Reply to: Ronaldo going to Real for £80m

[MrMark]

Just read this one - interesting:

Yep, previous galactico signings were under the provision that 50% of "image" rights went to Real Madrid (it's attractive to the players as the club's marketing machine can do the donkey work). Problem however with trying to sell extra shirts etc is that in the growth markets 90% of this sector is counterfeit.
It's the World Cup next year, and I'm fairly sure that Sr Perez is hoping that tv rights income will keep increasing over the next few years. Incredibly enough, reports are coming in that Real are going to fork out more millions this summer - this time on the player David Villa. As Sr Perez was able to increase turnover dramatically the last time he undertook this galatico policy, he's able to get credit to do it this time. Doesn't mean success is guaranteed on the football field - it didn't happen last time! However if the banks have confidence that Perez can generate the extra income, he can spend to accumulate... Goes back to my initial analogy - If a famous Hollywood producer wants to spend £100 million on a film, he'll get the money to do so if the company concerned are confident the takings from the film will exceed the outlay...

[snaw]

Has to be said that Sr Perez increased Real's earning capability dramatically the last time he embarked on this galatico policy (and remember Real did win the big Euro cup in Zidane's first season). It all seems to depend on tv rights earning more and more for the club though.

Just read this one - interesting:

Ronaldo, a 24-year-old Portuguese center forward, will command at least the equivalent salary of Kaká, $12.8 million a year. In addition, both players will share with Read Madrid any income the club can generate in merchandise sales using their image.

[pzz76077]

Must be cool to say that you wont get out of bed for less than 80 million....

Think I will try that next time a PFY agent that hasn't read my CV calls up offering me a permie 1st line desktop support role position with a fantastic media company...

PZZ

[gingerjedi]

It's free.

Makes it's money from advertising revenue etc, cause in this global climate there's tonnes of advertising and sponsorship cash floating about ... (And TV money).

Eh? How can Barca still afford to not have shirt sponsor then? There must be some seriously gullible consumers in Spain, could be a bit dangerous basing their business models on old figures since the Spanish economy fell off a cliff last year. The emerging markets they’ve tapped into won’t be so flush either.

At least in this country most fans would keep Sky Sports as their one luxury seeing as they can't afford to go out anymore.

[snaw]

How much is a monthly subscription to ‘Cielo Deportes’?

It's free.

Makes it's money from advertising revenue etc, cause in this global climate there's tonnes of advertising and sponsorship cash floating about ... (And TV money).

[gingerjedi]

How much is a monthly subscription to ‘Cielo Deportes’?

[snaw]

But hey - they need another attacker:

Valencia have turned down a reported offer from Chelsea for David Villa, with the Spain international seemingly set to join Real Madrid instead.

Chelsea's Spanish scout, Juan Cruz Sol, met with Los Che president Manuel Llorente on Thursday in the club's headquarters to discuss the future of the 27-year-old striker.

Cruz Sol spoke to the Spanish media after the meeting, with Valencian newspaper Levante quoting him as saying: "Chelsea made an important offer for him (Villa).

"But the answer (from Valencia) was 'no' because negotiations with Real Madrid are very advanced.

"Hence, there's no possibility that Villa will go to Chelsea because he wants to go to Real Madrid.

"The purpose of the meeting was to have have some contact and know with certainty what Villa's situation is.

"Now we have clear ideas and we know that to expect."

Valencia president Manuel Llorente revealed an offer for Villa had been received but refused to confirm whether it was from Chelsea.

He told regional newspaper Las Provincias: "Yes, we have an offer for Villa but not from Spain."

Speculation has been rife Valencia could be forced to sell prize assets Villa and David Silva to ease their financial worries.

Madrid splashed out £59million on Kaka on Monday and then had a world-record £80million bid accepted by Manchester United for Cristiano Ronaldo on Thursday morning.

And it seems their summer spending, as new president Florentino Perez looks to re-establish his 'galacticos' policy, may not end there.

On whether he had spoken to Perez regarding Villa, Llorente added: "We had another conversation on Tuesday and we have started talking about the matter."

I think I'm not the only one who'll be pissing themselves when this goes completely pear shaped.

And it will.

[Doggy Styles]

Galacticos, Stalacticos...

Real Madrid might have had Figo, Zidane, Beckham, Raul, Carlos, et al, but won nothing for four years from the moment Hierro and Makele left.

And those two went because Real had no money left over to pay them any more than a small fraction of what the galacticos earned.

[MrMark]

Didn't Real Madrid sell a piddly training ground to their local council for €XXXm when it was really worth a fraction of that?

Nope - the Ciudad Deportiva was prime development land (close to Plaza`de Castilla) which is now occupied by private companies and known as the "cuatro torres" - have a peek on youtube. What was a little suspect at the time was the planning permission that was given quickly. However, the business plan of Madrid has always to develop business in that northern corridor heading out of Madrid towards Alcobendas and San Sebastian de los Reyes. If you ever get a gig out there, don't try and drive down that way at peak times - get the train or new metro line.

[gingerjedi]

Didn't Real Madrid sell a piddly training ground to their local council for €XXXm when it was really worth a fraction of that?

[snaw]

Has to be said that Sr Perez increased Real's earning capability dramatically the last time he embarked on this galatico policy (and remember Real did win the big Euro cup in Zidane's first season). It all seems to depend on tv rights earning more and more for the club though.

Reckon Ronaldo and Kaka are any more marketable than Beckham ...

[MrMark]

Mr Currie said Real were targeting the world's best players who were also the world's most marketable players.

'Fickle allegiance'

That, Mr Currie added, meant that in emerging markets fans may swap allegiance, from - for example - Manchester United to Real Madrid, simply because they preferred to support star players rather than clubs.

"They are far more fickle in terms of allegiance," he said. "But it is not about Real looking to sell more merchandising in places like China, in fact they would not make a great deal from doing that.

"They are looking to make money from these signings by maximising their future overseas TV rights," says Mr Currie.

"There will be massive TV deals coming up for them overseas in the next few years, that is the big carrot.

"With the developments this week Real Madrid will already have restored their profile and status to number one in these emerging markets.

"And the team that has the most marketable players, and the most supporters, will get the best TV deals."

'Important role'

The television money, both overseas and at home, is crucial to Real's recent surge in income in recent years.

Since 1997 Spanish clubs have sold their own rights individually.

Real Madrid signing its latest deal in 2006, for a reported record 1.1bn euros deal with Spanish film and TV company Mediapro for seven seasons of broadcast rights.

That works out at a huge 150m euros a year.

"Spanish television rights have increased significantly in the past three years, and would no doubt play an important role in these large Real Madrid transfers," says James Pickles, editor of industry journal TV Sports Markets.

Big name sponsors

But overseas merchandising, domestic and TV rights, and matchday earnings are not Real's only income streams.

It also has a number of high profile sponsorship partners - Bwin.com, Adidas, Coca-Cola, Audi, and Spanish beer brand Mahou.

An image rights deal with Adidas alone in early 2007 garnered them 762m euros.

Has to be said that Sr Perez increased Real's earning capability dramatically the last time he embarked on this galatico policy (and remember Real did win the big Euro cup in Zidane's first season). It all seems to depend on tv rights earning more and more for the club though.

[snaw]

To repeat what I'd put in previous link.

http://news.bbc.co.uk/1/hi/business/8094864.stm

Mate - they made 292 million euros in the last one.

The transfers alone for kaka and ronaldo are what - 110 million euro. Then agent fees, wages etc, plus they have a few other players on their books ...

Their is a valid argument to say this is a bit mental, financially speaking.

[Menelaus]

He was in for another 5 years - they sold cause he asked to leave ...

I agree though - he's irreplaceable at the moment.

Image rights - here's a good post fromt he Barcelona finance dude:

cough - money laundering - cough

[saptastic]

Another £20m and ronaldo is worth as much as newcastle football club.

What a strange world.