New rumors around the fabulous Brazilian footballer. Neymar Jr transfers from Paris Saint German to Real Madrid? Two years ago all the sport sections of the newspapers were full of it: Brazilian striker Neymar Jr making a transfer from FC Barcelona to Paris Saint Germain for the astronomical amount of 222 million euros. One could not visit a football site or blog, turn on a sports news programme or late-night talk show without it mentioning the mega transfer. Experts from the football world had their say on how such transfers work. There were suggestions that the internet and social media had influenced the transfer. This posed the questions: how large is the network value of the Brazilian footballer? Do football clubs use the digital networks of their players?
The last three years we have discussed the subject of value creation with a number of agents, Professional Football Organisations (BVOs) and also the football association. If it concerns the network value of a footballer or football club, then this is a subject that barely is on the agenda of most players and clubs. The transfer and the football boot deals are often cited as being the primary issues. Football has not reached that level yet, people often say. It is striking, also because Dutch broadcasting organisation NOS writes in its three-part series about transfer sums. “It has always been the case that top footballers can connect with a large audience, making them willing advertising tools. But that world has changed considerably in the last decade. The main cause: the internet, and primarily social media.”
The NOS are right: the internet and social media ensure the company value for the next generation. In our paper ‘The Voice — a supplementary revenue model’ that I wrote together with Pim van Berkel, we define value creation by internet and social media. Essentially, it concerns being able to create, distribute, maintain and optimise current and new digital relationships on various internet platforms, where additional and future net cashflows can be generated (in)directly and in a demonstrable way. This is the definition for brand equity, the network value.
Background network value
I wrote that digital ecosystems are business ecosystems in our book vanAnaloognaarDigitaal. We regularly research how DJs, music companies and festivals (in the dance industry) should use their digital systems as a business ecosystem. With a number of them we have actually designed their organisation in this way. A good example is Hardwell. The Dutch top DJ that approaches his platforms as a business ecosystem. Continuing from this thought, you could also look at Neymar as a company or organisation with a digital business ecosystem.
Together with Fanalists we have attempted to determine a part of Neymar’s brand equity. At the moment of calculation, the footballer has a gross total of approximately 171 million fans across the various social media channels. Naturally, he has his own website and perhaps there is an own database that can also count. In view of the fact that these figures are not known, let’s leave them. We are focusing primarily on the digital network value of the footballer. When determining the value, the willingness and amount, based on market data, that a brand would pay to be included in the network of the footballer are considered.
The calculations show that the minimum value of the data already amounts to approximately 100 million euros. When the team (or the agent) that represents Neymar’s digital interests, knows how to identify the data and to develop it with the appropriate rights, then the value will quickly rise towards 1 billion euros. The total estimated scope is 2 billion euros with 100% deployment of the potential.
The question which naturally arises is: is this network value not rather a lot for a footballer? If this value would only be based on sports performance, that was probably the case. However, we believe the footballer has also became a company in itself. With a network, fans and connections. And with (possible) additional revenue models. When you realise that the sports performance leads to connections with fans, then you can draw a comparison between footballers and DJs.
The channels of artists or their labels can be approached as an entire business ecosystem. A system that has revenue models such as ticketing, merchandising, sponsoring and music. It is not just artists that have such a business ecosystem, footballers do too. The revenue models for a footballer, in addition to their salary, can exist from clothing deals, media deals, affiliate deals, endorsement deals and the exploitation of the digital network.
If you compare the system of Neymar with the Vodafone Enterprise Group from an earlier chapter about Talpa, then you can see that this organisation has a value (Ycharts, 2017) of approximately 115 billion dollars (99 billion euros).
Companies such as Vodafone and Facebook are busy keeping their client values high every day. Maintaining and expanding the connections is part of the core task of maintaining, expanding and cashing in on the value. A footballer, but also a club, with a large network of fans, perhaps for better or worse, has been given this task if they wish to cash in on their network.
Still a way to go
If you zoom in on the profile value of the footballer Neymar, you will quickly see that there is still much profit to be made. His colleague Ronaldo signed a lifetime deal (Forbes, 2017) with Nike for a whopping 1 billion euros. This is already an indication where things can go in terms of sponsor value. In 2016, Ronaldo generated a media value of 500 million dollars for the sports brand and that mainly came from his digital network, that consists of more than 260 million connections. That is just over half of the amount of connections that Vodafone has. These astronomical amounts show there is a huge willingness to pay to be part of a footballer’s network.
Did Paris Saint Germain get a bargain or has Neymar made a poor deal? If the football club makes optimal use of Neymar’s connections, then it appears to be a bargain. The network value of Neymar exceeds the transfer amount. Whether the football club can, and actually will, use the footballer’s network, will be revealed. In practice it often appears that the connecting step between all information flows and data is missing. Data is often not connected correctly to arrive at the right context. The correct connection with the fan or follower is hard to achieve, as the data to hand suggests (Rankingz, 2017). An area still to be discovered by the football world.
The football world must really focus on three things. Which rights does a club purchase? Should a player use his digital network to sell season tickets, merchandise and other club products? Does a club contribute to the player’s brand equity? Should a club receive reimbursement from a player for this?
Messi, Ronaldo and also Neymar have hundreds of millions of followers across the globe via Facebook, Instagram and Twitter. It is clear to us that footballers and clubs should make agreements and must think about their network and network value. We ask out loud whether there is awareness of new value creation in the football world. We will keep following, calculating and valuing the networks of footballers and football clubs. Footballers and clubs who do not fully exploit their network value are missing out. A chance not to be missed.
- This post is a pre-read of Part 2 — Chapter 6 of my new book ‘Digital Assets’ the translation of the Dutch publication ‘Digitaal Vermogen’.
- Also read the publication ‘EDM and the Digital Domain’