Real Madrid have said that they have a €300m transfer budget his summer, but €68m went on Kaká followed by €92m on Ronaldo. It is understood that €100m will come from cash in hand, €100m from additional revenues hopefully generated by new players and €100m from bank loans. The Spanish economy may be in dire straits, with banks not lending to anyone, but they have been prepared to give Real Madrid a four year €300m facility.
Real Madrid have said that they have a €300m transfer budget his summer, but €68m went on Kaká followed by €92m on Ronaldo. It is understood that €100m will come from cash in hand, €100m from additional revenues hopefully generated by new players and €100m from bank loans. The Spanish economy may be in dire straits, with banks not lending to anyone, but they have been prepared to give Real Madrid a four year €300m facility. Real has been hit by the loss of sponsors and corporate hospitality during the recession, but it is still among the richest clubs, if not the richest, in the world in terms of cash flow and assets. With 50 per cent of the commercial rights, and the chance that signings like that of Ronaldo, will boost merchandising income, the club believes that the deal makes business sense. A club insider told the Financial Times, ‘It is better to buy Ronaldo for €92m than pay €20m for a player of slightly less calibre and profile.’
Real’s spending is being masterminded by Florentino Peréz who was restored to the club’s presidency on June 1st. He has promised to spend heavily to restore the club to the summit of Spanish and European football. His ‘galacticos’ spending spree at the beginning of the decade was underpinned by the proceeds of the redevelopment of the club’s old training grounds on Madrid’s northern fringe. Pérez is the chairman and main shareholder in construction group ACS. As Spain’s largest builder and civil works contractor, the company has been hit hard by the global recession. But ACS is in better shape than most, which is a testament to Mr Pérez’s commercial acumen and a huge circle of influential friends and contacts. He has a net worth of £1bn and was taken to his first Real match at the age of four. During his first presidency of the club from 2000 to 2006, his big spending ways and ambition won him many admirers.