Real Madrid are the richest club in football and they set and break their own world transfer records as a matter of course.
They recently splurged €100 million on Gareth Bale and had the temerity to describe the purchase as “cheap.”
A packed Bernabeu and hefty global merchandise revenues mean money is certainly coming into Real’s account.
But football finance guru, Gay de Liebana, says that the economic reality is not so rosy for Los Blancos.
De Liebana is one of Spain’s foremost economists. He believes that Real president Florentino Perez has whitewashed the club’s debt situation and has warned that the amount of money the Spanish giants actually owe to the bank could be crippling.
So grave is the situation that de Liebana thinks that Real’s ‘socios’ (owner-supporters) could lose hold of the club they love.
Perez maintains that Real’s debt is sitting at a manageable €90 million but de Liebana says that is not the case.
“Madrid’s debt is, effectively, €541 million,” he told AS.
“That represents 64 percent of its total liabilities.
“It is a very high debt and there is a problem. The short-term debt, which is €338 million, is higher than its current or liquid assets, which are €239 million.
“So there is €100 million in negative working capital.”
The economist grants that Madrid has enough “cash on hand” but says it is too risky to “abuse negative working capital.”
“The fact is that Madrid is so far in debt and has a big project for the stadium, so it could end up in a monumental situation, and have to convert itself into a limited company [Sociedad Anonima] and capital be injected in,” he said. “Then you would need a socio with the ability to bring that capital, or if not, the support of a benefactor.”
According to Soccernet, de Liebana is an Espanyol supporter, so his views should not be interpreted as bitterness or the jealousy of a rival.
But he thinks that in relation to the amount of money Real has lavished on players, they are effectively in a ‘win-or-bust’ situation.
“We are talking about 700 million invested [in players],” he said.
“That is an enormous figure, which really obliges you to win everything. You cannot have a club that invests so much and then does not win the Champions League. You must win La Liga, and the Champions League, and then leave the Copa del Rey for Espanyol.”