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.

EURO 2022: Diversity issue shouldn’t spoil the party for England

SO FAR, the European Championship has been an extremely good advertisement for women’s football; crowds have been good, the football has been a vast improvement on previous competitions; and the host nation have been very un-English. In other words, they have been ruthless, scoring 14 goals in three games. Optimism has reached a high level, always a dangerous thing in England, and now Spain stand in their way in the quarter-finals.

But there’s also been some unwanted negatives. England’s team has been accused of lacking diversity, which isn’t the team’s fault, but it has, naturally, sparked off a debate about the lack of people of colour in the squad. Of course, this was the situation before the Euros kicked off, but three games in, the critics decided to launch their campaign. By the way, it wasn’t men who started this debate, it was a female journalist.

There are many ignorant men who insult women’s football and players, using outdated and unpleasant narratives to try and put them in their place. These are generally men who are out of step with today’s society. “Three irons on the shirt,” is just one social media “joke” that has been doing the rounds. These are not representative of contemporary football fans or indeed, the modern man.

Any slight criticism of women’s football is often met with equally stereotypical statements that include “boomer”, “gammon”, “mansplaining” or “misogyny”. Men are also accused of fearing the women’s game, that they worry it will become more popular than the male version. It might, but that day is far from imminent.

Listening to a recent phone-in when the subject of women’s football was discussed underlined this as a journalist responded to Simon Jordan when he admitted he doesn’t like it. Jordan is entitled to his view, although he does make a career out of being contrarian. Men that don’t like women’s football are not necessarily misogynistic, but they are invariably comparing it to watching their favourite Premier League side. It is apples and pears, as they say and such comparisons are unfair.

But what really puzzles some male fans is the coverage of the women’s game and the marketing behind it. Having worked in marketing for many years, I know that you can spin a good yarn out of anything, but on occasion, it does seem as though the media, the FA and the clubs are working just a little bit too hard to convince the world of the appeal of their product. The European Championship has been a success, but it should be, it has the leading countries in Europe involved. But on the domestic front, women’s football has a lot of work to do; the crowds are still disappointing, the competition is becoming as imbalanced as the men’s game; and the punditry has lapsed into cliché and jargon, just like the men. The “showpiece” occasions are well supported, but Women’s Super League football is as relevant, in terms of broad public appeal, as top level non-league football, which receives scant coverage in mainstream media publications.

Which brings us back to the diversity issue. Women’s football, from the outside, looks unlike the game we all grew up with. The demographic is certainly different and there is something of a middle class air about it. When you consider that some of the players and coaches have experience of banking, accountancy, law and currency exchanges, it seems very removed from the typical backgrounds of male players. If there is a lack of women of colour in the game, it may be young girls see the game as inaccessible. It doesn’t mean that women’s football is racist, but it does suggest the doors are not always open to the broader community. That said, there have been moments when the England team has run into problems around racism and sexism and this may have been a setback for the inclusion agenda.

The top WSL clubs may not be helping the situation. For example, of the current Arsenal and Chelsea squads, only five players are homegrown. Chelsea’s squad is multi-national with players from more than a dozen countries. Across Arsenal, Chelsea and the two Manchester clubs, just 48% are English. These are the habits of the Premier League, adopted by the WSL at a relatively nascent stage of development. The problem, if indeed there is a problem, is of their own making.

It could be argued that it is difficult for anyone to truly empathise who isn’t a person of colour, just as it is doubtful a non-Jew can accurately judge aspects of anti-semitism, but this is something that can be easily solved. By taking a look at the youth teams that form part of the England set-up, the FA can evaluate if there is truly something wrong or whether this is a temporary issue. The timing of the outburst was unfortunate, though, given England look to be on the brink of achieving something very tangible. This should be allowed to pour cold water on some exciting performances by Sarina Wiegman’s team.

Some believe this competition may be a point of “arrival” for women’s football and if England do emerge as champions, the WSL season in 2022-23 will be absolutely vital. If success on a grand scale doesn’t win over more people, and it may be that the untapped audience is actually men, than goodness knows what it will take to allow the game to step up a level.