The authoritative Swiss Ramble reviews Real Madrid’s2021/22 accounts, when they reported €20m pre-tax profit, though figures benefited from €316m once-off gain after selling stadium rights to Sixth Street. Football wages €478m. Financial debt was up to €1 bln due to stadium investment. Their finances benefited from the effects of COVID “gradually subsiding” and the consequent return of fans to the stadium.
They have budgeted for a further increase in revenue to
€770m in 2022/23, as the recovery from the pandemic continues. Looking further
ahead, the Bernabéu stadium development will represent a major challenge, but
also an opportunity to generate more money.
Work on the
development of Real Madrid’s Santiago Bernabéu stadium continues with €538m
investment to date (€259m in 2021/22)). Expected to be fully operational for
the 2023/24 season with a revised cost of €800m, but driving a “significant”
increase in revenue.
Although Florentino Pérez argued that club finances were awful
and football was “sick” when pushing for the European Super League, his club
has performed better than others during COVID, though these figures obviously
benefited from the major Sixth Street/Legends deal.
According to the Deloitte Money League, Real Madrid had the
second highest revenue in the world in 2020/21, with their €641m only surpassed
by Manchester City €645m, but comfortably ahead of Bayern Munich €611m,
Barcelona €582m, Man United €558m and PSG €556m.
Marketing revenue fell €24m (8%) from €314m to €290m (no
pre-season tour), but still highest in Spain, ahead of Barcelona €270m, Atleti
€96m & Valencia €20m. In 2021 they had 3rd highest commercial income in
Europe (per Deloitte), only behind Bayern and PSG.
It’s an “arms race” in shirt sponsorships and kit deals, but
Real Madrid’s are among the very highest in the world with Emirates and Adidas
paying €70m and €110m a year respectively. Both deals have been extended:
Emirates to 2026 and Adidas to 2028 (merchandising is on top).
Broadcasting income was flat at €311m, as higher revenue
from winning Champions League & La Liga was offset by €37m in prior year
deferred from 2019/20 for games played after accounting close. 2nd highest in
Europe in 2020/21, only below Manchester City.
Based on the Swiss Ramble’s estimate, RealMadrid earned
€133m for winning the Champions League, €23m more than prior season €110m (when
they reached the semi-finals). This was
much more than Atletico Madrid €90m, Villarreal €77m, Barcelona €64 and Sevilla
€52m.
They have earned
around half a billion Euros from European competition in the last 5 years,
which is €65m and €107m more than Barcelona and Atletico Madrid respectively.
Madrid have won the Champions League an incredible five times since 2014.
Wages
Football wages rose €106m (28%) from €372m to €478m, due to
prior year’s 10% salary cut in response to COVID, higher bonuses following
success on the pitch and higher termination payments. Total wage bill,
including basketball €41m, was €519m.
The €478m wage bill is now higher than Barcelona’s €432m,
though the Catalans’ new figure when they publish 2021/22 accounts will be
interesting. There was a big gap to
Atletico Madrid €266m, then Sevilla €133m and Athletic Bilbao €99m. Sixth
highest in Europe in 2020/21.
Despite the
revenue increase, RealMadrid wages to turnover ratio increased from 57% to 66%,
though still one of the lowest in Spain, much better than Barcelona 85%. The
club has budgeted a €69m reduction in football wage bill for 2022/23 from €478m
to €409m.
They spent €116m on player purchases in 2021/22, including
contingent payments from prior year acquisitions, with €49m net spend. Their
€832m gross spend in 5 years up to 2021 was the 6th highest in Europe, despite
spending only €45m in 2020/21. Interest
payments unchanged at €4m, so much lower than most elite European clubs in
2021, especially Barcelona €41m. However, worth noting that start of (fixed)
interest on stadium loans has been delayed: €575m (2.5%) to July 2023, €225m
(1.53%) to July 2024.
Of course, Real Madrid
do not benefit from owner funding (loans and share capital), unlike many other
leading clubs, whose business model is reliant on benevolent owners, e.g. in
the last 10 years Inter and Milan have received over €900m, with Chelsea and Manchester
City just under €800m.
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