Real Madrid’s finances – a display of resilience?

REAL MADRID are on a bit of a cautious high at the moment; European and Spanish champions, in the middle of a stadium redevelopment programme and seemingly starting to bounce back from a financial perspective.  Preliminary figures for 2021-22 issued by the club provided further evidence of the resilience of their finances, despite losing around € 400 million through the pandemic.

Real have also started the 2022-23 season well and have a 100% record in the league and Champions League. Although Real were part of the aborted European Super League project, they remain at the forefront of European football.

Real have just reported a remarkable profit of € 13 million for the 2021-22 season, which continues their profitability through the covid-19 years. Their profit for was € 12 million higher than 2020-21 and even higher than 2020’s € 313,000. Their financial performance is in marked contrast to their bitter rivals, Barcelona, who have been mired in crisis over the past couple of years.

When Real won the Champions League last season, it was something of a surprise as many people wrote them off. Their squad has looked a little aged at times, but in 2021-22, they profited from a stellar year from one of their veterans, Karim Benzema who scored 44 goals. Likewise, their coach, Carlo Ancelotti, who returned to the club in 2021, demonstrated his skill in getting the best out of a bunch of seasoned professionals.

Real Madrid (the whole club), generated € 721.5 million in revenues in 2021-22, a 10% increase on 2020-21. This figure is higher than the last two seasons, but still around € 30 million below the peaks of 2018 and 2019. In 2022-23, the club anticipates revenues to head towards € 800 million and make a pre-tax profit of approximately € 5 million.

Interestingly, Real’s cash position has improved, rising from € 122 million to € 425 million. Furthermore, the club has a net liquidity position of € 263 million, a spectacular turnaround from 2021 when they had net debt of € 46.4 million. During the crisis, Real have reduced debt by more than € 300 million. The club’s liquidity felt the benefit of the € 360 million 20-year deal signed with Sixth Street/Legacy for use of the stadium.

During the pandemic, Real had to be relatively conservative around player acquisition and this may have contributed to their failure to land some of their targets in 2021 and 2022. Their net position across 2020-21 to 2021-22  was € 111 million in gross spend and € 274 million receipts, translating to a net positive of € 163 million. In 2022-23, they have spent € 80 million and recouped € 92 million. In the summer of 2022, there were a number of departures of players who had been on Real’s books for some years, notably Marcelo, Gareth Bale, Isco and Casemiro, the latter who was sold to Manchester United for € 70 million. As for the younger players, such as Vínicius Júnior and Rodrygo, they are starting to really flourish, although there are continued rumours they will try and secure Paris Saint-Germain’s  Klyian Mbappé in 2022-23.

Real’s president, Florentino Pérez, met with shareholders before announcing the closure of the books for 2021-22 and pointed to the club’s operational efficiency, investment capabilities and cost containment measures, all of which had contributed to the healthier cash and debt positions. Although the effects of the pandemic are clearly subsiding, they are still impacting revenues.

The Bernabéu remodelling is a major project and Real have taken further cash from the loan facility allocated for the project, making the total drawings so far to € 800 million. Real have had problems with their pitch this season, largely due to the new turf which has come from a part of Spain – Extramadura where summer temperatures have soared. The new-look stadium will include a mechanism that will allow the pitch to be stored underground.

Real’s full and segmentalised financial figures will be published in due course.

Metropolitano man meets the Mancunian candidates

THE CHAMPIONS League is riveting stuff when it reaches the knockout stage, and while Atlético Madrid versus Manchester United wasn’t a classic encounter, it was a fascinating match.

It helped the atmosphere was intense, loud and intimidating. Atléti fans love their club and engage with the occasion like it is the most important thing on the planet. Sadly, in the dead of night, Russia’s invasion of Ukraine became the biggest talking point of the next morning – football was put very much in its place.

Madrid had been humming to the sound of northern England for around 24 hours as the United faithful jetted in from Manchester and Alicante. They were easily noticeable by their lack of trousers, they wandered about the quaint streets and plazas in their best shorts, goose-bumped and shivering as 20 degrees became three or four. But they were in good voice, generally friendly and took little notice of the heavy police presence. The bars in places like Plaza Mayor did very brisk trade on the eve of the match.

Atléti have their problems at the moment, but United’s fans find it hard to live with the ongoing mediocrity they are struggling to shake-off. But their affection for Cristiano Ronaldo was evident as they sung his praises at every opportunity. The Atléti fans despise CR7, though, remembering his days with fierce rivals Real Madrid. 

Matchday at the Wanda Metropolitano for a big game throws Madrid into turmoil, the roads out to the stadium were gridlocked and some cabbies were reluctant to lend a hand. Nobody can seriously deny t’s a fabulous stadium, but is served by one Metro station, albeit a big one, and the surrounding area disappears into blackness as night falls. The arena was like a beacon, lit-up, futuristic and totally impressive. Amid the deep blue sky, you could hear the feint sound of Manchester United fans from a distance.

Inside, the roominess of the stadium and the quality of the seating made for a comfortable experience, but the noise was deafening and certainly distracting. The design meant that by looking up, the sky provided a black hole with a view to the stars. If the light pollution hadn’t got in the way, the 63,000 fans would have been treated to a natural planetarium.

Atléti’s fans were up for the game, no question. A giant tifo was unfurled, the loyalists held up red, yellow or white placards to create a visual display of allegiance and the club anthem was sung by all and sundry with no small amount of emotion. When the line-ups were announced, CR7 was jeered wholeheartedly. It was obvious he was going to be treated like a panto villain all evening.

Atléti had a lot of recognisable names missing from their starting line-up: Koke, Yannick Carrasco, Luis Suárez and Antoine Griezmann were either injured, suspended or sitting on the bench. United, who went into the game on the back of a 4-2 win at Leeds United, included yet-to-convince Jadon Sancho and at number seven, there was Ronaldo, finely sculptured, frowning and just dying to silence the home supporters.

For a while, it looked as though United had failed to turned up. It took just seven minutes for Atléti to open the scoring, the impressive Renan Lodi crossing and João Félix dived to send his perfect header in off the post. Brazilian international Lodi gave out-of-position Victor Lindelöf a hard time in the first half, leaving United fans puzzled why Ralf Rangnick chose to omit natural right backs in favour of the Swedish centre half.

It was easy to fear for United in the first half as Atléti struck the woodwork through Sime Vrsaljko. Every time they attacked, a goal looked a possibility. In truth, United were fortunate to go in at half-time just a goal down, Atléti’s pressing and refusal to let United rest on the ball was dominating the occasion. Meanwhile, on the touchline, Diego Simeone was like a human semaphore, leaping around, waving his arms, protesting, pointing and shouting. Conversely, Rangnick looked like an academic pondering his next powerpoint presentation. Will these characters be at their respective clubs in 2022-23?

The game changed in the second half and United discovered they could kick Atléti’s players, after all. Ronaldo was anonymous for most of the game, so much so, he scored zero in Marca’s player-ratings. To be fair, he was fouled at every opportunity and his team-mates didn’t seem to be able to find him very often. Atlético might have sewn the game up with a little more ambition, but they got a shock in the 80th minute when United substitute Anthony Elanga scored with a crisp and confident finish after Bruno Fernandes found him with a perfect subtle pass through the defence.

It was quite hard to believe United were now on the brink of a decent result after being second best in the first 45 minutes. They enjoyed more than 65% of possession, but a lack of pace and conviction was their undoing.

The goal triggered off a wave of chanting from the United fans who were perched high in the stadium with banners emphasising the broad appeal of the club – Stoke, Oswestry, Hull and others. Elanga was the subject of the singing, the young Swede providing a vision of a brighter future with a clearer direction, perhaps.

The game ended all-square, which makes the second leg an intriguing prospect, but with just three shots on target between them in the first game, one might have expected better from two of the world’s elite clubs.

Both teams really need to get through to make their seasons worthwhile, so it will be one to watch but it is hard to imagine United finding it easier at Old Trafford. Atlético have made a career out of being awkward opponents.

United’s fans went back to the plaza bars relatively happy, although the journey to the centre was longer than most might have expected. However, it is hard not to have an enjoyable time in Madrid, one of continental Europe’s go-to cities and a genuine football hub.