Real Madrid is a non mercantile sports association owned by the members of the club. Most other Spanish clubs (with the notable exception of FC Barcelona) are SADs (sociedad anonima deportiva) a kind of limited companies which are governed and regulated by a special set of laws accruing to the world of sports.
So in the case of Real Madrid the club does not risk any take overs or being sold to a foreign billionaire. The main objective of the club to provide a great sporting experience for the fans means that it is not necessarily run with an ambition of maximizing profits as most companies usually whether they be public or privately held.
But the budget does have to be passed at the yearly assembly where the club members gather to vote on such issues as who should be the President and to approve or reject the budget.
Real Madrid’s finances are audited by Ernst and Young. Another consultancy Deloitte and Touche publishes a richlist over the richest clubs in the world of soccer every year in February / March. Real Madrid has been on top of that list for 5 or 6 consecutive years. The list looks at revenues but not at profits or other measures.
There are primarily 3 revenues streams for football clubs: sponsor deals (including merchandising), TV , stadium receipts.
A look at the development in revenues for Real Madrid will explain why Real Madrid is number 1.
Over the past 10 years the club has managed to grow its’ revenues on average with 26% well above the average of most companies listed on the Madrid stock exchange. In parenthesis the main lift between each year according to revenue stream.
For the season 1999/2000 the club had revenues in Euros of 118 million.
2000/01: 138 million (sponsorships)
2001/02: 152 million (stadium)
2002/03: 193 million (sponsorships)
2003/04: 236 million (sponsorships + TV)
2004/05: 276 million (sponsoships)
2005/06: 292 million (TV)
2006/07: 351 million (TV – sponsorships)
2007/08: 366 million (stadium)
2008/09: 407 million (sponsorships)
2009/10: (estimated) 422 million (yet to be decided)
As can be seen from the numbers above the Real Madrid has been able to grow its’ revenues substantially over all 3 revenue streams though it does vary from year to year where the growth has come from.
In the case of the stadium receipts these have been increased when major rounds of renovation of the Bernabeu stadium have been concluded. Thereby the number of corporate seats has been increased and the overall facilities have been increased as well meaning that it has been possible to raise the ticket prices.
In the case of TV revenues they increase in value every time one contract expires and a new deal is negociated. So there is a time lapse between the periods of growth according to the length of any previous contact. The one revenue stream with the most flexibility is the sponsorship category. This revenue stream depends on the contracts negotiated with athletic apparel sponsor – shirt sponsor + a number of other sponsor who wish to associate their brands with the brand of Real Madrid. One example is Audi which supplies cars to Real Madrid’s first and second team. All revenue steams depend on on the field performance as well as the personal brands of the players in the squad. But even though Real Madrid’s results have not always been stellar the club has managed to continue to grow revenue across all revenue streams and to add value to its’ brand.
To see the Real Madrid financial statement click on the following link… The report is in Spanish: Real Madrid finances
Later we will take a closer look at where the revenues come from and how the income is spent…
To be continued…..
Possibly Related Posts:
- Real Madrid name and number kit girl the looks
- Real Madrid jersey 12/13 name kit & the girl
- Real Madrid jersey 12/13 sitting down
- Real Madrid jersey 12/13 – cool machine!
- Real Madrid girl | The Machine