Spanish economist Gay de Liébana recently addressed Real Madrid's financial situation, according to Marco Ruiz of AS. The following is an excerpt from the Q&A:
Q: What feeling do you get from the audit of Real Madrid's accounts?
Gay de Liébana: That Madrid is very oversized. Its results, from a practical and athletic point of view, are very poor. I do not know if it is worth it to invest so much to obtain these results.
Q: Where can such a large amount of debt come from?
De Liébana: The team's €541 million ($731M) debt comes from excessive spending. One does not have to underline that a business has a lot of debt. What one has to ask is why. And it is because of the high investment in players. At the end of last season, there was €267 million ($361M) invested in the roster.
Q: If the debt continues growing, could it threaten the team's ability to keep its members?
De Liébana: Totally, totally. A situation would occur where Real Madrid would have to become a Sports Limited Company, and this would completely change Real Madrid's status quo.
Q: When does the debt become dangerous?
De Liébana: The debt is uncomfortable right now. For my liking, to be financially prudent, the debt would have to be at €426 million ($576M), not at €541 million.
Q: Does excessive spending on player transactions explain why Real Madrid's revenue only increased 1% this year?
De Liébana: Of course. From €512 million-€518 million ($692M-$700M) [this year]. In '08-09, Madrid's revenue was €400 million. In '09-10, it was €430 million. The next year, it was €475 million. And in '11-12, €512 million. Now €518 million. The pace has slowed, first because of the worldwide economic situation, but also because Madrid cannot earn more.
Q: Why not?
De Liébana: Because it is earning more than is possible. In what way? A club that does not win the Champions League can not make this much money (AS, 10/9).
