Chris Weatherspoon is The Athletic’s first dedicated football finance writer. Chris is a chartered accountant who uses his professional acumen as The BookKeeper to explore the money behind the game.
Today, he is exploring the finances of Real Madrid, but he has previously analysed Manchester United, Manchester City, Arsenal, Liverpool, Chelsea, Tottenham, Newcastle, Aston Villa, Wrexham and Barcelona.
Chris has also written a glossary of football finance terms.
Scour any list of the world’s richest football clubs and you’ll find Real Madrid at its business end. In 14 of the past 20 years, Madrid have registered football’s biggest revenues.
Revenue doesn’t equal rich, but Madrid’s bottom line has been healthy for a while, too. Financials for the 2024-25 season, released last month, confirmed another profitable year in the Spanish capital; Madrid have now booked a surplus for 23 consecutive years, a streak that even withstood the Covid-19 pandemic.
To the world’s highest turnover and long-run profitability, add a lack of debt. Madrid and their club president Florentino Perez have prided themselves on the latter, with low net debt regularly cited whenever their latest figures are announced.
Perez’s first term in office began a quarter-century ago, at a time when Madrid’s finances were in a parlous state. Since then, except for a three-year hiatus from 2006 to 2009, he has overseen a transformation into the wealthiest, most consistently profitable club in the sport.
Yet some things stand out, if not as contradictions to the rosy picture painted above, then at least blemishes worth further checking. Madrid remained profitable during the pandemic but were no exception to clubs suffering through the shuttering of stadia at that time.
It wasn’t only the squeezing of finances. In 2019, Madrid embarked on a hugely expensive project to transform their Bernabeu home ground. Big borrowings were required to fund the project, loans that now make them the world’s second-most-indebted football club.
Then, last month, Perez announced an upcoming vote that could see Madrid break with 123 years of tradition.
Since 1902, Madrid have been owned by their members, known as socios. That could be about to change. At an extraordinary general assembly yet to be scheduled, members will vote on a proposal to allow external investors to purchase stakes in the club for the first time. It would be a seismic shift in how Madrid are run.
That it is deemed necessary, like a revenue rights sale they had four seasons ago, jars with the overwhelmingly positive headline figures long put forward by Madrid and Perez. Sources close to the president — speaking anonymously, like all those cited here, as they did not have permission to comment — say he believes the move will help insure the club against trouble when Perez, now 78 years old, eventually hands over the reins.
It does not mean Madrid are in looming danger, but it does mean a closer look at their finances is merited.
When Perez first assumed the presidency in 2000, Madrid were fresh from a victorious Champions League campaign, but off the field, problems were amassing. The club were mired in around €280million (£245m; $328m) of debt and coming off the back of a €69m annual loss. That European Cup final triumph, their second in three seasons, was not enough for Lorenzo Sanz to fight off Perez’s presidential challenge.
Perez stepped into a concerning financial situation and, naturally, decided to go and blow the world game’s existing transfer record out of the water. Twice.
In July 2000, Madrid signed Luis Figo, from arch-rivals Barcelona for €62million (the pig’s head later came for free). A year later, they sent €75m to Juventus in exchange for Zinedine Zidane. More galacticos would follow, and from the outside, Madrid’s strategy under its new leader was clear: speculate to accumulate. The way out of trouble was to spend even more, get eyeballs on the club, and reap the subsequent rewards.
It undoubtedly helped, too, that Perez agreed a reported €448million deal to sell the training ground to the local council. That massive sum helped both clear the debt and finance a splurge on some of the world’s best footballers.
Past land deals with Madrid City Council continue to have an impact today.
In September, the European Commission ruled a 2011 decision to hand Madrid valuable real estate, in place of a previously agreed plot which the council proved unable to legally transfer, did not constitute unlawful State aid. Madrid’s 2025-26 financials will thus be improved by the reversal of a £23.5million provision the club have held on their books in respect of that lawsuit.
Back in the early 2000s, with Figo, Zidane and several more big names on board, revenues did indeed soar, more than tripling over the course of that decade. From sixth in Perez’s first season at the helm, Madrid became the highest earning club in football in 2004-05, a position they retained for 11 seasons, and one they again occupy today.
Growth was driven in those early years by marketing and commercial gains, a revenue stream directly attributable to the plethora of stars Perez signed to wear Madrid’s famous white shirt. Bayern Munich would come to usurp them commercially, but 2023-24 saw the Spanish side return to the top of the pile, per Deloitte’s Football Money League ranking.
The power of that white shirt is reflected in two enormous existing commercial deals. Kit manufacturer Adidas pays Madrid €120million a year for the privilege of making it, with even more accruing to the club on top from merchandising. In 2023-24, the latter generated €76m, and Madrid’s €196m total from the Adidas deal was €25m more than any other team in Europe earned from kit and merchandising agreements.
Separately, the front-of-shirt sponsorship deal with airline Emirates garners €70m annually. Across the Adidas and Emirates deals alone in 2023-24, Madrid earned more commercial income than all but six clubs.
Madrid’s commercial profile is huge, but it’s far from their only growth area. The expensive remodelling of the Bernabeu was done to make it a world-class venue for events beyond football, with the expectation that significant revenues would flow as a result.
And flow they have. Madrid booked €326.1million in total revenues from their stadium last season, almost double what the Bernabeu was generating before its transformation. Comparing matchday income to other clubs is made tricky by how Madrid categorise revenue streams in the accounts, but they led world football in 2023-24, and that won’t have changed last year.
Revenues were bolstered in that 2023-24 season by Madrid starting to sell personal seat licences (PSLs) to VIP customers. These licences secure holders with the right to buy season tickets for the next 30 years, alongside certain “exclusive services” within the Bernabeu. The exact amount PSLs added to Madrid’s top line is unclear; the club said a €76.1million increase in ‘other revenue’ was mostly attributable to PSL sales.
Those sales dropped in 2024-25 (more are expected in 2025-26), and PSLs as a concept are something Barcelona have also employed recently to drive up their own revenues. As the PSL sales represent a once-in-30-years occurrence — licence holders are able to sell them on to other parties, so Madrid have lost control over the asset for the licence’s term — there’s a reasonable argument PSLs are akin to a one-off financial ‘lever’, such as others pulled at Barca in recent seasons.
Broadcast revenues have grown, too, though less so than other income streams. TV money would have fallen last season were it not for €42.4million banked from FIFA’s expanded Club World Cup in the United States in June and July, where Madrid reached the semi-finals (a further €29m or so will be booked in the 2025-26 financials).
La Liga clubs don’t enjoy nearly so large a domestic TV deal as their English Premier League counterparts do, and Perez has long bemoaned the shift to collective revenue distribution, which began in 2016-17, ending the ability for individual teams to negotiate their own TV deals. Madrid recently won a Supreme Court case against La Liga over 2015-16 distributions, earning them €8.8million in deprived past earnings. La Liga is reviewing the judgment with its legal team.
Madrid and Barcelona still routinely receive around 23 per cent of La Liga’s annual distributions, but on the most recent figures, the league broadcast earnings of Spain’s highest paid club were lower than 15 Premier League clubs received in domestic TV money.
Recent broadcast revenues at the Bernabeu have remained high, in large part due to Madrid’s continued European success. In the decade from 2014 to 2024, they won the Champions League five times, generating €988.3million in UEFA prize money. That was €78m more than any other club — and over €200m more than all but Manchester City, Bayern and Paris Saint-Germain.
Madrid’s huge — and growing — revenue could still have been higher. Or at least that’s what the club seem to think.
At the end of October, Madrid confirmed they are seeking “substantial damages” from UEFA over the latter’s blocking of the European Super League (ESL), with reports putting the club’s claim for lost earnings at an eye-popping €4.5billion.
The realism of that figure is debatable, not least as many high-profile broadcasters distanced themselves from a project almost wholly reliant on a massive TV deal. But the decision of Madrid and others to push forward with the controversial plan reflected a need for money.
Madrid have put the figure for revenues lost because of the pandemic at around €390million. It was no coincidence that the ESL was born in the wake of the world stopping back in 2020. And, despite what the unblemished years of profitability suggest, Madrid were far from immune to Covid-19’s impact.
Madrid avoided breaking their profit streak when Covid-19 uprooted the 2019-20 season, and even did so again a year later when stadiums shuttered for much of the campaign as part of regulations to limit the spread of the virus. In a year when Barcelona recorded a world record pre-tax loss for a football club (€555million), and eight other European teams posted deficits above €100m, Madrid booked a profit, albeit only €1.7m.
That was achieved through significant cost reductions across the club, including first-team footballers and basketball players, as well as main executives, taking a 10 per cent pay cut. Unlike at several other teams, where wages were deferred to a later date, Madrid players gave up a slice of two seasons’ worth of earnings to help the club through the pandemic. Madrid also embarked on a year’s hiatus from signing new players, and recouped over €100million in sales, principally from the departures of full-backs Achraf Hakimi and Sergio Reguilon.
But €390million in lost revenue is a massive sum, and the twin pincers of the pandemic’s ongoing impact and the rising cost of remodelling the Bernabeu put the club under strain.
Madrid refute the idea they have ever turned to the ‘palancas’, or levers, policy embraced by Barcelona in recent years, but a deal they struck in 2021-22 bore the hallmarks of a short-term fix.
The club agreed to relinquish a proportion of future revenues flowing from the refurbished Bernabeu in exchange for an immediate cash injection. The deal was struck with Sixth Street, the American investment firm that also acquired a quarter of Barcelona’s future La Liga TV money for €667.5million at a similar time.
Madrid needed money, but to a lesser extent than their rivals; their own deal with Sixth Street, and Legends, a company that specialises in and would aid with stadium management, was announced at €360million. In exchange, Delantero Inversiones y Operaciones (DIO), a subsidiary ultimately owned by Sixth Street, would receive around 30 per cent of non-ticketing stadium revenues over the next 20 years.
Curiously, that €360million figure has dropped since. Madrid only booked €316.3m in profit from the rights sale in 2021-22, and since then, the club’s accounts have revised the “maximum total contribution” from the deal down to €327m. A source with knowledge of the transaction told The Athletic the reduction was due to short-term “earnouts” not materialising.
In any case, the massive cash injection helped the club out of a sizeable hole. Without the monies from that one-off deal, Madrid would have lost €296.2million pre-tax. That loss figure would potentially have been lower if they hadn’t done the Sixth Street deal; as we’ll explain, Madrid’s finances contain a number of moving parts.
But even after adjusting for massive provision movements (€118.9million, net), which added to the season’s costs, as well as €60.9m in impairments booked against player values, Madrid would still have lost €116.4m without the Sixth Street deal, shattering the perceived invulnerability of their finances.
One lingering uncertainty about the Sixth Street transaction is how the club reflects it in their annual revenues.
Both La Liga and UEFA’s squad cost rules are directly linked to revenue: the more a club earn, the more they can spend. If Madrid continue to record their stadium revenues on a gross basis, even as 30 per cent of certain income streams are promised elsewhere, they will benefit from a higher squad cost limit than if they deducted the annual percentage owed to DIO. As shown in The Athletic’s recent deep dive into Barcelona’s finances, the Catalan club present their broadcast revenues after reducing it based on the amounts they must hand over to Sixth Street each season.
Madrid’s accounts are not specific on the matter but one source with knowledge of the situation, speaking anonymously to protect relationships, confirmed to The Athletic the applicable revenue lines are recorded gross in the club’s books, even as a proportion is then due to DIO.
The reasoning put forward, which appears to have been accepted by not only Madrid’s auditors but football’s regulatory bodies, is that a “transfer of risk” is present in the deal. DIO’s slice of Madrid income appears to be dependent on the club maintaining a minimum EBITDA (earnings before interest, tax, depreciation and amortisation) figure. If that level isn’t met, DIO is due no payment; hence, unlike in the Barcelona deal, there is no guarantee the club has to make a payment in a given season.
The Athletic obtained DIO’s most recent financial statements for 2023-24 and found the Sixth Street subsidiary booked €12.7million in turnover through its agreement with Madrid. The exact revenue lines the agreement applies to aren’t clear, but Madrid booked €46.1m across the following stadium income streams: tours and the Real Madrid Experience; events and concerts; food, beverages and catering; and other stadium revenues.
DIO’s €12.7million income amounts to 27.5 per cent of that €46.1m in non-ticketing revenue. Not exactly the reported 30 per cent, but not so far away for it to be an unreasonable estimate of the applicable revenue streams in the agreement. Though DIO’s 2022-23 turnover of €2m amounted to just 11 per cent of the same Madrid revenue lines that season, that’s potentially attributable to the fact the stadium works were still being completed, alongside the EBITDA caveat mentioned above. DIO’s 2024-25 accounts have yet to be filed, so there’s little to work off there.
When asked about whether Madrid were able to state stadium revenues gross for their UEFA squad cost rule calculation, a spokesperson for European football’s governing body advised they do not comment on specific teams. La Liga stated it was a question for the club to answer. Madrid did not provide a response, but given the understanding The Athletic has gleaned from conversations with knowledgeable sources, as outlined above, it appears they are able to record the stadium revenues on a gross basis — thus lifting their respective squad cost limits.
How much Madrid will forgo in revenues between now and the Sixth Street deal ending in 2042 is unknown, but it seems a safe bet it will exceed the maximum €327million they can receive. DIO’s accounts confirm recoverability testing is carried out in respect of the amount paid to obtain the company’s share of Madrid’s revenue streams, and no impairment was deemed necessary in 2023-24.
In other words, Sixth Street, via DIO, expects to recover at least the amount it paid Madrid a few years ago, and probably a decent sum beyond that. A rough estimate of the amount due to DIO in 2024-25, assuming no future growth in stadium revenues — of which there will surely be plenty — arrives at over €400million returned to Sixth Street by the time the agreement ends. The true figure will almost certainly be higher.
The Sixth Street deal ensured Madrid booked €20.2million profit that year, even as day-to-day operating losses plunged to €355.4m. That was the sixth consecutive year Madrid lost money at the operating level (i.e., before player sales, exceptional items and any interest income or costs), and it took until 2024-25 for the operating result to properly recover.
Last season’s €43.1million operating profit was the best day-to-day result of Perez’s two presidential reigns combined, and marks a significant recovery from underlying deficits. From 2016 to 2023, Madrid lost over €700m on an operating basis, though player profits generally put them back in the black. The one year they didn’t, the Sixth Street deal was agreed.
That year looks significantly worse than the rest as a result of provision additions and player value impairments, which together worsened the result by €179.7million. Both of those expenses stem from accounting judgements which, though lawful and signed off by the club’s auditors, might not have been deemed necessary were there no huge one-off income items to offset against.
The 2021-22 accounts highlighted the paradox of profitability in Madrid: the club needs to be run well, and surpluses are the best way to highlight that, but there’s no sense in building up enormous profits either. Madrid are a not-for-profit entity, owned by their members, and do not pay dividends. The club, in effect, should spend what they earn.
The mantra may change if external investors are allowed on the scene, but, for now, it makes sense for Madrid to aim for profits at the lower end of the scale.
The club manage it in a few different ways. The 2021-22 season was a one-off in terms of the size of the accounting movements built into its results, and employing provisions for anticipated future costs is standard accounting practice, but Madrid’s usage has ramped up recently. The net €118.9million provision expense in 2021-22 meant, by the end of that season, the club were carrying €137m in provisions on the balance sheet.
That figure has more than halved to €63.9million, but not all of the difference was used for actual costs. Since June 2020, Madrid have frequently reversed provisions they deem are no longer required. Reversals comprise income, so boost the bottom line. Madrid have benefited from provision reversals of €47.4m in the past five seasons.
In Madrid’s accounts, it helps the top line, too. The club includes provision surpluses within revenue, so have enjoyed a near-€50million turnover boost in the past half-decade. Again, there’s nothing untoward about using provisions, and Madrid are acting within accounting rules. The club’s auditors, EY, have not highlighted the matter as worthy of particular focus.
But it has aided Perez and Madrid’s ability to proclaim an unending run of profits. Strip out provision reversals recorded in both 2020-21 and 2022-23, and they would have made pre-tax losses, albeit only small ones.
Accounting adjustments can only do so much, not least because they can’t just be dreamt up out of thin air.
Even if we were to overlook provision movements, Madrid’s profit margin (pre-tax result as a proportion of revenue) in 2024-25 was just 2.3 per cent. Before 2019, the provision-adjusted margin frequently topped 10 per cent, while even the reported pre-tax margin was regularly over five per cent. The decline in relative profitability is not solely down to Madrid’s utilisation of provisions.
If revenue is shooting up but profits remain relatively low, it begs the question of where Madrid’s money is going.
The natural inclination is to assume it all goes on the players, but, as we’ll see, Madrid’s spending on football costs is declining relative to turnover. So the answer must lie somewhere else.
On the one hand, completion of the Bernabeu works means Madrid have to depreciate them. Such expenses tripled to €52.2million in 2024-25. Yet it is small fry compared to operating costs. Those have ballooned and hit €462.8m last season. The refurbished stadium coming almost fully online has added to the cost base, and running a club of Madrid’s size is a larger undertaking than most anyway, but there is a curiosity hidden within the figures.
Since 2017-18, a cost category named ‘other operating expenses’ has comprised over a fifth of annual operating costs. Since 2019-20, it has been the single largest individual cost category — €755million in costs have been booked there in the past decade.
Madrid’s accounts are very light on detail regarding what sits within that expenditure pot. The raw amounts bucketed there have zoomed up since the mid-2010s, from €20million to €102m last season. That was a fall on 2023-24, and an even greater reduction from 2021-22’s €136m peak, but it’s still a huge amount of spending about which little is disclosed. Madrid do note that La Liga’s solidarity contribution, which all clubs must pay, sits in there, but in their case that has only totalled €14m in the past few seasons.
Some provision expenses likely sit in there as well, but there is another factor in play; one which has served to increase the club’s revenue figure over the years, too.
In 2017-18, Madrid entered into an unincorporated joint venture agreement with Providence Equity Partners, an American investment group. For €200million, Providence would receive an unspecified share of the club’s future sponsorship revenues. The deal was later renewed, but ceased in 2024-25.
How much Madrid booked as income from the pact with Providence is unknown, but their revenue from sponsorships and licences rose €36.9million (18 per cent) in the season the agreement began. Owing to the way the deal was structured, with Madrid as a ‘managing participant’, accounting rules allowed the club to record income from the joint venture as revenue, even as Providence was due its share. That payment by Madrid was recorded within operating costs, potentially among those large ‘other operating expenses’.
Using movements in marketing creditors disclosed in Madrid’s half-year and full-year accounts, we can determine a minimum amount paid to Providence as part of the agreement. Between 2018-19 and 2024-25, Madrid made payments of at least €146.2million to their joint venture partner; it is possible, but unknown, if the total figure was higher still.
One source with knowledge of the Providence arrangement, speaking anonymously, told The Athletic the investment firm made its money back, and was then due 10 per cent of the relevant sponsorship revenues above a certain, unspecified income level.
When questioned as to why the arrangement could be recorded as revenue and costs rather than as a loan, a similar reason to the Sixth Street deal was cited: Providence exposed itself to risk, with the potential it might not be repaid the sums that went to Madrid. They ultimately were repaid those sums, and seemingly more beyond that, but the transfer of risk meant the agreement could not constitute a loan.
As to why Madrid would enter into such a deal, The Athletic has been told they frequently receive pitches from external parties to enter into agreements with the aim of growing club revenues. If those external parties are willing to put forward money and risk, and are deemed compatible with Madrid’s brand and values — as Providence did and were — then they will enter into said agreements.
In the case of the Providence one, it seems Madrid believed the amounts paid back to the investment firm were worth it in exchange for improving the club’s commercial income. A separate source to the above told The Athletic that Providence was far from just a moneylender to Madrid, saying the firm brought “new long-term global partners to the club” and built “a best-in-class commercial team at the club”.
Whether it was the overriding aim or not, the Providence deal not only allowed Madrid to boast of higher revenue than if they’d taken out a loan to aid liquidity, but it also has an impact on the squad cost rules operated by both La Liga and UEFA, as each of those are tied to club revenues.
The massive operating costs of the club plainly aren’t solely attributable to deals such as the Providence one, but if the Sixth Street one sees related revenues recorded gross (and so payments are recorded in operating costs, too), then it goes some way to explaining why Madrid’s operating expenditure far outstrips anyone else’s.
Per a UEFA report, Madrid’s 2023-24 operating costs were €167million higher than those of second-placed Tottenham Hotspur — an enormous (62 per cent) difference. And those costs only increased last season.
How much was attributable overall each season to the now-ended Providence deal is unknown. Madrid’s infrastructure means big operating expenses are a fact of life. But the Providence agreement allowed the club to record higher revenues than it might otherwise have, despite the fact an unknown quantity of the monies had to be repaid. As outlined above, the transfer of risk was key to this.
The Athletic has been unable to determine specifics surrounding the agreement, other than those interpreted from the accounts and outlined above. When asked about whether income from the Providence deal was included for squad cost limit calculations, La Liga referred questions to the club, and a UEFA spokesperson declined to comment on individual teams. It would seem though, as with the Sixth Street transaction, that Madrid did not have to revise down revenues for regulatory submissions.
One source with knowledge of the transaction told The Athletic that Providence made a “good return” on the amounts paid to Madrid. Another, who referred to the deal as an “upside-sharing mechanism” said Providence received its money back and then some on top but that, in their view, the deal was “not a super” one.
When provided with various questions on the unincorporated joint venture by The Athletic, Providence declined to comment.
Considering last season saw star striker Kylian Mbappe arrive in the Spanish capital, Madrid’s wage growth was small: only €9.3million (two per cent) higher than 2023-24. Wages paid to football staff increased even less, up just €1m to €388.8m.
A lack of on-field success saw group first-team bonuses drop from €35million to €13m, a reduction offset by an increase in basic salaries, even as Toni Kroos retired. Mbappe’s own hefty annual salary, and a reported €150m signing bonus spread over his five-year contract, helped raise Madrid’s wage bill even as they won nothing of note.
Madrid’s football wages are huge on their own, even as Barcelona’s trumped their total last season, though only by €3million. Add in Madrid’s spending on the club’s basketball team and non-sports staff, and the total wage bill hit €514m, a little higher than Barcelona’s (€510m) and easily one of the highest for any club in Europe.
PSG’s inaugural Champions League win in May this year generated a €543million wage bill there, and chances are Madrid will have remained the third-highest overall payers in European football last season, just as they were in 2023-24. City, who sat between PSG and Madrid that year, have yet to release 2024-25 figures.
The salary disparities in Spain, and across football, are such that Madrid’s wage bill was more than the most recent wage bills of 11 La Liga clubs combined. Yet the club’s revenue dwarfs domestic peers by even more. As a result, Madrid’s salary costs as a proportion of revenue are actually falling — and quite far, too.
Last season, Madrid’s wages to revenue ratio, even using The Athletic’s lower calculation of the latter, sat at 44.3 per cent. That was not only a La Liga low, but also a 15-year club low. Football wages as a proportion of turnover were just 33.5 per cent, and football costs as a whole — being those wages plus the amortisation of transfer and agent fees — fell to just 43.4 per cent, another long-time low.
Huge turnover rather than cost reductions has driven that percentage down, and a concern of Madrid’s rivals is that they can spend more than anyone else on footballers. The worry that the likes of Madrid and PSG would steal an advantage against English clubs was a key argument put forward by opponents of a recently proposed ‘anchoring’ rule in the Premier League, imposing a hard cap on squad costs. The proposal was defeated last month.
There’s validity to that concern, but in reality, Madrid don’t spend nearly what they could under the existing rules. The club’s football-related wages and amortisation totalled €504million in 2024-25, a massive sum but still well below both the spending limit set for them by La Liga that year (€755m) and The Athletic’s estimate of where their 70 per cent UEFA squad cost limit would have landed (€842m).
Those costs seem likely to rise as a result of last summer’s transfer business, but they still shouldn’t come anywhere close to the levels permitted for Madrid. That may be down to chosen parsimony on behalf of the club, but, as we’ve seen, they also carry much larger operating expenditure than anyone else, which, in turn, limits their ability to push football-related spending to its regulatory limits.
Of course, turnover is so large that they still manage to be one of the most generous payers in world football.
Included in those football-related costs is a transfer amortisation bill, which hit €115.6million last season. That’s a Spanish high currently, and Madrid’s squad at the end of June, including the pre-Club World Cup signings of Dean Huijsen and Trent Alexander-Arnold, had cost €1.072bn to assemble. No other non-English club, with the probable exception of PSG (yet to disclose full 2024-25 figures), has spent over €1bn on their playing squad.
Even so, that amortisation bill is a fair way down from just a few years ago, when it peaked at €163.7million in 2022. That reflects €60.9m worth of player value impairments booked then, as well as the departure of several signings made for big sums, such as Eden Hazard and Luka Jovic.
Madrid’s transfer spending has reduced since the pandemic. Between July 2018 and June 2020, they spent €571.3million on transfers and agent fees, and €352.6m net. In the five seasons since, their net spend was €339.9m.
That’s still a lot — it’s €133million more than Barcelona’s net spend in that time, for example. Madrid spent over €200m on new signings in each of the two seasons before last, and a further €167.7m in 2024-25. It sets them apart in Spain, yet compared to clubs elsewhere, it’s unexceptional. All of the Premier League’s ‘Big Six’ have spent more on players in the past decade than Madrid’s €785.6m, as have PSG. Newcastle United, following their 2021 takeover, aren’t far behind.
The spending power of clubs abroad is one reason cited by Perez behind the proposal to allow external investors to buy into Madrid. The club president has spoken of the difficulties in competing with billionaire-backed teams from other countries, and while Madrid are hardly scraping the barrel when making their signings, there is an element of truth to it. Despite boasting the world’s largest revenues, they have been consistently outspent in the transfer market by a handful of other sides. That said, they do carry a higher wage bill than all English clubs other than City.
One thing that would boost spending power would be to get better at selling. Madrid have made €859.7million on player sales in the past decade, €597.9m of it translating to profit. That sounds good, but nine clubs across Europe have generated more. Across the past three seasons, Madrid’s player profits total just €123.6m, barely squeezing them into Europe’s top 30.
In fairness, other clubs have embraced a player-trading model far more willingly than Madrid. Their focus is on the top line, and recurring revenues there dwarf everyone else’s. But if they were looking for ways to improve the bottom line further, or to enhance their own transfer spending ability, becoming better sellers is an option.
On May 31, 2017, three days before Madrid trounced Juventus 4-1 in Cardiff to win their 12th European Cup, the city council back home approved plans that would shape the club’s future far beyond that victory in the Welsh capital.
Almost seven years after Perez had announced a “review of the Bernabeu”, Madrid received the green light to proceed with a project which, they hoped, would transform their home stadium into a world-class venue for events beyond football and so reap huge revenues.
The works, which started in June 2019 and were mostly completed in 2024, included raising the height of the stadium by up to 12 meters (just under 40ft), increasing capacity to over 83,000 people (from around 81,000), wrapping the former concrete facade in roughly 7,500 stainless steel slats, sticking a retractable roof on top of it, and installing a retractable pitch.
That doesn’t cover everything, and if it sounds like it would be expensive to do all that stuff, it very much was. The original plan projected costs in the region of €400million, before being revised to €525m; the eventual expense went far beyond both. With just about all of the project complete by the end of June this year, Madrid’s investment in the stadium revamp stood at €1.347bn.
To fund the build, they utilised something they prefer not to draw much attention to: debt. In all, €1.17billion was borrowed for the stadium project, or around 87 per cent of the cost of the works.
When announcing financial results, the club routinely choose to highlight a debt figure exclusive of the loans taken out to fund the Bernabeu’s remodelling. In part, that’s to separate the day-to-day from a specific, expensive project, one which they intend to pay for through the revenues generated from the project itself.
Yet ignoring the stadium debt is a bit like tidying your room by cramming everything under the bed. Look a little closer at Madrid’s books and the stadium loans are there for all to see. Were the club to draw attention to it themselves, they would highlight a debt stack of €1.3billion, the second-largest in world football, only trailing the €1.45bn racked up at Barcelona to fund their own ongoing remodel at the Camp Nou.
Madrid’s stadium debt comprises three main tranches. The first totals €575million and incurs interest at 2.5 per cent annually. The second is for €225m, at an even more favourable rate of just 1.53 per cent. The third and final tranche, agreed in late 2023, loaned them a further €370m. Unlike the other two slices of debt, the club do not disclose the interest rate for this portion in their accounts.
That last deal was secured when worldwide interest rates were on the rise, and while Madrid don’t detail the rate agreed upon, there’s enough they do share for us to figure it out for ourselves. Using the loan’s term and the annual repayments due on it, we get to a rate of around 5.27 per cent — more than double either of the previous two tranches.
All three included grace periods whereby no repayments would be made initially, ostensibly to allow for the works to be completed and Madrid to start reaping the benefits, which they’d then use to fund the repayments. Some €40million of repayments were made in 2024-25, but the first instalment on the final tranche won’t happen until November 2027.
Thereon, annual repayments will exceed €66million until 2049. The first two tranches will be fully repaid by then; thereafter, four November payments of €26m each will be made until the stadium loans are fully paid down in mid-November 2053.
All of this relies on Madrid not refinancing between now and then, which isn’t a given. At an average fixed interest rate of 3.2 per cent, the project borrowings have been secured at a favourable level in the current economic climate. That €370million tranche is noticeably more expensive than the other €800m in the debt stack, but overall, Madrid have managed to secure €1.17bn in borrowings at a fairly low rate.
Moreover, Madrid didn’t have to mortgage the stadium itself, only certain revenues flowing from it. Other than an undisclosed coverage ratio between those revenues and interest paid on debt, there are no restrictions on how club finances are to be managed or the ability to raise other funds. The plan is for the new-look Bernabeu to pay for itself.
Early signs are good. Non-ticketing revenue at the stadium has surged since its reopening, with the €79.2million made in 2024-25 more than €50m above the pre-refurbishment high of the same revenue streams.
Even without tickets, Madrid’s stadium earnings exceed the matchday income of every other La Liga club not named Barcelona. They also trump total gate receipts at all clubs in England bar the ‘Big Six’.
Of course, there is the matter of the percentage given away to DIO, at least until 2042.
As detailed above, exactly how that figure is calculated is unclear.
DIO’s 2023-24 revenue corresponds to a slightly smaller (27.5 per cent) proportion of that season’s stadium revenues than the reported 30 per cent, and applying that to last year’s takings would mean Madrid had to hand over €21.8million. It still would have left over €57m in club hands, more than double the pre-refurbishment figure but less than the annual repayments soon required on the debt. Stadium earnings are meant to be funding those, but of course, the revenues mentioned here are far from the only income the Bernabeu is generating.
In 2024-25, Madrid’s stadium revenues totalled €326million, an enormous figure and one which the club still believes is well short of the Bernabeu’s potential. Events and concerts generated €15.4m, but the latter have been on hold since September 2024 due to a dispute with nearby residents surrounding excessive noise levels.
Last season’s €326million stadium turnover was €35m (10 per cent) lower than budgeted, a variance Madrid also attributed to selling fewer PSLs than expected. For 2025-26, the club expect PSL sales to return to 2023-24 levels, and have budgeted total stadium revenues beyond €400m.
Borrowing isn’t limited to the stadium project. In April 2020, as the pandemic shut down the world, Madrid’s other debt quadrupled, with them taking out a total of €155million in loans from four different banks.
A further €100million in non-stadium debt was obtained in 2024-25, and, though some was repaid in-year, Madrid’s bank borrowings away from the stadium project are now near €140m. Of that, €62.7m is due for repayment in the current 2025-26 season, with a further €25m due in each of the following three campaigns.
Madrid have long possessed credit lines they can dip into to meet cash flow needs across a season, though the size of those facilities has grown significantly. Where a decade earlier the club had €50.9million in borrowing capacity on undrawn credit lines, by the end of June 2025, that figure was €425m. That also represented a €30m increase on a year earlier.
None of that €425million contributed to Madrid’s end-of-season debt figure, as the amount was undrawn, but the club are hardly holding access to such borrowing for the sake of it. The size of the credit lines available to them reflects the quantum of cash flowing into and out of the business, and the need to ensure cash management is effective.
On the face of it, Madrid have little to worry about when it comes to cash flow. Operating liquidity has rocketed upward, with €237million in cash generated day-to-day in 2024-25. Yet for all the club generate reams of cash, as you expect over €1bn in revenues should, the size of their outgoings means Madrid are subject to periods in the year when purses are squeezed. Indeed, the club themselves accept working capital — current assets less current liabilities — is “structurally negative”.
Madrid do highlight the position relative to revenue being far better than it once was, but the accounts also hint at a particular crunch point.
The bulk of the club’s salary payments naturally go on football staff, and those well-renumerated employees are actually only paid twice per year: once in July, once in December. That means, per the accounts at the end of June, the club carry a large ‘sports personnel’ liability, being amounts due to sports staff for the previous six months’ work.
Despite Madrid’s wages to revenue being so healthy, the size of the biannual salary payments is such that it now regularly outstrips the club’s end-of-June cash balance, once we exclude cash tied to the stadium project. In seven of the past nine Junes, imminent wage payments outstripped Madrid’s available cash. At the end of June 2025, the gap was €42million.
That is despite the cash balance including sizeable funds from membership fees and season-ticket sales for the then upcoming campaign; at the end of that month, €77.1m in such monies had been collected.
Plainly, Madrid have cash-flow commitments to manage each July. It would be unsurprising if those €425million in undrawn credit lines were dipped into this season. It is worth highlighting, too, that, unlike in most previous years, the balance owing to Providence had not been paid off by the end of June. In 2025, that figure sat at €52.7m, comprising another upcoming payment which would need to be made.
Of note here is that in the four seasons from 2014-15 to 2017-18, Madrid drew down borrowings and then repaid them in-year, essentially to meet short-term cash flow needs. That practice stopped afterward, at least until last season, when there was a partial repayment of the extra €100million in non-stadium borrowings.
The previous cessation of drawing down and repaying loans in the same year may be linked to the existence of the Providence agreement during those years. That deal, naturally, provided liquidity to the club.
When asked whether the Providence agreement has previously helped them meet cash commitments relating to wage payments, a source with knowledge of Madrid’s commercial operations, speaking anonymously, provided an alternative route. Per this source, payments from two of the club’s biggest sponsors, Adidas and Emirates, match off with when wages are paid. Thus, while Madrid appear to have a cash problem to be solved at the end of June, their lucrative commercial deals ensure sufficient liquidity arrives in July.
Madrid’s outgoings ensure that, even with over €1billion in revenues, cash isn’t always bountiful. That plays into the theme of a not-for-profit spending everything it earns, but there is also a clear desire on the club’s part not to show any sign of strain.
That is reflected in the separation of the stadium project’s debt from the amount they announce each summer, as well as the desire to keep pushing their revenue number ever higher.
Perez knows well the need to keep up appearances. It is a curious fact that Madrid have never retained a La Liga title during his 22 years as president. More curious still is that they have won as many Champions Leagues as domestic league titles (seven) with him in office. It is impossible to sniff at that; Madrid are European football’s most successful ever club.
Yet the pressure of being Real Madrid is intense. That is abundantly clear on the field — see the ongoing speculation already, just six months after his appointment, about how long head coach Xabi Alonso has left in the dugout for that — and, once you look close enough, off it, too.
Not that Madrid are in any real financial trouble.
Even if we discounted the nuanced revenues detailed here, they would probably remain the highest-earning club in football. Profits might have been lower without some canny financial manoeuvring, but in most years, Madrid would still have been in the black, in a football world where many of the biggest clubs lose money. The club were able to navigate a pandemic while turning their home into a state-of-the-art events venue, one which will keep the cash rolling in every day of the week, not just when their matches are on.
Though the borrowing to fund it was hefty and repayments are soon to increase, the cash flows generated by the Bernabeu should ensure those continue to be met. Crucially, the loans were secured at favourable rates; Madrid’s average interest rate of 3.2 per cent on the stadium loans sits two points lower than the rate Barcelona were recently able to achieve on a refinanced tranche of their own infrastructure lending.
The overall picture isn’t quite as marvellous as Madrid and Perez would make out. Revenues are massive but translate to comparatively miserly profits, even after accounting manoeuvres. That is less of a problem while the club remain a not-for-profit entity. It could become one if that vote to allow external investors through the door passes.
Specifics remain scarce, but Perez has signposted the likelihood of any stake sale being small: “five per cent or so” was the number given during his statement at the club’s AGM in November. But even at that level, the eventual new shareholders would expect some form of return. A record operating result last season showed a path toward greater profits even as debt repayments draw more than €60million out of the coffers annually.
Like Barcelona, members-owned Madrid had to fund a hugely expensive project through external lending. Perez has mentioned the difficulty of competing against heavily backed foreign clubs in the transfer market, but the logic also applies to long-term infrastructure. City and PSG have each undertaken stadium or training ground works costing hundreds of millions of euros recently, with all of it paid for by their benevolent owners.
The ship has sailed for Madrid on that one, but the upcoming vote on diluting the member-owned model cannot be understated.
If passed, it will reshape Real Madrid entirely, and put even greater resources in the hands of football’s highest-earning club.