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9.13.2009

Where Wealth Comes Madrid?


When a number of clubs in England face a pile of debt, including Liverpool, and others have to lower ticket prices for spectators revenue, Real Madrid instead prepared a budget of 300 million euros to recruit new players.

What does Madrid would be an anomaly in this time of financial crisis. German Bundesliga record revenues often never even bought a player with a sleek price - regardless of its popularity league only 3-4 at the world-class.

The question which arose later from wells Madrid money come from? Famous Spanish club was not owned by Russian oil tycoon or a Middle Eastern sheikh who is also a millionaire from the oil. But Madrid still able to create a record for the second most expensive transfer in the world worth 67.2 million euros to recruit Brazilian star Kaka from AC Milan.

Significant answer is a great revenue earned per year Madrid. Deloitte public financial observers also called Madrid as the richest club in the world for four years in which Manchester United trailed in second place.

Madrid had a net income to 366 million euros per year. Most of the audience came from the ticket because Madrid has an average audience of the world's third highest. With the Santiago Bernabeu stadium capacity reaching 79,400 seats, the ticket revenue from the sector are promising. No wonder many who also rebuilt the club and build a large stadium with a capacity today.

The second is the revenue wells Madrid from TV broadcast rights contracts. Madrid collaboration with MediaPro broadcast rights for the duration of seven years with the funds to reach 1.1 billion euros. The value is only for the local match broadcast rights and not including the Champions League or other event outside the country. That means a minimum of Madrid broadcasting rights pocketed profits of about 155 million euros per year just from the local action and it is almost twice that obtained from the MU.

Another advantage of Madrid is the Spanish income tax is not as high as in other European countries. Spanish government cites only 23 percent of income tax from foreign players in the first five years.

For example, if Kaka Madrid pay 10 million euros after tax per year then Madrid will only spend around 12 million euros. Compare if Kaka playing at Manchester United is England's champion needs to raise up to 18 million euros per year. Not to mention the British government's plan that would raise income taxes of the rich to 50 percent.

That's just a matter of a year. If five years there will be a difference of 32 million euros for one player. While Madrid can use the same amount to hire three or four players in one year.

Madrid is the last wells of its status as a non-profit agencies each year although clearly have an advantage. With that status will not always have to Madrid to deposit about 32 million euros to pay off their debts. This is contrary to obligations MU. Moreover, Madrid has close connections with a number of banks that are also in political influence and social pressures are the same.

With a non-profit status of the Madrid too big and too important to be confused by the pressure of debt as is usually experienced by most clubs. Social status, political and economic interests were different from Madrid on the other.

With all that well, no wonder Madrid is always clad in glamorous. Would it then be to ensure achievement in the field, it becomes something else. Moreover, it strengthens the stars bring the base ticket revenue and broadcast rights. When coupled with the achievements of the rich will get richer.

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