#RealMadrid 2018/19 accounts cover a disappointing season, the first after selling Ronaldo, when they were 3rd in La Liga, semi-finalists in the Copa del Rey and exited the Champions League in the last 16. They also had 3 coaches: Lopetegui, Solari & Zidane. Some thoughts follow.
#RealMadrid profit before tax increased by €10m from €43m to €53m (profit after tax up €7m to €38m). Revenue was a record €757m, but only rose €6m (less than 1%), while profit on player sales shot up €45m to €99m. Profit restricted by a €46m impairment provision. 
The only #RealMadrid revenue stream to increase was international competitions & friendlies, up €13m (13%) to €114m, but the others stagnated: broadcasting was down €5m (3%) to €173m; membership fees & stadium revenue down €1m to €173m; while marketing was flat at €295m.
#RealMadrid wages dropped €37m (8%) from €431m to €394m, split football €362m & basketball €32m, though there were increases in player amortisation and depreciation, up €20m (20%) to €119m, and other expenses, up €12m (5%) to €239m.
#RealMadrid 2018/19 €38m profit after tax would have been higher than any club’s profit in 2017/18 with Real Sociedad and Sevilla next best at €29m & €26m respectively. Barca’s 2018/19 profit was only €5m. Worth noting Madrid’s figures include €26m loss from basketball.
#RealMadrid benefited from €99m profit on player sales, very largely due to Cristiano Ronaldo’s major transfer to Juventus. This was only just surpassed by Barcelona’s €101m profit from this activity and was €45m higher than the prior season’s €54m.
#RealMadrid are highly profitable, mainly due to their ability to generate revenue. In fact, they have made €222m profit before tax in last 5 years, averaging €44m a season. Budgeted profit for 2019/20 is €41m, though this includes €42m reversal of an impairment provision.
Even though #RealMadrid profits have been remarkably consistent, it is evident that they have become increasingly reliant on player sales with average annual profits more than doubling in last 5 years to €57m. The 2019/20 budget includes €94m, already achieved by summer sales.
#RealMadrid EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), or cash operating profit, rose from €94m to €124m, though less than 2016 peak of €161m. Including player sales, this increased from €147m to €233m. Club figure of €176m includes impairment.
Having grown around €200m in the previous 4 years, #RealMadrid revenue was basically flat in 2018/19, only increasing by €6m – just 0.8%. However, the 2019/20 budget estimates significant revenue growth of €65m (9%) to €822m, due to higher sponsorship and merchandising deals.
In contrast to #RealMadrid’s flat revenue, Barcelona saw massive revenue growth from €690m to €852m, so they are comfortably ahead of Madrid’s €757m, turning a €61m deficit into a €95m surplus. Partly due to Barca taking merchandising inhouse a year earlier than Madrid.
However, #RealMadrid €757m revenue is still miles ahead of Atletico Madrid €304m and Sevilla €165m (2017/18 figures). Looked at another way, the combined €1.6 bln revenue of Barcelona and Real Madrid is €100m more than all the other La Liga clubs combined.
In the last edition of the Deloitte Money League, based on 2017/18 accounts, #RealMadrid again had the highest revenue in the world, leapfrogging Manchester United, with a revenue mix of: commercial 47%, broadcasting 33% and match day 20%.
However, as we have seen, #RealMadrid will be overtaken by their great rivals Barcelona when the 2018/19 Money League is published, though they are still a fair way above Manchester United – €708m (at an estimated exchange rate of 1.13).
#RealMadrid had the highest commercial income in the 2017/18 Money League with €356m, ahead of Bayern Munich €349m and Barcelona €323m. Barcelona will overtake them in 2018/19 after bringing retail activities in-house, but Madrid will do the same in 2019/20 to bounce back.
It’s an “arms race” in shirt sponsorships and kit deals, but #RealMadrid’s are among the very highest with Emirates and Adidas paying €70m and €110m a year respectively. Emirates deal runs to 2022, while Adidas agreement has been extended to 2028 (merchandising is on top).
#RealMadrid had the 2nd highest broadcasting revenue in the world in 2017/18 with a total of €251m, €28m more than Barcelona. The difference was almost entirely due to Champions League money, as Madrid won the trophy that season, while Barca went out in the quarter-finals.
After years of individual deals in Spain, La Liga have introduced a collective deal, based on 50% equal share, 25% performance over last 5 years and 25% popularity (1/3 for average match day income, 2/3 for number of TV viewers). Gross income reduced by liabilities (7%).
Even after the changes, Barcelona and #RealMadrid still receive by far the highest TV income from La Liga’s TV deal with around €140m apiece, followed by Atletico Madrid €100m, then a big gap to Sevilla and Athletic Bilbao €70m. Lowest payments went to Girona & Leganes €40m.
#RealMadrid will benefit from La Liga international TV rights rising by 30% in 2019/20, giving a total of €2.0 bln. Although still a long way behind the Premier League €3.4 bln, it is comfortably ahead of others: Bundesliga €1.4 bln, Serie A €1.3 bln and Ligue 1 €1.2 bln.
Based on my estimate, #RealMadrid earned €81m from the Champions League, even though they went out in the last 16, compared to €89m the previous season (when they won it for the third year in a row). Other Spanish clubs: Barcelona €110m, Atletico Madrid €80m & Valencia €45m.
Reasons the decrease In CL money was relatively small: (a) total Champions League revenue increased 54% in 2018/19 (due to higher TV rights); (b) a new UEFA coefficient payment (based on performances over 10 years), where #RealMadrid had the highest ranking, giving them €35m.
Thanks to their fantastic record in the Champions League, #RealMadrid have earned a hefty €383m from European competition in the last 5 years, which is €38m and €81m more than Barcelona and Atletico Madrid respectively. Gap to Barca narrowed in 2018/19.
#RealMadrid match day revenue of €143m, including membership fees, was the 2nd highest in the world in 2017/18, only behind Barcelona €145m, but ahead of #MUFC €120m and #AFC €112m. Decrease in 2018/19 due to no Supercopa de Espana and lower receipts from friendlies.
#RealMadrid average attendance fell 8% from 65,653 to 60,598 in 2018/19. This was still the second highest in Spain, well below Barcelona 75,000, but ahead of Atletico Madrid 56,000.
The #RealMadrid assembly has approved the €575m redevelopment of the Santiago Bernabéu stadium with estimated completion date of 2023. Funding largely from two American banks, Bank of America Merrill Lynch and JP Morgan, who will charge 2.5% annual interest over 30 years.
#RealMadrid football wage bill fell €33m (8%) from €395m to €362m, mainly due to a €56m decrease in bonuses. Total wages, including €32m basketball, dropped €37m to €394m, though are budgeted to rise again to €456m in 2019/20, which would be a new record for Madrid.
#RealMadrid €362m wage bill is now significantly lower than Barcelona €501m with the gap widening from €92m to €139m. Still €150m more than Atletico Madrid €212m, though Atleti might increase when 2018/19 accounts are published.
Clearly, #RealMadrid wage bill is a lot higher than other Spanish clubs (with the exception of their Catalan rivals). It is the same as the bottom 12 clubs in La Liga put together. Or, looked at another way, it is more than Atletico Madrid and Sevilla combined.
Despite the decrease, #RealMadrid’s €362m wage bill is still the third highest in Europe, just below #MUFC €375m, but ahead of PSG €332m, Juventus €328m and Bayern Munich €303m.
Following the fall in wages, #RealMadrid wages to turnover ratio improved from 53% to 48%, one of the lowest in Spain and much better than Barcelona 59%. That said, this is still higher than the 42-45% the club achieved between 2012 and 2016.
It’s much the same story in Europe where #THFC 39% is the only leading club with a lower wages to turnover ratio than #RealMadrid 48%. The four highest (worst) are Juventus 71%, Atletico Madrid 70%, Roma 64% & PSG 61%. Interestingly, Madrid are exactly the same as Bayern Munich.
The other #RealMadrid staff cost, player amortisation (annual charge to write-down transfer fees), has significantly risen by £19m (23%) to €104m. Budgeted to rise by more than €50m in 2019/20 following significant expenditure on new players.
#RealMadrid total amortisation of €122m (including €18m depreciation) is the second highest in Spain, well below Barcelona €160m, but twice as much as Atletico Madrid €58m. Reflects 2018/19 arrival of the likes of Vinicius, Courtois, Odriozola, Mariano Diaz and Brahim Diaz.
After two years of net sales, partly due to a transfer ban after club found guilty of breaching rules on signing youth players, #RealMadrid have splashed the cash in the last two years, with nearly half a billion (€470m) gross spend – €264m net spend.
As a consequence, #RealMadrid had €111m net spend in the last four years. Although this was the second highest in La Liga, it was only a third of Barcelona’s €327m in this period.
Indeed, in gross spend, #RealMadrid’s €541m over the last four years was only the third highest in Spain, obviously well below Barcelona’s massive €883m, but also behind Atletico Madrid’s €585m.
#RealMadrid have made considerable efforts to reduce their debt, so much so that they have actually had net funds for the last 4 years, though down from €107m to €27m in 2019 (per club’s definition, including transfer fees & stadium liabilities). Bank borrowings are only €50m.
#RealMadrid cash balances are €156m. The high level is partly due to the influx of membership fees in June, just before the semi-annual wage payment in July, though worth noting that cash has averaged €166m over the last 8 years.
Transfer fees owed rose from €56m to €116m in 2019, while amounts owed by other clubs are much the same at €79m, giving net transfer debt of €37m. This is still significantly lower than the €211m net transfer debt 10 years ago.
Most clubs now use transfer debt, i.e. stage payments, as a form of financing, though #RealMadrid €116m gross transfer debt was actually among the lowest, far below Barcelona €261m, Juventus €221m and #MUFC 212m. Likely to change after this summer’s transfer campaign.
Using the broadest possible definition of debt, #RealMadrid total liabilities increased from €595m to €606m in 2019, including €163m accruals, €150m personnel, €57m trade creditors & €26m public administrations. Less than half of Barcelona and #MUFC, both around €1.2 bln.
However, this picture will change when #RealMadrid take on €595m of debt for stadium development (not reflected in these accounts). There will be 3 drawdowns in July 2019, 2020 and 2021. After a 3-year grace period, club will pay fixed annual amount of €29.5m from 2023 to 2049.
#RealMadrid are a cash machine, generating over a billion from operations in the last 8 years, though this has fallen from €195m in 2016 to €91m in 2019. Spent €67m (net) on players, €33m capex, €14m tax, €10m loan repayment and €1m interest, leading to €34m fall in cash.
Since 2012 #RealMadrid have used half of their available cash €536m on player purchases, but have also invested €250m into stadium improvements and Real Madrid City. They also spent €114m on loan/interest payments and €102m on tax, while increasing cash balance by €61m.
#RealMadrid have had a clear strategy: success on the pitch leads to higher revenue, allowing them to pay more to players. This model has worked well for many years, though has now stalled. The Bernabéu stadium development will also represent a major challenge going forward.
