Sunday, February 11, 2007

Real Madrid's Big Spending

Awhile ago I wondered out loud how Real Madrid can spend the kind of money they do. They recently have spent over €70 million on transfers alone to bring in the likes of Diarra, Emerson, Higuaín, Gago and others. Not that long ago they were on the verge of bankruptcy. They only got out of that situation after the city of Madrid spent hundreds of millions to buy Real Madrid's training grounds property. How are they able to turn around and spend the kind of money they have? A study by Deloitte cited in a Soccernet article gives us on clue. Real Madrid brought in $371 million in revenue for 2005-2006. This is a considerable amount more than other leading clubs such as Barcelona and Manchester United. Nevertheless, this only shows us revenues. The question now is figuring out what their expenses are for the club. After all, we're at time in the game where player wages are as big of if not larger issue than transfer fees.

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