What was most remarkable about this week’s Football Money League wasn’t Real Madrid’s presence at the top; the most prestigious name in sports with a futuristic stadium for sale was always poised to make big money. It’s a question of how much room there is to turn their record revenue into more talent on the field.
Madrid has long been a money-making force. It’s just that in previous eras of the Galacticos, these revenues quickly lined the pockets of Juventus, Manchester United and Tottenham. Club president Florentino Perez didn’t just define excellence through success on the pitch. Real Madrid wasn’t just the best because they won all the biggest trophies. They also won the biggest prizes in the transfer market, and they did it because they would spend more than anyone else.
No more. Wednesday the first club to cross the billion euro revenue mark fielded a team built for a total of $370 million in transfer fees. A full starting XI dismissing Salzburg 5-1 for about the cost of a Chelsea midfield three… and a third of that money had gone to Jude Bellingham.
Madrid are generating the highest revenues world football has ever seen, at a time when they have reduced one of the biggest costs a club has to pay: their transfer bill. Since the start of the 2020-21 season – the summer they paid nine figures to manage the decline of Eden Hazard – the Spanish and European champions have spent $324 million on new signings, according to Transfermarkt. This is no less than the Chelseas and Paris Saint-Germains of the world. Crystal Palace, Marseille, Leicester City: all have let go more on new acquisitions than the team which has just brought in $1.1 billion. Through five windows, Madrid, the club that put ‘another coat of gold paint on the Bentley’ out of pride, is making a profit in the transfer market.
The most impressive aspect? Despite all this, they manipulate the football market as they wish. Every club must respond to Perez’s vision of a new type of business or risk losing its best talent for one song. Bayern Munich, Chelsea and Paris Saint-Germain have seen their stars exit on free transfers. It seems more likely than not that Liverpool are next. Earlier this month they rejected Madrid’s offers for Trent Alexander-Arnold, who is free to sign a pre-contract deal whenever he wants.
It would be a difficult choice not to make. Like Antonio Rudiger and David Alaba before him, Alexander-Arnold won everything he could. The drumbeat of the Spanish press highlights Madrid’s desire. The Santiago Bernabeu offers new challenges to the Ballon d’Or factory and a pretty interesting salary to go with it. Alphonso Davies, who is expected to reject the lure of Madrid and extend his contract at Bayern Munich, is rather the exception than the rule.
Real Madrid top Football Money League with $1 billion in revenue to widen gap on Manchester City
James Bengé
The question looming behind Madrid’s new era of free transfers is what damage it could do to the wage bill. After all, if the money that would now have been paid to the club had turned into signing fees and agent bonuses, there would be little savings to be made. The reality is that few teams are better placed than Madrid to cope with UEFA’s squad cost controls. Their players’ salaries represent 48 percent of their turnover, according to Deloitte. Among the Money League top 10, only Tottenham pays a lower proportion of its revenue to the first team. Their off-the-field strategy only helps, including hosting hugely profitable Taylor Swift concerts in the past as well as hosting the NFL’s Miami Dolphins, who will play a home game next season at the stadium.
“Increasing your revenue is an ideal way to reduce your payroll,” says Theo Ajadi, deputy director of the Deloitte Sports Business Group. “Madrid did it successfully this year. The key is to maintain it and there are certain elements of this increase which may not be recurring, the forward sale of seats for matches this season in particular.
Post-COVID, Madrid’s financial management has been a triumph. Their new iteration of the Santiago Bernabeu realizes the vision that stadiums are assets to be exploited 365 days a year, commercial revenues have increased by 50 percent in two years and the transfer market is a source of funds rather than a drain for them. Even the sale of part of the stadium’s profits to the Sixth Street investment fund was used to spur infrastructure projects rather than in a Barcelona-style acquisition spree.
The salary-to-turnover ratio announced by Madrid also does not take into account the free transfer of Kylian Mbappe from Paris Saint-Germain in July. This will undoubtedly increase the proportion by a few percentage points, but not as much as one might have predicted before putting pen to paper on a deal estimated to be around $36 million per season. In football, spending 3.5% of your income on your most high-profile employee is not a ridiculous extravagance. Madrid has made room for its indulgences.
Even before Alexander-Arnold arrives, the question seems to be who will be next?. William Saliba is approaching the final two years of his contract and there is a long-term vacancy in Madrid’s backline. Cristian Romero is in the same situation. Ibrahima Konate has just over a year left with Liverpool. Summer 2027 could see Bukayo Saka, Florian Wirtz and Phil Foden join Saliba, all available for a registration fee only. Who would doubt that at least one of these players will wear white that summer?
If there is a way out of Madrid’s shadow, Manchester City may have found it. However, this is not as immediately acceptable as one might imagine. Make no mistake, extending Erling Haaland, another who was destined for the 2027 free agency class, is much more of a good thing than a bad thing.
However, if it were really up to the power men at the Etihad Stadium, they would surely have preferred a six or seven and a half year contract that would take their number 9 into their early 30s, but not the giant who would . make him earn about $32 million a year until a few weeks before his 35th birthday. It has long been suggested, notably by his father, that Haaland does not intend to spend the rest of his career in England, but would eventually like to try his luck in La Liga. Presumably he fancied the Bernabeu rather than Balaidos.
The price to pay for stopping Haaland from joining Madrid then appears to be superstar money at a point in his career when Haaland will do so. probably not be a superstar. Better that, though, than the ticking clock that has distracted Liverpool in recent months.
It’s too early to tell if Haaland’s new deal is an exception or if Cole Palmer’s nine-year contract reflects a new approach to player retention. What is clear, however, is that the rest of Europe must adapt. Madrid has the money and influence to get almost any prize it wants. This isn’t going to change anytime soon.