Debt-ridden Real still top European turnover league
The Germans are unlikely to find it amusing but Real Madrid have again been declared Europe’s biggest club in terms of turnover, with the Spanish champions claiming top spot in the Deloitte Football Money League for the eighth consecutive year and consigning Barcelona to second place for the fourth time in a row.
Real’s turnover for 2011/12 was €512.6m, up seven per cent on the previous year, while their arch rivals trailed by almost €30m, while the best of the rest, Manchester United, finished a very distant third with €395.9m, comfortably ahead of Bayern Munich in fourth place.
The results are likely to rekindle last year’s controversy regarding the state of Spanish football and, in particular, the debt levels being carried by La Liga clubs.
Many have hit the financial rocks in recent years with total debts amounting to around €3.5bn, with more than a third of that owed in back taxes. The situation has led to several clubs seeking legal protection from bankruptcy and, in at least one case, being taken over by a local authority.
Almost a year ago the country’s sports minister, Miguel Cardenal, suggested he would “make this debt disappear in a reasonable timeframe”, a remark that caused consternation in Germany where it was taken as a reference to a possible tax amnesty.
Bayern president Uli Hoeness described the idea as “unthinkable,” and politicians and newspapers became extremely worked up about the idea of the Spanish government waiving tax revenue at a time when it was having to be bailed out by, they argued, the Germans.
After a meeting between the two countries’ finance ministers last spring and the threat of an EU Commission investigation, Cardenal clarified that what he had in mind was a scheme to have clubs pay the money due in instalments between now and 2020 with a third of their broadcast revenues set aside as a guarantee.
Critics of the Spanish game, however, point to the fact most La Liga clubs receive only modest income from television, with the bottom 13 clubs in 2011/12 getting between €13m and €18m, compared with to €140m taken in by Real and Barca. Atletico’s €46m would barely leave them with change out of the €45m they now contribute to the public coffers each year, a third of that going to pay off historical debt.
It is this hugely lopsided TV deal that effectively gives the two Spanish giants their advantage over rivals from other major European leagues and critics both at home and abroad argue the system must change so as to make things more fair.
The two clubs continue to resist the pressure, however, hardly surprising given they owe almost €1.2bn between them, although the scale of their revenues keep them out of trouble.
Difficult financial situation
So while José Maria Gay, an economics professor at Barcelona University, observes that: “Spanish football is in a very tricky, very difficult financial situation,” a spokesman for Real Madrid insisted “we have a top notch credit rating”.
Officials at the two clubs point to the amount of debt being carried by many English clubs, especially Manchester United, but the Old Trafford outfit, it is countered, have assets that far outstrip their liabilities, while the gap elsewhere is far narrower and Barcelona, for all their success and huge income in recent years, are actually in negative equity.
Overall, Deloitte’s latest table shows little movement amongst the game’s elite, with the top six unchanged despite the large increase in Chelsea’s turnover, the result of their Champions League success.
Manchester City jump five place to seventh thanks to their domestic title success and participation in the clubs’ richest club competition, while Juventus, Borussia Dortmund and Napoli make significant progress.
With Valencia, who made the list last year, amongst the Spanish clubs in crisis, no other La Liga side gets a look in, but five of the top 10 are English, while Newcastle become the Premier League’s seventh club in the top 20. Serie A comes second with five, and the Bundesliga has four.