Real Madrid burdened by record debts

The Spanish football giant’s debts keep growing — now standing at nearly €600 million.

They are the most valuable sports club in the world, and right now also the biggest talking point. That’s why they want to break the football transfer record — willing to pay up to €120 million for Premier League star Gareth Bale. But Real Madrid now faces a problem: record debts. According to the Guardian, “Los Blancos” owe €590 million — over €150 million more than three years ago. “The biggest clubs like Real Madrid are all in debt. This is basically normal. What’s important is that the debt is in a reasonable proportion to the club’s value and income,” football agent Jozef Tokos told the Economic Daily.

No sanctions — for now
Why is a club with a superstar like Cristiano Ronaldo struggling with debts? “These are various loans that have to be repaid. Investments into the stadium. But these debts don’t make Real Madrid a vulnerable team and shouldn’t threaten them,” added the Slovak football agent. In total, Spanish clubs owe €3 billion, with Real Madrid and Barcelona making up the largest share. The royal club owes money to banks and the tax office. For now, however, UEFA’s Financial Fair Play rules mean Real Madrid is not at risk of being banned from European competition — unlike Manchester City. Ultimately, it will be up to the shareholders of the Spanish giant to decide how to handle the growing debt. “It’s for the club’s shareholders to know exactly how the debt is structured and decide on the right strategy,” said sports manager Karel Tejkal. Still, Real should not be under threat in terms of earnings — Spaniards continue to dominate the marketing market, TV rights sales, and gate receipts. “They’re like a three-headed monster,” sports investment banker Nishant Tella told Forbes.

Bale transfer will push debt higher
Even with record debt, Real remains eager to sign Gareth Bale. According to media reports, it’s only a matter of time before the most expensive transfer in football history is completed. If they pay the €120 million for the Welsh star, then over a five-year contract, their debt will grow by roughly €20 million annually. “It will then depend on the club’s ability to make use of this investment. A lot of the money could be recouped from the marketing generated around this player,” said Tokos. Debt will also rise due to the planned renovation of the Santiago Bernabeu stadium, with the club aiming to invest €320 million in the coming years.