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Real Madrid's money

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TheBunnyman

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Where the fuck has it all come from? I know they're a big, rich club, but £56m on Kaka, and they're still planning to buy Ronaldo, Silva, Xabi and others. They haven't spent anything like this in recent seasons, so what is the source of this sudden vast wealth in the middle of a global financial crisis? Anyone know?
 
They have spent massively in recent seasons, it's just that the money has been spent on players with lower profiles than what we're used to when it comes to them. They certainly didn't think twice about chucking 40M on a couple panic buys (Diarra and Huntelaar) in Jan.
 
Rough guess: they have huge marketing income and (probably) are not having to squander it on servicing debt like their main rivals in terms of income, Utd, are.

It's no secret that the headline costs of the players they buy are massively offset by the return they make on merchandise related to those players. Their President even says this openly. Beckham was probably the ultimate signing in that respect, as he was for LA Galaxy too.
 
wikipedia has an explanation, basically no debt and strong brand.... not sure what that adidas deal is but it looks impressive

They also seem to make shit loads of money out of players like beckham and kaka with image rights:



It was under Florentino Pérez's presidency (2000-2006) that Real Madrid started harbouring its current ambition of becoming the world's richest professional football club.[63] The club ceded part of its training grounds to the city of Madrid in 2001 and sold the rest to four corporations: Repsol YPF, Mutua Automovilística de Madrid, Sacyr Vallehermoso and OHL. The sale wiped out its debts, paving the way for the club to buy the world's most expensive players such as Zinédine Zidane, Luís Figo, Ronaldo and David Beckham. The city had rezoned the training grounds for development, a move which in turn increased their value, and then bought the site.[20] Although there is no evidence thereto, the critics allege that the city overpaid for the property to help with the club's finance.[64]

The sale of the training ground for office buildings cleared Real Madrid's debts of €270m and enabled the club to embark upon an unprecedented spending spree which brought big-name players to the club. Moreover, the money gained was spent on a state-of-the-art training complex on the city's outskirts.[65]

After the 2004–05 season, Real Madrid ended Manchester United's eight-year reign as the biggest earners in world football. Real's income to the year ending 30 June 2005 jumped 17 per cent to €275.7m (£190m).[66]

Though Pérez's policy resulted in increased financial success based on the exploitation of the club's high marketing potential around the world, especially in Asia, it came under increasing criticism for being focused too much on marketing the Real Madrid brand and not enough on the performances of the team.

In January 2007, Real Madrid paid their debts of €224 million and fell to second spot behind Manchester United. However, they reached the top again two months later after completing an image rights deal with Adidas worth 762 million. Manchester United's debt was €872 million in 2007, down from €1.25 billion in 2005.[67]

In September 2007, Real Madrid was considered the most valuable football brand in Europe by BBDO,[68] and is ranked as the second most valuable club in football with a value of €951 mil (£640 million / $1.285 billion) as of May 2008, only beaten by Manchester United with a value of 1.8 billion euros (£906 million)[69][69]

A study at Harvard University reached the conclusion that Real Madrid "is one of the 20 most important brand names and the only one in which its executives, the players, are well-known. We have some spectacular figures in regard to worldwide support of the club. There are an estimated 246 million people worldwide who follow Real Madrid only beaten by Manchester United with a estimated worldwide fan base of 333 million." [70]
 
As mentioned above they use the high profile players to attract interest for big money friendlies in the off season, Perez recently said they got 15m for playing one game a few years ago.

Similarly they used the interest in high profile players to sell TV rights to countries around the world that had suddenly become interested in them.

Merchandising is small change compared to these things.
 
[quote author=Rosco link=topic=34104.msg885946#msg885946 date=1244664756]
As mentioned above they use the high profile players to attract interest for big money friendlies in the off season, Perez recently said they got 15m for playing one game a few years ago.

Similarly they used the interest in high profile players to sell TV rights to countries around the world that had suddenly become interested in them.

Merchandising is small change compared to these things.
[/quote]

And yet, when they lost 4-0 to us at Anfield this season, they didn't have a single 'high profile' player in their team. We had two of the biggest superstars in world football. So why can't we do what they do?
 
[quote author=David Byrne link=topic=34104.msg885950#msg885950 date=1244664898]
Loans and debt.
[/quote]

In a credit crisis? Anyway, according to that wiki article, they paid off their debt a few seasons ago.
 
[quote author=TheBunnyman link=topic=34104.msg885998#msg885998 date=1244667385]
[quote author=Rosco link=topic=34104.msg885946#msg885946 date=1244664756]
As mentioned above they use the high profile players to attract interest for big money friendlies in the off season, Perez recently said they got 15m for playing one game a few years ago.

Similarly they used the interest in high profile players to sell TV rights to countries around the world that had suddenly become interested in them.

Merchandising is small change compared to these things.
[/quote]

And yet, when they lost 4-0 to us at Anfield this season, they didn't have a single 'high profile' player in their team. We had two of the biggest superstars in world football. So why can't we do what they do?

[/quote]

Well the TV rights are controlled by the Premier League so our hands are tied there.
 
Perez is one of the richest men in Spain, the construction company he chairs (AGS or something?) makes a billion a year, it is the largest in Spain and has a lot of government contracts which is where his contacts within the Madrid government come from.

He is able to get banking and finance on very favourable terms and his board at Real Madrid is stuffed full of businessmen and cronies. it's not clear how he's doing this but it's fair to say he has access to funds. My bet is he is just adding to Real Madrid's debt based on a) their television and sponsorship deals and b) the security he provided as president of Real Madrid which was about 60 million euro's that probably came via his company. it's no different to Hicks and Gillett except Real Madrid is much bigger in revenue terms and Perez is just a temporary (elected) owner
 
Perez has openly said that he's putting Real into debt to get these players, saying that they'll recoup most of the money on shirt sales and merchandise etc. I forget where I saw it. I think they actually made money off the Beckham deal a while ago.
 
[quote author=TheBunnyman link=topic=34104.msg885998#msg885998 date=1244667385]
[quote author=Rosco link=topic=34104.msg885946#msg885946 date=1244664756]
As mentioned above they use the high profile players to attract interest for big money friendlies in the off season, Perez recently said they got 15m for playing one game a few years ago.

Similarly they used the interest in high profile players to sell TV rights to countries around the world that had suddenly become interested in them.

Merchandising is small change compared to these things.
[/quote]

And yet, when they lost 4-0 to us at Anfield this season, they didn't have a single 'high profile' player in their team. We had two of the biggest superstars in world football. So why can't we do what they do?

[/quote]

we have been doing what they've been doing, borrowing money and buying players at least over the last 2 years the accounts show that.

Real Madrid are just doing it on a bigger scale, they have double our revenues and are armed with a 150 million tv deal, sponsorship and a 90,000 seater stadium that sells out nearly every other week. also, most of these transfer deals will be paid off in installments and Perez believes that the names he's buying will sell shirts, increase sponsorship, sell out the stadium more often and grow revenues even more.
 
[quote author=TheBunnyman link=topic=34104.msg885928#msg885928 date=1244663790]
Where the fuck has it all come from? I know they're a big, rich club, but £56m on Kaka, and they're still planning to buy Ronaldo, Silva, Xabi and others. They haven't spent anything like this in recent seasons, so what is the source of this sudden vast wealth in the middle of a global financial crisis? Anyone know?
[/quote]


  • [li]They flogged off their training facilities in prime Madrid surburbs for top dollar[/li]
    [li]they negotiate their TV contracts seperately[/li]
    [li]They have always been better at marketing than all bar our friends part-way down the M62. [/li]

Compared that to us - Selling Mellwood wouldn't even pay the interest on our debt, We are tied into the group bargaining structure within th EPL for TV rights and we've been fucking embarrasingly bad at marketing for as long as I can remember.
 
[quote author=Dee link=topic=34104.msg886040#msg886040 date=1244670615]
[quote author=TheBunnyman link=topic=34104.msg885928#msg885928 date=1244663790]
Where the fuck has it all come from? I know they're a big, rich club, but £56m on Kaka, and they're still planning to buy Ronaldo, Silva, Xabi and others. They haven't spent anything like this in recent seasons, so what is the source of this sudden vast wealth in the middle of a global financial crisis? Anyone know?
[/quote]


  • [li]They flogged off their training facilities in prime Madrid surburbs for top dollar[/li]
    [li]they negotiate their TV contracts seperately[/li]
    [li]They have always been better at marketing than all bar our friends part-way down the M62. [/li]

Compared that to us - Selling Mellwood wouldn't even pay the interest on our debt, We are tied into the group bargaining structure within th EPL for TV rights and we've been fucking embarrasingly bad at marketing for as long as I can remember.


[/quote]

I'm actually tired of hearing this "we're shit at marketing" thing.

Go and look at the figures, they don't really support the argument.
 
What do you do Rosco if you don't mind me asking? You seem like some sort of freelance secret accountant with access to all the clubs figures. ;D
 
[quote author=Rosco link=topic=34104.msg886041#msg886041 date=1244670757]
I'm actually tired of hearing this "we're shit at marketing" thing.
Go and look at the figures, they don't really support the argument.
[/quote]

Really 😱

I know this is more your field Ross - What figures and how do they show competence? Prior to joining us one of Rick Parry's strengths was supposed to be around brand strengthening, so I'd be interested to know the facts.
 
[quote author=Halmeister link=topic=34104.msg886042#msg886042 date=1244670979]
What do you do Rosco if you don't mind me asking? You seem like some sort of freelance secret accountant with access to all the clubs figures. ;D
[/quote]

I'm not an accountant.

I do have all the accounts saved on my laptop though. They're available from the Companies House website.

The difference in earnings between us and other clubs is down to our very low matchday revenues. Ours is in the region of 40m per year, Arsenal and United are around 95-100m a year.

We're behind United in terms of what people call marketing - but only by a few million.
 
[quote author=Halmeister link=topic=34104.msg886042#msg886042 date=1244670979]
What do you do Rosco if you don't mind me asking? You seem like some sort of freelance secret accountant with access to all the clubs figures.  ;D
[/quote]

I think he's a university student  reading Accountancy or Law
 
[quote author=Rosco link=topic=34104.msg886046#msg886046 date=1244671277]
I graduated more than three years ago Dee.
[/quote]

Bloody hell - time flies! So you're rich now  ;D  .... and more often sober
 
Cheers.

So basically, we need a stadium then? Good job that's just around the corner.
 
[quote author=Halmeister link=topic=34104.msg886048#msg886048 date=1244671481]
Cheers.

So basically, we need a stadium then? Good job that's just around the corner.
[/quote]

hehe .. yeah exactly.
 
[quote author=Dee link=topic=34104.msg886047#msg886047 date=1244671354]
[quote author=Rosco link=topic=34104.msg886046#msg886046 date=1244671277]
I graduated more than three years ago Dee.
[/quote]

Bloody hell - time flies! So you're rich now ;D .... and more often sober
[/quote]

Not exactly rich, no.
And time does fly because it's actually four years since i graduated. I've been wasting a lot of time in the past few years
 
[quote author=Rosco link=topic=34104.msg886041#msg886041 date=1244670757]
[quote author=Dee link=topic=34104.msg886040#msg886040 date=1244670615]
[quote author=TheBunnyman link=topic=34104.msg885928#msg885928 date=1244663790]
Where the fuck has it all come from? I know they're a big, rich club, but £56m on Kaka, and they're still planning to buy Ronaldo, Silva, Xabi and others. They haven't spent anything like this in recent seasons, so what is the source of this sudden vast wealth in the middle of a global financial crisis? Anyone know?
[/quote]


  • [li]They flogged off their training facilities in prime Madrid surburbs for top dollar[/li]
    [li]they negotiate their TV contracts seperately[/li]
    [li]They have always been better at marketing than all bar our friends part-way down the M62. [/li]

Compared that to us - Selling Mellwood wouldn't even pay the interest on our debt, We are tied into the group bargaining structure within th EPL for TV rights and we've been fucking embarrasingly bad at marketing for as long as I can remember.


[/quote]

I'm actually tired of hearing this "we're shit at marketing" thing.

Go and look at the figures, they don't really support the argument.
[/quote]

Manure still pull in 15m a year more than we do and that's after Ayre grew the revenue by 20% each of the last two years. So we WERE shit at marketing, we are now better but still nowhere close to being a "few million" behind manure.
 
[quote author=rebel23 link=topic=34104.msg886033#msg886033 date=1244669450]
Perez is one of the richest men in Spain, the construction company he chairs (AGS or something?) makes a billion a year, it is the largest in Spain and has a lot of government contracts which is where his contacts within the Madrid government come from.

He is able to get banking and finance on very favourable terms and his board at Real Madrid is stuffed full of businessmen and cronies. it's not clear how he's doing this but it's fair to say he has access to funds. My bet is he is just adding to Real Madrid's debt based on a) their television and sponsorship deals and b) the security he provided as president of Real Madrid which was about 60 million euro's that probably came via his company. it's no different to Hicks and Gillett except Real Madrid is much bigger in revenue terms and Perez is just a temporary (elected) owner



[/quote]

Yeah, that's the kind of thing I expected to be the answer - vague dodgy government contracts and secret dealings. I knew I could rely on you, rebel.

Any possibility that Kaka and Ronaldo will actually be paid for through arms sales or drug dealing? That would be ace.
 
[quote author=drizzt link=topic=34104.msg886080#msg886080 date=1244696796]
[quote author=Rosco link=topic=34104.msg886041#msg886041 date=1244670757]
[quote author=Dee link=topic=34104.msg886040#msg886040 date=1244670615]
[quote author=TheBunnyman link=topic=34104.msg885928#msg885928 date=1244663790]
Where the fuck has it all come from? I know they're a big, rich club, but £56m on Kaka, and they're still planning to buy Ronaldo, Silva, Xabi and others. They haven't spent anything like this in recent seasons, so what is the source of this sudden vast wealth in the middle of a global financial crisis? Anyone know?
[/quote]


  • [li]They flogged off their training facilities in prime Madrid surburbs for top dollar[/li]
    [li]they negotiate their TV contracts seperately[/li]
    [li]They have always been better at marketing than all bar our friends part-way down the M62. [/li]

Compared that to us - Selling Mellwood wouldn't even pay the interest on our debt, We are tied into the group bargaining structure within th EPL for TV rights and we've been fucking embarrasingly bad at marketing for as long as I can remember.


[/quote]

I'm actually tired of hearing this "we're shit at marketing" thing.

Go and look at the figures, they don't really support the argument.
[/quote]

Manure still pull in 15m a year more than we do and that's after Ayre grew the revenue by 20% each of the last two years. So we WERE shit at marketing, we are now better but still nowhere close to being a "few million" behind manure.
[/quote]

We were ?

So we aren't now ? (Which is what I've said)

And making 50m a year from marketing isn't being shit at it, the fact of the matter is that for a long time Man United have had a better product to market. Of course they'll make more. How are you supposed to get people interested in a fourth placed team that play overly cautious football ?

There's no marketing genius out there who could have possibly helped us overhaul United in that regard. The return we could get from improving this end is much smaller than the return from improving our stadium.
 
[quote author=Rosco link=topic=34104.msg886085#msg886085 date=1244703297]
[quote author=drizzt link=topic=34104.msg886080#msg886080 date=1244696796]
[quote author=Rosco link=topic=34104.msg886041#msg886041 date=1244670757]
[quote author=Dee link=topic=34104.msg886040#msg886040 date=1244670615]
[quote author=TheBunnyman link=topic=34104.msg885928#msg885928 date=1244663790]
Where the fuck has it all come from? I know they're a big, rich club, but £56m on Kaka, and they're still planning to buy Ronaldo, Silva, Xabi and others. They haven't spent anything like this in recent seasons, so what is the source of this sudden vast wealth in the middle of a global financial crisis? Anyone know?
[/quote]


  • [li]They flogged off their training facilities in prime Madrid surburbs for top dollar[/li]
    [li]they negotiate their TV contracts seperately[/li]
    [li]They have always been better at marketing than all bar our friends part-way down the M62. [/li]

Compared that to us - Selling Mellwood wouldn't even pay the interest on our debt, We are tied into the group bargaining structure within th EPL for TV rights and we've been fucking embarrasingly bad at marketing for as long as I can remember.


[/quote]

I'm actually tired of hearing this "we're shit at marketing" thing.

Go and look at the figures, they don't really support the argument.
[/quote]

Manure still pull in 15m a year more than we do and that's after Ayre grew the revenue by 20% each of the last two years.  So we WERE shit at marketing, we are now better but still nowhere close to being a "few million" behind manure.
[/quote]

We were ?

So we aren't now ? (Which is what I've said)

And making 50m a year from marketing isn't being shit at it, the fact of the matter is that for a long time Man United have had a better product to market. Of course they'll make more. How are you supposed to get people interested in a fourth placed team that play overly cautious football ?

There's no marketing genius out there who could have possibly helped us overhaul United in that regard. The return we could get from improving this end is much smaller than the return from improving our stadium.
[/quote]

You may know a thing or two about law and accounts, but marketing/advertising has very little to do with the logic you stated (although it helps, of course). There is so much more Liverpool could have done, and still could do, to generate a far greater amount from worldwide marketing.
 
I think definitely think that there were several aspects of the club from a commercial viewpoint could have been handled better but there is truth to what Ross says - Real and Man Utd have been a much more attractive product over the years. That is in part down to success and in part down to the players they've had.

Things seem to be on the up though. Our media offerings (website and channel) are profitable and doing well. We seem to be upping the ante in Asia with the soccer schools etc. In order to take it to the next level, we're really going to have to start winning things again and buying a couple of Torres' would help in both respects.
 
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