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Alan Pardew's winning smile

Toe Poke 32 minutes ago
Read
Feb 16, 2006

The evil genius of Real Madrid

How are the mighty fallen. Having sat proudly atop the Money League for nine years Manchester United have finally been usurped by Real Madrid. Who else?

Accountancy group Deloitte's annual look at the money-making power of the world's football clubs has revealed a perverse truth: Real are now the standard bearers for all things financial in football thanks to a strategy which has actually stymied on-field success.

While signing Galacticos wins elections for presidential candidates, sells shirts and tickets in their millions and encourages broadcasters to put their money where their mouths are, it doesn't guarantee victory in football matches.

In the three years since Real Madrid bought one-man commercial phenomenon David Beckham they have won nothing of note; no major titles and no meaningful trophies. Despite this the club now garner more income than any other in the world by virtue of their superior business activities.

Until now conventional wisdom had it that success breeds success; which in turn, at the risk of getting a touch philosophical, breeds success. United have dominated Deloitte's Money League since its first edition nine years ago because they won the most titles and cups; as a result they got rich, and as a result they became stronger as team and won even more and got richer still.

The reason United are now slipping down the financial league table is because they find themselves slipping down the actual league table. The strength of the team directly affects the club's financial performance.

Or does it? It can't all be the fault of Eric Djemba-Djemba and Diego Forlan.

If that's the case why are Real Madrid top of the financial pops? They haven't won the King's Cup since 1992/93, the Champions League since 2001/02 or La Liga since 2002/03. So why are they sitting pretty three years since their last major triumph?

Well, flying in the face of that conventional wisdom is a stupendously successful and aggressive marketing campaign that has positioned Real as the best club in the world, without actually being the best club in the world. Clever isn't it?

Real Madrid's commercial team have managed to convince the easily led that they are the best because of perceived stature. The Real Madrid brand states that class is permanent, form is temporary: 'We've won 9 European Cups, so we're the best. Thanks for coming, buy a shirt.'

That said, in part the Galacticos principle is based on the 'success breeds success' theory i.e. sign the best players and you get the best team, win titles and trophies, win new fans, earn more money, buy more players and so on, ad infinitum. It's just that the Real Madrid model is skewed in favour of flair - attack not defence - thus making it hugely flawed from a football perspective. Real's old 'Pavons and Zidanes' policy, buying amazing forwards to score the goals and sell the t-shirts while hoping that home grown defenders can stem the flow of goals at the back, doesn't work.

The perverse paradox of the policy, its evil genius, is that it doesn't have to work on the pitch to work off it.

Win or lose Beckham, Ronaldo, Zidane and Raul are packaged and airbrushed to the point that they are mythical sporting superstars despite the tarnish of sporting failure.

In the Money League the difference between first place Real Madrid and second place Manchester United is £20million. The Spanish club made £186.2million in 2004/05 while United made £166.4million.

Interestingly, under the terms of Beckham's deal with Real Madrid half his income from personal sponsorship deals go to the club. Last season the England skipper signed a deal to become the worldwide face of Gillette in deal thought to be worth in the region of £40million. The missing £20milion?

Enough of Real Madrid. What of Chelsea and that nice Abramovich chap? Well, Deloitte's Money League doesn't take into account the wherewithal of club owners or benefactors, it takes account only of income. It doesn't look at costs either. It is easy to get confused. This list is about how much money comes in, not what's left after the bills are paid. Profit and loss is another list.

So, what of the future? Does Real Madrid's overtaking of United mark a sea change, a dramatic and lasting transfer in the balance of power? Did Malcolm Glazer and sons get their timing wrong when they assumed control of United? Not according to the number crunchers at Deloitte, who see challenges ahead for Real.

Firstly the good news for the Glazers is that increasing Old Trafford to in excess of 70,000 seats will boost match-day income, and despite underachievement of late the club retain a global presence. In business vernacular they are 'well positioned'.

Furthermore, Juventus and AC Milan have recently brokered hugely lucrative television deals, and as Chelsea's on-pitch success continues so their international profile grows and therefore so does their commercial money-making ability.

Do you remember when football was a game not just a financial proposition. That's progress for you.


  • Any thoughts? Then you can email Phil Holland.