The money making Madrid

On the pitch things may be a little up in the air with Jose Mourinho’s future constantly being debated, but in the boardroom things have never been clearer for Real Madrid: Make money and make lots of it. This week Forbes magazine announced that Los Blancos had taken top spot from Manchester United as the world’s richest club. It is no surprise that the game’s most successful team on the pitch would also be its wealthiest but at the Santiago Bernabeu they are not resting on their laurels as they go in search of more revenue.

Some may point to the TV broadcasting deal that sees Real Madrid net close to €180m but that is just a third of the club’s revenue. Sponsorship deals with Emirates Airlines, Bwin, a shirt deal with Adidas plus revenue from merchandising and friendlies and Los Vikingos are valued at a cool, not to be sniffed at, €3.5bn. The icing on the cake is that rivals Barcelona are approximated at almost €500m less.

One would think that Real Madrid would be patting themselves on the back but no. In the last Socio assembly, four ideas where presented to members of the club about developing and remodelling the Santiago Bernabeu and on April 30 they must decide which of the four ideas they will press forward with. Right now things are going well for the club but with the recession and talks about a possible new TV broadcasting deal about to be discussed, the club want to stay ahead of rivals both on and off the pitch.

Nobody is too hopeful on the TV deal but the recession has hit everyone hard, including Real Madrid. While figures for this season have yet to be released, a look at the Santiago Bernabeu on match days would suggest from the visible empty seats that ticket sales are down. There is also the fact that there is only a certain amount that the club can make from selling tickets. With that in mind they are thinking outside the box. Currently the club get 32 per cent of their money from marketing. That is something they are very keen to expand upon.

In a recent survey when asked why they were staying at home to watch football games instead of going to the ground, fans said that one of the main reasons was comfort. For that, Real Madrid want to develop around the Bernabeu. They have floated the idea of having a hotel, shopping centre and other amenities to attract people not only to come to games but also to spend the day in and around the ground and to spend their hard earned money too.

A while ago Florentino Perez suggested it might be in the club’s best interest to move out of the city of Madrid and to the suburbs. Whether that option is still on the table remains to be seen. Real Madrid fans are not entirely convinced about leaving a ground that has seen them win so much and given them so many happy memories. Atletico Madrid fans’ reaction to a similar move may be reason enough to shelve that idea. Right now the future of the Bernabeu is unknown. Nothing has been decided or revealed but to get everything up and running it would take at least 10 years.

Marca suggested in an article today that the club was looking abroad at other sports to see how they can develop and promote the club more. One concept they are said to be looking at is Madison Square Garden in New York. Real Madrid are said to be very interested in the fact that sports teams make more money in merchandising than on ticket sales on match days. At the moment, ticket sales and sales at the ground account for 29 per cent of their total revenue. According to Marca, this is something that the club plan to study and if possible try to copy.

This year Perez will run for President again. Each time he has done so it has been with promises of change and glory. Each time he has delivered, on some degree. He already has plans to make a resort in Asia and from the sound of it that is just the start. Real Madrid, in football terms, became a global force decades ago. Now it seems as a marketing force they are very close to matching that.