Real Madrid in debt

By Drum Digital
10 October 2013

Spanish La Liga giant Real Madrid is reportedly hiding the scale of its debt that could be as high as €541 million.

Spanish La Liga giant Real Madrid is reportedly hiding the scale of its debt that could be as high as €541 million, according to a Spanish economist. The football club has recently been criticised by a fan group that claims Real president Florentino Perez is putting them in the dark over the club’s true finances, despite Real’s 2012-13 financial report released last month stating that net debt dropped by 27.4 per cent to €90.6 million. Jose Maria Gay de Liebana, a Spanish football financial expert, told Spanish newspaper Diario AS: “Madrid’s debt is, effectively, €541 million. That represents 64 per cent of its total liabilities. It is a very high debtand there is a problem. The short-term debt, which is €338 million, is higher than its current or liquid assets, which are €239 million. So there is €100 million in negative working capital.

“It is true that Madrid has important cash on hand – €156 million at the end of the season. But you cannot abuse negative working capital. If you look at Arsenal or Bayern [Munich], two reference points in financial management, their working capital is positive. Madrid has homework to do.”

Real last month again claimed the title of being the only sports organisation to record yearly revenues in excess of €500 million with a turnover of €520.9 million, 1.3 per cent more than in the previous period. Net profit stood at €36.9 million, a 52.4 per cent increase year-on-year.

Meanwhile, the UK’s Daily Mail reports that Zinedine Zidane has defended Real Madrid’s use of world-record signing Gareth Bale. The £86million man - signed on September 1 - appeared just three times in the white of the Spanish giants before succumbing to injury. Bale was this week forced to withdraw from the Wales squad ahead of their World Cup qualifiers citing a thigh problem, prompting national-team boss Chris Coleman to launch an attack on his Bernabeu employers.  Coleman accused Madrid of throwing Bale in at the deep end last month, pointing to the player’s absence of a thorough pre-season programme.

Madrid assistant boss Zidane, however, insists that the 24-year-old is already on the road to recovery.

‘He’s well integrated at the club and everyone has received him very well,’ Zidane told Sport360 in Abu Dhabi.

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