Skip to main content

Real Madrid more reliant on revenue from player sales

The authoritative Swiss Ramble reviews the 2018/19 accounts of Real Madrid. Profit before tax increased by €10m from €43m to €53m (profit after tax up €7m to €38m). Revenue was a record €757m, but only rose €6m (less than 1%), while profit on player sales shot up €45m to €99m. Real Madrid are highly profitable, mainly due to their ability to generate revenue. In fact, they have made €222m profit before tax in the last five years, averaging €44m a season.

Even though Real Madrid profits have been remarkably consistent, it is evident that they have become increasingly reliant on player sales with average annual profits more than doubling in the last five years to €57m. The 2019/20 budget includes €94m, already achieved by summer sales.

The only revenue stream to increase was international competitions and friendlies, up €13m (13%) to €114m, but the others stagnated: broadcasting was down €5m (3%) to €173m; membership fees & stadium revenue down €1m to €173m; while marketing was flat at €295m. However, the 2019/20 budget estimates significant revenue growth of €65m (9%) to €822m, due to higher sponsorship and merchandising deals.

The €38m profit after tax would have been higher than any club’s profit in 2017/18 with Real Sociedad and Sevilla next best at €29m and €26m respectively. Barca’s 2018/19 profit was only €5m. Worth noting Madrid’s figures include €26m loss from basketball.

The club benefited from €99m profit on player sales, very largely due to Cristiano Ronaldo’s major transfer to Juventus. This was only just surpassed by Barcelona’s €101m profit from this activity and was €45m higher than the prior season’s €54m.

Based on the Swiss Ramble's estimate, Real Madrid earned €81m from the Champions League, even though they went out in the last 16, compared to €89m the previous season (when they won it for the third year in a row). Thanks to their fantastic record in the Champions League, Real Madrid have earned a hefty €383m from European competition in the last five years, which is €38m and €81m more than Barcelona and Atletico Madrid respectively.

Match day revenue of €143m, including membership fees, was the second highest in the world in 2017/18, only behind Barcelona €145m, but ahead of Manchester United €120m and Arsenal €112m.

The €362m wage bill is now significantly lower than Barcelona €501m with the gap widening from €92m to €139m. It is still the third highest in Europe, just below Manchester United.

Following the fall in wages, the Real Madrid wages to turnover ratio improved from 53% to 48%, one of the lowest in Spain and much better than Barcelona 59%. That said, this is still higher than the 42-45% the club achieved between 2012 and 2016.

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...
Post a Comment
Read more