The easier bit was the 90 minutes as Real Madrid won a record-extending 15th Champions League title by beating Borussia Dortmund in Saturday’s final.
Madrid did not play as well as they could but they found a way to win, as they so often do. Goals from Dani Carvajal and Vinicius Junior brought a deserved 2-0 win in the end, and club captain Nacho lifted the trophy to crown what has been another spectacular season on and off the pitch.
The more difficult part has been getting into a position where such victories seem the almost inevitable consequence of intelligent planning and ruthless decision-making at the Santiago Bernabeu, especially by Madrid’s all-powerful president Florentino Perez.
This has been a very good season for Carlo Ancelotti’s team. They won this season’s La Liga title with 95 points from their 38 games, finishing 10 points ahead of second-placed Barcelona — even after easing up and drawing their last two games with the big Wembley date looming.
They also won the Supercopa de Espana in January and lost just twice in all competitions all season — both times to Atletico Madrid, who at least denied their neighbours in the Copa del Rey last-16.
The future at Madrid looks even brighter still, given that key players Jude Bellingham, Vinicius Jr, Federico Valverde, Rodrygo, Eder Militao, Aurelien Tchouameni and Eduardo Camavinga are all still in their early to mid-20s.
They are also now about to add the world’s best player in Kylian Mbappe, and another Brazilian wonderkid is also arriving in centre-forward Endrick, who turns 18 in July.
Off the pitch, Madrid topped Deloitte’s Football Money League 2024 with the highest revenues across the game over 2022-23. Another more recent study by data analytics company Football Benchmark puts their ‘enterprise value’ above all other clubs — and predicts they will soon have the most valuable squad in football.
All of this after their Santiago Bernabeu stadium has been impressively and expensively rebuilt.
Madrid truly look to have a position of dominance. But how have they done it? And how far can they go?
Madrid’s super successful 2023-24 was not expected, even at the Bernabeu.
At the end of last season, the outlook was far from bright. Madrid had been thrashed 4-0 by Pep Guardiola’s Manchester City in their Champions League semi-final second leg, while Xavi’s Barcelona easily won La Liga title.
The biggest names of the Madrid team that won four Champions Leagues in five seasons from 2014 to 2018 were no longer around: come last summer, Cristiano Ronaldo, Sergio Ramos, Gareth Bale and Karim Benzema had all left. These were supposed to be years of transition for the team.
Madrid celebrate their Champions League victory (Julian Finney – UEFA/UEFA via Getty Images)
But the rational way growth towards a new team has been handled, especially compared to what happened at Barcelona in recent years, has been key to Madrid’s continuing strength on and off the pitch, argues Borja Garcia, reader in sport policy and governance at Loughborough University.
“Madrid has been managed with the club’s financial health as a priority, which clearly did not happen at Barcelona,” he says. “Look at the relation of each club with its biggest stars.
“Perez decided, for the good of the club, to sell Cristiano Ronaldo for as much money as possible: €100million (£85.2m; $108.5m at current rates). Barcelona were more emotional. They tried to keep Lionel Messi as long as possible on very high wages, and when he left, he left for free.”
As well as selling Ronaldo to Juventus in 2018, Madrid have also been ruthless with other ageing players. For instance, taking €70million from Manchester United for Casemiro, then 30 years old, in the summer of 2022.
Meanwhile, Madrid have mostly invested in signing the best young players in the world: Vinicius Jr, Rodrygo, Camavinga, Tchouameni and Bellingham. As well as taking advantage of market opportunities, such as the cut-price arrivals of Thibaut Courtois, David Alaba and Antonio Rudiger.
It is a much more canny transfer approach than the ‘Galacticos’ policy during Perez’s first term as president from 2000-06, when each summer they signed the biggest and most-expensive star, from Zinedine Zidane to David Beckham. In recent years, Madrid have been relatively frugal in the market (except for summer 2019, when €350milllion was spent on flops including Eden Hazard and Luka Jovic).
Zidane and Beckham lining up for Madrid in 2003 (Boris Horvat/AFP via Getty Images)
Last summer’s transfer window fit with the new model. Ancelotti would have liked to spend €100million on 30-year-old England captain Harry Kane, but Perez preferred to invest a similar sum in Bellingham (who is a decade younger). The other transfers were also smart. Veteran backup striker Joselu arrived for a loan fee of €500,000, and €20m went on talented Turkish youngster Arda Guler.
Data from Football Benchmark shows that 55 per cent of Madrid’s total transfer spend over the last six years was spent on players aged 21 or younger — €415million out of a total of €755m. Between 2018-19 and 2023-24, only Chelsea (€677m) spent more on such young emerging talents.
Madrid’s current squad value (as estimated by Football Benchmark) is currently €1.1billion, which leaves them third behind Manchester City and Arsenal. But the Bernabeu outfit are almost certain to move top of that list within the coming 12 months as their younger players mature and improve.
Bellingham’s tremendous season saw his predicted worth rise to €188million, making him the most valuable current player in the world according to this model. Vinicius Jr is third (€176m) and Rodrygo is eighth (€121m), while Valverde, Tchouameni, Camavinga, Guler and Brahim Diaz are all increasing in value too. The ratings below, based on a model devised by sports intelligence firm Twenty First Group, help show the strength of many Madrid players whose best days are still ahead of them.
Mbappe’s arrival would also add about €220m-€230m to Madrid’s squad value, as well as his immense quality on the pitch. Any other significant signings will almost certainly be younger players with the potential to improve still further, with Bayern Munich left-back Alphonso Davies and Lille centre-back Leny Yoro among those under consideration.
Meanwhile, the squad turnover of the last few years has seen Madrid’s wage bill fall. Total staff costs dropped from €519million to €453m for the 2022-23 campaign, as big earners such as Bale and Isco left.
A staff costs-to-revenue ratio of 55 per cent was the seventh lowest of this year’s eight Champions League quarter-finalists. And Madrid’s 2023-24 figure is likely to be lower again, given Hazard and Benzema left, and Bellingham currently earns significantly less than either did. Mbappe’s bumper salary will likely be added next year, but Toni Kroos’ retirement opens up space, and club revenue also looks set to grow substantially.
Whether Madrid have finished the season by winning the Champions League or not, their published annual accounts have shown a positive operating result every year since 2002-03.
The most recent figure in 2022-23 was a modest €11.8million profit, which came off club record annual revenues of €831m. That saw Madrid overtake Manchester City to top Deloitte’s Money League, the first time they have been the world’s biggest revenue generators since 2017-18.
Madrid were sixth on that list when Perez’s first term as president began in 2000. The galacticos policy worked so well (financially) that Madrid topped it from 2006 to 2015.
Since then, however, Manchester United, Barcelona and City have all had spells as the world’s biggest earning club, while others such as PSG and Chelsea have been able to out-compete Madrid in spending on transfers and wages.
Perez has complained a lot about how “state-owned” clubs such as City and PSG have an unfair advantage over his ‘socios-owned’ club (socios are club members). But Madrid’s smart decision making has still meant they could continue to compete at the highest level, Garcia says.
“Real Madrid’s financial management under Perez has been very good,” he says. “They didn’t reinvent the wheel, but he arrived with a clear idea of modernisation, following trends in the global sports market. The galacticos policy worked well. But now it has changed and much more money is generated around the club itself, especially with the stadium.”
Madrid’s Santiago Bernabeu pictured in January (Florencia Tan Jun/Getty Images)
The €1.3billion Bernabeu remodelling has been over two decades in the planning. Even as work has continued through the 2023-24 season, the club projected its total season matchday revenue to grow from €140million to €317million. When all its expensive new VIP and executive areas are fully exploited, this number should increase significantly further in the coming years.
GO DEEPER
Real Madrid’s €1bn Bernabeu rebuild is fun, futuristic – and almost finished
Non-matchday use of the stadium, with its excellent city-centre location, is also a priority. Madrid’s hierarchy have talked of hosting over 50 non-sporting events each year.
Taylor Swift played two sold-out concerts at the stadium in the last week, generating an expected €5million for the club. A regular-season NFL game will take place at the ground in 2025, another money-spinner. A huge underground car park is also forecast to be worth €470m to the club over the next 40 years.
“We’ll see the major growth for Real Madrid on the stadium revenue side,” says Football Benchmark founder Andrea Sartori. “They now have a major competitive advantage over all other European clubs. Very soon the new Bernabeu will bring them over the €1billion annual revenue mark.”
Winning this year’s Champions League will be worth around €80million in UEFA prize money to Madrid, including €20m for winning the final (beaten finalists get €15.5m). Lifting the trophy six times in the past 11 seasons has brought almost €500m in prize money, and hugely valuable visibility on the biggest stages for sponsors.
Playing and winning so many finals is one reason why Madrid’s jersey is the most lucrative in the world, thanks to partnerships with Adidas (€120m per year) and Emirates Airline (€70m per year).
Another key part of Madrid’s club value is its global reach and brand. The club itself last September trumpeted being the first football team to top 500million followers across all its official social media accounts (based on information from the social media analytical tool Blinkfire). Madrid have 37 different official accounts in seven languages: Spanish, English, Arabic, French, Portuguese, Japanese and Chinese. It also has a self-image, led by Perez, that builds extra engagement and motivation amongst its followers.
“Real Madrid has a very broad patrimony and global brand,” Garcia says. “They’ve worked on that, and benefited from that, a lot in recent years.
“Through social media, and also other media outlets, they’ve created a discourse, or an alternative reality, with followers who are more active and engaged. Madrid is the richest club in the world, the most successful, but at the same time: ‘everyone is against us, they all hate us’. I’ve never seen anybody as subjugated, and at the same time powerful, as Real Madrid.”
Such an ability to generate revenues saw Madrid named as the most valuable football club in the world by Football Benchmark with an ‘enterprise value’ of €5.1billion, ahead of Manchester City FC (€4.9bn) and Manchester United (€4.8bn).
The financing of the Bernabeu mega-project however means that not all such revenues can be invested back into the team. Perez told club socios at last November’s AGM that repayments will be around €60million per annum for the next 30 years.
That does not include payments due to global investment firm Sixth Street, who provided €360million towards the stadium project, in return for a reported 30 per cent of stadium-based revenue (excluding season tickets) over a 20-year period. United States private equity group Providence also provided €250m in funding in exchange for a share of future sponsorship revenues (this was €26.6m in 2022-23, per the club’s accounts).
Madrid strongly reject any comparison between these deals and Barcelona’s famous ‘levers’, which raised €867million for the Catalan club in exchange for a big cut of its future revenues.
“Madrid have their own ‘levers’, but it does not seem particularly concerning for the future,” Garcia says. “Although we’ll have to see if the Bernabeu actually hosts as many big events as they want.”
A potential complication from the stadium financing is UEFA’s interpretation of such manoeuvres. It fined Barca €500,000 last summer for using its ‘levers’ to avoid big losses in its annual accounts. Madrid could in theory face similar sanctions when UEFA releases its annual ‘sustainability’ calculations this summer.
Another potential cloud on the horizon — albeit one Madrid argue will eventually have a silver lining — is their continued backing of a breakaway European Super League. Both UEFA and the Super League’s backers claimed victory after last December’s European Court of Justice ruling on the issue, and again after a similar ruling last week by a Spanish court.
The Super League’s organisers, based in Madrid and close to Perez, are continuing to press ahead with their planning for a new competition. The most optimistic of its boosters predict a launch as soon as September 2025, and hundreds of millions of euros in revenues to further strengthen Madrid’s finances.
Also incredibly strong is Perez’s position as Madrid president, after regular tweaks to club statutes to ensure ever tighter control of its policies. Perez has argued that this brings stability and protects the club’s socio-owned model. However, so much power centralised in one 77-year-old is problematic for some.
“The great potential shadow in Madrid’s future are the setbacks within the club’s democracy,” Garcia says.
“Perez has modified the club’s statutes to take power away from the socios. It’s now very difficult to object to any board decision or to get any accountability.
“But maybe Madrid’s socios don’t care too much, as long as the team keeps winning.”
(Top photo: Michael Regan – UEFA/UEFA via Getty Images)
