanual Wallerstein’s World-Systems Analysis (2004) suggests the world’s economic

structure can be subdivided into core, semi-periphery, and periphery nations whereby resources

are transferred from underdeveloped parts of the world (periphery) to developed, industrialized

parts of the world (core). As others have noted, this lens can be used to view talent migration

within the football industry. Specifically, football clubs in peripheral countries tend to develop

and export players to leagues in the industrialized core of Europe (e.g. England, Spain, Italy,

France, etc.) in exchange for lucrative sums of money.

In Argentina (and elsewhere) this talent export system has long been a source of revenue

for football clubs, particularly since the onset of the media-sport nexus made significant capital

available to teams in Europe to acquire the surplus of talent available in the football crazed

nation. Clubs in Argentina operate their own local youth academy that aims to develop


exceptional talent. Many of the top academy players are eventually awarded a professional

contract and represent the club’s first division team. If evaluated favorably these budding stars

are often presented the opportunity to be transferred or loaned to clubs abroad, resulting in large

amounts of revenue for the club (and player). For example, Independiente cashed in on their

prodigy Sergio (Kun) Agüero in a 2006 transfer deal worth €23 with Atlético de Madrid (Spain).

River Plate has brokered blockbuster transfer deals in the past featuring a number of local

players the club developed within its academy program, including Hernán Crespo, Pablo Aimar,

and Javier Mascherano among others. Likewise, Boca Juniors collected a significant return on

investment for developing players such as Fernando Gago and Carlos Tevez within its academy

system, both of whom enjoyed stints with two of the largest clubs in the world (Real Madrid and

Manchester United respectively).

In the past, Boca Juniors’ academy system was grounded in this traditional method of

operation. As Ramallo and Wilde (2008) note the academy system was a focus of former club

president Mauricio Macri, who sought to mitigate high player acquisition costs by emphasizing

the development of local talent from within the organization. For Macri, it was more cost

effective for the club to nurture its own players rather than simply buying talent from the smaller

domestic clubs on the open market. Additionally, if and when these academy players emerged as

potential superstars the club could reap the financial benefits following a transfer or loan to a

club abroad.

In the aftermath of Macri’s departure the club continues to emphasize its academy

initiative on a global scale under current president Daniel Angelici. The existing model includes

mutual player development initiatives in 10 different countries, including Mexico, Brazil, Japan,

Canada, India, Peru, Kuwait, Indonesia, Chile, and El Salvador. By operating its academy


worldwide Boca Juniors is afforded the opportunity to identify and acquire talented players in

other markets but perhaps more importantly the club is able to expand brand awareness well

beyond its domestic market. The latter outcome lays the groundwork for potential market

penetration with respect to international consumption of the Boca brand. Once foreign market

penetration is achieved the club can make decisions about which additional revenue generating

opportunities it will seek to capitalize on in the new market (e.g. licensed merchandise,

international dues paying socios). Further, the club could then re-assess the degree to which its

international market penetration increases the value of its corporate partnerships (e.g. jersey

sponsor) and increase the financial terms accordingly.

Perhaps the most intriguing aspect of the Boca Juniors academy system is its newest

venture, which features an independent stand alone academy in Long Island, New York. On

paper the new Boca Juniors Academy-USA, which opened in March 2014, aims to nurture and

develop the skills and attributes players need to succeed with a goal to provide a pathway from

the Academy to the highest competitive level. While this may seem to be consistent with the

club’s Buenos Aires based operation a closer look reveals the potential for a creative and steady

stream of revenue through the academy itself. Participation fees for the youth academy (U12-

U13) and pro-academy (U14-U18) spring season cost $850 per player, the club’s 1-week spring

break camp demands a fee of $250 per player, and the six day and five night residential summer

camp program costs nearly $1,000 per player. Certainly, fees are needed to offset operation

costs. However, according to a recent business report by the American Camp Association, youth

camps in the United States (sports camps included) generate significant profit margins even after

expenditures are accounted for (Bialeschki, 2012). Therefore, the Boca Juniors Academy-USA

initiative should be viewed not only as a talent development program but also as a clever


marketing tool that facilitates brand awareness and global consumption as well as an

international ‘white space’ business strategy aimed at capitalizing on the profit potential of the

youth camp market in the USA.

CONCLUSION

Professional sport organizations implement a range of business initiatives to generate

revenue. The diversification of revenue streams not only helps to optimize the profit potential of

organizational assets but also serves as a financial safety net. Stadium related revenue (e.g.

match tickets, concessions, merchandise, and advertising), corporate partnerships, and media

broadcasting rights typically account for the vast majority of revenue for football teams around

the world.

Athletic clubs in Argentina support the practice of a wide variety of leisure and

competitive sporting activities at the amateur and professional level however football is an

unrivaled national passion that transcends demographics. A club’s professional football team

and the matches it plays have commercial potential beyond interest from local dues paying club

members yet the revenues generated by most teams in Argentina are not sufficient to offset costs

hence many face substantial debts. Football clubs in Argentina generate the bulk of their

revenue from player transfers and loans and the Fútbol Para Todos media contract between the

league and the government. A small percentage of club revenue is derived from commercial

merchandising, the sale of mach tickets, and dues paying club members.

To address revenue shortfalls Argentina’s football clubs face immense pressure to

capitalize on commercial opportunities. Several of the top clubs have begun to explore and

capitalize on their commercial ‘white space’ by implementing new and creative revenue


generating initiatives outside the typical core business model. While stadium related hospitality

and tourism initiatives of teams such as Independiente, River Plate, Boca Juniors, and Racing

may be considered typical for clubs in North America and Europe contextual and cultural

differences have presented local challenges to implementing these strategies in Argentina in the

past. Other initiatives outlined in this chapter, particularly those of Boca Juniors (e.g. Hotel

Boca, Boca cemetery), are not common practices elsewhere. The authors are aware of only one

other stand alone team themed hotel currently in operation in the world; the Amari Buriram

United in Thailand. With respect to a team specific supporter cemetery only Schalke 04’ of

Germany offers a similar service. Created six years after Boca’s Parque Iraola cemetery

partnership and conveniently located adjacent to the Veltins-Arena stadium grounds in

Gelsenkirchen, Schalke’s “Fan Field” cemetery opened in 2012 and is considered the first of its

kind in Europe.


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