Where do Real Madrid get their money? (2 Viewers)

Paid-off-Ref

Paid-off-Ref

Senior Member
#1
Dec 16, 2004
4,102
#1
Hey,

I'm studying economics and accounting and am about to graduate. Real Madrid's transfer campaign so far has really left me scratching my head. Where do they get their money?
First of all, football clubs are not profitable at all. Most clubs, for example Juventus, do not make a profit. When they do, they are not high at all, and certainly not 220 million pounds (Madrid's transfer kit this season). For example, Barcelona is expecting a 25 million euro profit this year after winning the Champions League.
You could argue that Real Madrid have retained their earnings over the years, but everybody knows that they spend more than most every summer. Also Real hasn't sold that many players or other "assets" at high prices in recent years.

So there are two other ways of financing this transfer campaign.

A) Attract investors and get them to supply capital
B) Going into debt.

Conclusion. Since I haven't heard of any big shot investing at Real Madrid, Perez must have financed this spending through a huuuuuuuge loan. Perez is no genius, and is in fact taking a huge gamble that might not work out.
 

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Martin

Martin

Senior Member
#5
Dec 31, 2000
56,913
#5
I think the general consensus matches your conclusion. It is credit funded and it is a big gamble. From what I've heard Perez is not using his own money in this, however he is no doubt using his position to get loans from banks.
 
The Curr

The Curr

Senior Member
#6
Feb 3, 2007
33,705
#6
Perez is worth $1.8 bil. He's the 397th richest person in the world.

I believe he can't directly spend his own money on transfers but I bet he can give "loans" to the club with virtually no interest.

Alos, Juan Carlos I helps them out whenever they need it.
 
Stephan

Stephan

Senior Member
#7
Nov 9, 2005
16,640
#7
Martin said:
I think the general consensus matches your conclusion. It is credit funded and it is a big gamble. From what I've heard Perez is not using his own money in this, however he is no doubt using his position to get loans from banks.
Click to expand...
ironically i read that the bank his loaning from, is in catalonia.
 
Nenz

Nenz

Senior Member
#8
Apr 17, 2008
10,472
#8
They're borrowing, a lot. But I don't know what bank is stupid enough to lend them that sort of money. Either way, I don't think they will be able to refinance this kind of debt unless they win CL and the championship next season.
 
OP
Paid-off-Ref

Paid-off-Ref

Senior Member
Thread Starter #10
Dec 16, 2004
4,102
  • Thread Starter
    • Thread Starter #10
    Perez being worth $1.8 billion doesn't mean anything. Probably the biggest part of that is the value of his shares in his construction company.
    Even if he was a sugerdaddy, he'd be a pretty weak one. I also doubt he's the one loaning Madrid. You'd have heard news of him selling shares or other assets to gain liquity.
     
    Bjerknes

    Bjerknes

    "Top Economist"
    #11
    Mar 16, 2004
    115,979
    #11
    Paid-off-Ref said:
    Perez being worth $1.8 billion doesn't mean anything. Probably the biggest part of that is the value of his shares in his construction company.
    Even if he was a sugerdaddy, he'd be a pretty weak one. I also doubt he's the one loaning Madrid. You'd have heard news of him selling shares or other assets to gain liquity.
    Click to expand...
    That may be true, but he could also have money stashed away in other accounts set aside for Madrid matters.
     
    Azzurri7

    Azzurri7

    Pinturicchio
    Moderator
    #16
    Dec 16, 2003
    72,692
    #16
    No offense or anything but the question itself is silly. They got Media, Tv behind them. They own their Stadium, they got stars in their teams, they got % of player's commercials/adv etc...

    Perez is spot on and he knows what he's doing. Purchasing stars will bring them money. Same with Zidane, Figo, Beckham era... difference is just that now they piad more but they'll recover faster.
     
    Mohad

    Mohad

    The Ocean Star
    #17
    May 20, 2009
    6,685
    #17
    They are a club who depend on its owners to finance them. Most big clubs in Europe have huge debt, and once their owners decide they're not going to drop any more cash into the team (like Berlusconi and Milan), the club then needs to sell their players to pay off any debts. That's why teams very often have periods where they are the best in the world, but after about a decade or so they're washed up because the owners don't give them any more money.
     
    Seven

    Seven

    In bocca al lupo, Fabio.
    #19
    Jun 25, 2003
    39,325
    #19
    They did just borrow the money by the way. Perez is worth a lot of money and that's why he could become president in the first place. If things go wrong, Perez is supposed to save them.
     
    .zero

    .zero

    ★ ★ ★
    #20
    Aug 8, 2006
    82,813
    #20
    perez will make this money spent back in no time. high volume revenue for the richest club in the world is a non-issue
     
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