What was most remarkable about this week’s Football Money League was not Real Madrid’s presence at the top of it; the sport’s most prestigious name with a futuristic stadium to sell out was always on course to reel in the big bucks. It was how much room there still is to turn their record revenues into more talent on the pitch.
Madrid have long been a money-making force. It is just that in the prior eras of Galacticos, that revenue was soon lining the pockets of Juventus, Manchester United and Tottenham. Club president Florentino Perez did not just define excellence by on-field success. Real Madrid weren’t just the greatest because they won all the biggest trophies. They won the biggest prizes of the transfer market too, and they did so because they would spend more than anyone else.
Not anymore. On Wednesday the first club to break the billion euro revenue barrier was fielding a team built for a combined $370 million in transfer fees. A whole starting XI brushing aside Salzburg 5-1 for about the cost of a Chelsea midfield three … and a third of that money had gone on Jude Bellingham.
Madrid are generating the biggest revenues world football has ever seen at a time when they have driven down one of the most significant costs any club has to pay: their transfer bill. Since the start of the 2020-21 season — the summer they paid nine figures to manage Eden Hazard’s decline — the champions of Spain and Europe have spent $324 million on new signings, according to Transfermarkt. That is not just less than the Chelseas and Paris Saint-Germains of the world. Crystal Palace, Marseille, Leicester City: all have dropped more on new acquisitions than the team who has just brought in $1.1 billion. Through five windows, Madrid, the club who used to put “another layer of gold paint on the Bentley” as a matter of pride, are running a profit in the transfer market.
The most impressive aspect of this? Through it all, they are warping the football market to their own will. Every club must react to Perez’s vision for a new kind of business or risk losing their best and brightest for a song. Bayern Munich, Chelsea and Paris Saint-Germain have seen their stars walk out on free transfers. It seems likelier than not that Liverpool will be the next. Earlier this month, they rejected overtures from Madrid for Trent Alexander-Arnold, who is free to sign a pre-contract agreement whenever he so chooses.
It would be a hard choice not to make. Like Antonio Rudiger and David Alaba before him, Alexander-Arnold has won all he can. The drumbeat of the Spanish press makes plain Madrid’s desire. The Santiago Bernabeu offers new challenges at the Ballon d’Or factory and a pretty compelling pay packet to go with it. Alphonso Davies, who is expected to reject Madrid’s lure and extend his contract at Bayern Munich, are the exception rather than the rule.
Real Madrid top Football Money League with $1 billion revenue to widen gap over Manchester City
James Benge
The question that has hovered behind Madrid’s new free transfer era is what damage they might be doing to the wage bill. After all, if the money that would have now been going to the club has morphed into signing on fees and agent bonuses, there’s little saving to be had. The reality is that few teams are better placed to deal with UEFA’s squad cost controls than Madrid. Their player salaries account for 48 percent of their turnover, according to Deloitte. Among the top 10 in the Money League, only Tottenham give a lesser proportion of their revenue to the first team. Their strategy away from the pitch is only helping, including hosting extremely profitable Taylor Swift concerts in the past as well as welcoming the NFL’s Miami Dolphins, who will be playing a home game next season at the stadium.
“Growing your revenue is one ideal way to make your wage bill look lower,” says Theo Ajadi, assistant director in the Deloitte Sports Business Group. “Madrid have done that successfully this year. The key is to maintain it and there are some elements of that rise which may not be recurring, the forward selling of matchday seating this season in particular.”
Post COVID, Madrid’s financial management has been a triumph. Their new iteration of the Santiago Bernabeu fulfills the vision for stadia as assets to be sweated 365 days a year, commercial revenue is up 50 percent in two years and the transfer market is a source of funds rather than a drain on them. Even the sale of a proportion of stadium profits to investment fund Sixth Street was used to boost infrastructure projects rather than in a Barcelona-esque acquisition spree.
Madrid’s quoted wage-to-turnover ratio also does not account for Kylian Mbappe’s free transfer from Paris Saint-Germain in July. That will doubtless send the proportion up a few percentage points, albeit not as much as might have been predicted before he put pen to paper on a deal said to be worth around $36 million a season. Diverting three and a half percent of revenue to your most high-profile employee is hardly a ludicrous extravagance in football. Madrid have made space for their indulgences.
Even before Alexander-Arnold arrives, the question seems to be who is next?. William Saliba is approaching the final two years of his contract and there is a long-term vacancy in the Madrid backline. Cristian Romero is in the same position. Ibrahima Konate has a little over a year left with Liverpool. The summer of 2027 could see Bukayo Saka, Florian Wirtz and Phil Foden join Saliba, all available for just a signing-on fee. Who would doubt that at least one of those players will be wearing all white that summer?
If there is a way out of Madrid’s shadow, Manchester City might have found it. It is not as immediately palatable as one might imagine, however. Make no mistake, extending Erling Haaland, another who was bound for the 2027 free agency class, is much more of a good thing than a bad thing.
If it were really up to the power brokers at the Etihad Stadium, however, they would surely have preferred a six or seven-and-a-half-year deal that takes their No. 9 into his early 30s but not the behemoth that will have him earning about $32 million a year until a few weeks shy of his 35th birthday. It has been long suggested, not least by his father, that Haaland did not intend to spend the rest of his career in England, that he would eventually like to try life in La Liga. Presumably, he was hankering for the Bernabeu rather than Balaidos.
The price of barring Haaland’s path to Madrid then looks like being superstar money at a time in his career when Haaland will probably not be a superstar. Better that, however, than the ticking clock that has been driving Liverpool to distraction these last few months.
Whether Haaland’s new deal is an exception or that Cole Palmer’s nine-year contract reflects a new approach to player retention is too soon to say. What is clear, however, is that the rest of Europe must adapt. Madrid have the money and they have the sway to get almost any prize they desire. That is not going to change any time soon.
