Gracia Football Club
Market Sizing Business Operations Strategy
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Prompt
Gracia FC, a historically small and provincial football club, is in its fourth consecutive year in Liga 1 (the top Spanish league). The Club’s board and manager has made clear the club’s goal and expectation: to stay in the top league. The CEO of the club also wants to improve cash flow in order to buy top players (e.g. Messi). Additionally, the board wishes to develop its stadium to top league standards and to increase the match day capacity to top league standards.
Guide - Provide only if requested
Football margins: Gracia FC’s are usually around 20% (candidate should use this as a proxy to cash flow for calculations)
casebook | ESADE MBA Consulting Club
1
2
3
4
5
Communication & Presence 2
3
4
5
4
5
3
4
5
3
4
5
4
5
Business Acumen
Cookies
Traps
¤¤ Applying a scenario based approach based on the information acquired ¤¤ Identifying other implications of expanding the stadium (e.g. increased sponsorship, advertising and sales channel commissions)
¤¤ Not taking into account risk factors and other qualitative factors in the assessment
Gracia paid a construction company to investigate two options Developing existing stadium and increasing capacity by 50% at a cost of 5m € (expected utlization rate: 100%) Building a brand new stadium seating 40,000 would cost 40m € (expected utlization rate: 80%) For both investments, discount rate is 10%
56
Analytical & Problem Solving Skills
1
2
3
Common Sense & Practicality 1
x
Stadium tickets sales: represent 30% of total revenue (other sources are TV rights and merchandising)
qualitative
Notes
1
The club’s CEO asks you what he should do with the stadium.
Current stadium capacity: 15,000 Average ticket price: 20€ Average Liga 1 stadium capacity: 35,000 Approximate number of games per year at stadium: 30
quantitative
2
Creativity 1
2
Energy & Fit 1
2
3