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Volume 6 No. 197
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Spanish Economist Gay De Liébana Addresses Real Madrid's Financial Situation

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).