Real Madrid have revealed that the club’s total debt stands at €602m, up by more than 11% on last year.
AS reports the club accounts have to be voted on this weekend by delegates at the General Assembly and more than half of the amount owed is considered short-term debt.
It’s suggested that this is the reason Madrid have been willing to sell a number of players in the past 12 months, such as Gonzalo Higuain, Mesut Ozil and Angel Di Maria.
AS note transfer fees received go onto the books in one lump sum whereas transfer fees paid are amortized over the course of the contract.
For example, the €45m Arsenal paid for Ozil is included in the accounts but the €101m paid to Tottenham Hotspur for Gareth Bale is to be spread out over his six-year contract, at €16.5m a year, standard practice for football club accounts.
By selling the likes of Ozil and Di Maria at a higher price than they were bought for, the players represent a capital gain, which can improve the health of the accounts.
Di Maria’s move to Manchester United is not however in the accounts for 2013-14, but will instead be in next year’s books.
Madrid owe some €75m to banks and have a negative working capital of €-94m, while clubs such as Bayern Munich and Manchester United carry positive amounts in that category.
The club’s income is put at €550m, lower than the €604m claimed by President Florentino Perez a few weeks ago.
Income at Madrid has risen by 5% despite a €60m injection for winning the Champions League.
The year before saw a 1% rise in income whereas the decade prior had seen a growth of 12%, AS say.
One analyst quoted by AS describes Madrid’s financial situation as ‘terrible’ in light of debt rising to €602m from €541m.
