Kaka to Madrid?

H. Pedersen · Post by **H. Pedersen** » Tue Jun 09, 2009 3:22 am

Done deal now:

http://news.bbc.co.uk/sport2/hi/footbal ... 082147.stm

Will be interesting times at Milan given that they've lost their captain, coach, and best player in the space of two weeks.

Hoboh · Post by **Hoboh** » Tue Jun 09, 2009 1:16 pm

H. Pedersen wrote:Done deal now:

http://news.bbc.co.uk/sport2/hi/footbal ... 082147.stm

Will be interesting times at Milan given that they've lost their captain, coach, and best player in the space of two weeks.

I'm available at a months notice, plenty time to pre season um!

Zulus Thousand of em · Post by **Zulus Thousand of em** » Wed Jun 10, 2009 8:26 am

I expect Platini will be asking some pretty searching questions about Real Madrid's financial status.

Oh, hang on...

Village_Idiot2 · Post by **Village_Idiot2** » Wed Jun 10, 2009 8:55 am

Zulus Thousand of em wrote:I expect Platini will be asking some pretty searching questions about Real Madrid's financial status.

Oh, hang on...

Florentino Pérez has used his political and banking connections to get a loan of €300M to Real Madrid, on the grounds that increased revenue will pay for it on the long run. Madness if you ask me, since their debt reportedly will go up to €700-€800M after this. I don't think they can repay it in the near future even if they become very successfull sporting-wise.

H. Pedersen · Post by **H. Pedersen** » Wed Jun 10, 2009 9:31 am

Village_Idiot2 wrote:
Zulus Thousand of em wrote:I expect Platini will be asking some pretty searching questions about Real Madrid's financial status.

Oh, hang on...
Florentino Pérez has used his political and banking connections to get a loan of €300M to Real Madrid, on the grounds that increased revenue will pay for it on the long run. Madness if you ask me, since their debt reportedly will go up to €700-€800M after this. I don't think they can repay it in the near future even if they become very successfull sporting-wise.

So basically he's relying on selling €300 million worth of Kaka shirts. That'll work.

Hoboh · Post by **Hoboh** » Wed Jun 10, 2009 12:33 pm

Village_Idiot2 wrote:
Zulus Thousand of em wrote:I expect Platini will be asking some pretty searching questions about Real Madrid's financial status.

Oh, hang on...
Florentino Pérez has used his political and banking connections to get a loan of €300M to Real Madrid, on the grounds that increased revenue will pay for it on the long run. Madness if you ask me, since their debt reportedly will go up to €700-€800M after this. I don't think they can repay it in the near future even if they become very successfull sporting-wise.

Totally crazy, Manure debt is huge but is very very payable for them and the Yanks will proberbly make a very handsome profit in about 5 years should oil money come calling, but Madrid ain't stuctured like that are they?

Prufrock · Post by **Prufrock** » Wed Jun 10, 2009 1:17 pm

hoboh2o wrote:
Village_Idiot2 wrote:
Zulus Thousand of em wrote:I expect Platini will be asking some pretty searching questions about Real Madrid's financial status.

Oh, hang on...
Florentino Pérez has used his political and banking connections to get a loan of €300M to Real Madrid, on the grounds that increased revenue will pay for it on the long run. Madness if you ask me, since their debt reportedly will go up to €700-€800M after this. I don't think they can repay it in the near future even if they become very successfull sporting-wise.
Totally crazy, Manure debt is huge but is very very payable for them and the Yanks will proberbly make a very handsome profit in about 5 years should oil money come calling, but Madrid ain't stuctured like that are they?

It's mental, they are fan owned right? So who gets lumbered with the debt? I bet in ain't Mr Perez.

Dave Sutton's barnet · Post by **Dave Sutton's barnet** » Wed Jun 10, 2009 1:27 pm

H. Pedersen wrote:
Village_Idiot2 wrote:Florentino Pérez has used his political and banking connections to get a loan of €300M to Real Madrid, on the grounds that increased revenue will pay for it on the long run. Madness if you ask me, since their debt reportedly will go up to €700-€800M after this. I don't think they can repay it in the near future even if they become very successfull sporting-wise.
So basically he's relying on selling €300 million worth of Kaka shirts. That'll work.

Some researchers think so

Perez rarely speaks publicly of winning trophies, only making money (for the club, natch)

It's a 57m Euro deposit to even stand for President, and Perez is the only one who could afford it

H. Pedersen · Post by **H. Pedersen** » Wed Jun 10, 2009 1:41 pm

Thanks for the article DSB, but I don't think I agree with the analysts:

Business experts Weber Shandwick Sport predict that the Brazilian playmaker's arrival will drive a sharp increase in shirt sales, sponsorship revenue, ticket sales and global fan base.

Kaka will also increase Real Madrid's opportunities for tour games to lucrative markets such as the United States and Southeastern Asia.

If Kaka is joined at the Bernabeu by World Player of The Year Cristiano Ronaldo, Professor Simon Chadwick suggests that an extra $75 million a year could be raised. Florentino Perez will be hoping that Kaka and Ronaldo will have a similar effect to that of David Beckham.

You can't compare Beckham to Kaka (and not just in the sense that Kaka is a much better footballer). Beckham was a financial windfall for them because there were people who had heard of Beckham but didn't know much about Real Madrid. I don't think the same is true of Kaka. And how will this increase touring opportunities? Any team would love a friendly against them.

Perez: "We'd like to bring Real Madrid to play your team."

MLS General Manager: "F*ck off."

Perez: "We've got Kaka."

MLS General Manager: "Oh, in that case . . ."

Frandsen08 · Post by **Frandsen08** » Wed Jun 10, 2009 1:47 pm

didnt the king of spain bail them out a few years ago??

according to the daily mail, ronaldo looks closer to following kaka

Dave Sutton's barnet · Post by **Dave Sutton's barnet** » Wed Jun 10, 2009 2:17 pm

I have my doubts too HP, with a worldwide recession people will be more tempted to buy cheaper knock-off shirts, and why not

F08: "Royal" Madrid they may be, but it was Madrid city council who, a decade or so back (under Perez's first administration), bought the land rights to RM's training ground - for a questionably high €480m or so - and handed the keys straight back

Franco's club, see

Hoboh · Post by **Hoboh** » Wed Jun 10, 2009 2:18 pm

Dave Sutton's barnet wrote:I have my doubts too HP, with a worldwide recession people will be more tempted to buy cheaper knock-off shirts, and why not

F08: "Royal" Madrid they may be, but it was Madrid city council who, a decade or so back (under Perez's first administration), bought the land rights to RM's training ground - for a questionably high €480m or so - and handed the keys straight back

Franco's club, see

Scanderlous that is brings a whole new meaning to being mugged!!

Dave Sutton's barnet · Post by **Dave Sutton's barnet** » Wed Jun 10, 2009 2:20 pm

There was supposed to be an investigation

The Socialists on the city council were up in arms, not literally this time

RM pledged to build a new training ground by 2004

Far as I'm aware, they've still not

Village_Idiot2 · Post by **Village_Idiot2** » Wed Jun 10, 2009 2:41 pm

To be honest, I'm no expert. I know that regular Spanish law regarding sport societies doesn't apply to Barça and Madrid as fan-owned clubs so I don't know what would happen if they defaulted on their debts. I assume they would be forced to sell their assets (both Barça and Madrid sit on very valuable real estate, and they have sold part of it in the past). However, every time they have faced extreme financial distress they have been able to leverage their way out of it. They both have *significant* political leverage. (in the case of Madrid historically it's been rather egregious).

Also, I'm not that sure that at today's figures football can be a profitable business by itself. Doesn't ManU operate at a loss despite being arguably the most successful team in the richest league?

Village_Idiot2 · Post by **Village_Idiot2** » Wed Jun 10, 2009 2:46 pm

Dave Sutton's barnet wrote:I have my doubts too HP, with a worldwide recession people will be more tempted to buy cheaper knock-off shirts, and why not

F08: "Royal" Madrid they may be, but it was Madrid city council who, a decade or so back (under Perez's first administration), bought the land rights to RM's training ground - for a questionably high €480m or so - and handed the keys straight back

Franco's club, see

Yes, that was quite blatant. But people have forgotten. Barça has tried some real state shadyness of its own, mind, but the City Council didn't go with it.

I'm okay with best supported teams having a financial advantage derived from the fact that they have more fans (okay, I follow a big club so I'm partial), but this kind of real estate corruption has absolutely no place in sport.

Dave Sutton's barnet · Post by **Dave Sutton's barnet** » Wed Jun 10, 2009 3:20 pm

Village_Idiot2 wrote:Doesn't ManU operate at a loss despite being arguably the most successful team in the richest league?

Like most of western society, they're in debt up to their eyeballs.

H. Pedersen · Post by **H. Pedersen** » Wed Jun 10, 2009 4:08 pm

Real estate scams are not unique to European sports. Teams are always demanding new stadiums from local governments over here because they can threaten to move the team. This is how Seattle recently lost our basketball team (good riddance really, they were shit).

Here's a fairly famous example involving the Texas Rangers. You might see a few names you're familiar with . . .

In April 1989, the Rangers' owner, oil tycoon Eddie Chiles, sold the team to an investment group that included the future President of the United States George W. Bush. Bush would serve as the Rangers' managing general partner until he was elected Governor of Texas in 1994. Chiles was a friend of the Bush family. After hearing Chiles planned to sell the team, Bush headed a group of investors that bought the team for $89 million. He secured his share of the Rangers, less than 1-percent equity, by borrowing $500,000. In late 1991 Bush increased his investment to $606,302.

During his tenure, the Rangers and the City of Arlington decided to replace the aging Arlington Stadium with a new publicly funded stadium, at a cost of $193 million, financed by Arlington residents, through a sales tax increase. Ground was broken on October 30, 1991 on what would become The Ballpark in Arlington (now named Rangers Ballpark in Arlington). The city, through the Arlington Sports Facilities Development Authority, also controversially authorized the seizure of 13 acres of land through eminent domain for the Rangers future development. Landowners filed lawsuits over the acquisition and eventually won settlements of $22.2 million which the Rangers declined to pay.

In 1998, Tom Hicks bought the team for $250 million and agreed to pay the settlement in relation to the 1991 eminent domain litigation. Bush received nearly $15 million from the sale, mostly due to a generous 10-percent bonus of the purchase price.

H. Pedersen · Post by **H. Pedersen** » Wed Jun 10, 2009 4:16 pm

Here's the justification for the Kaka strategy from Director General and Presidential Aide of Real Madrid, Jorge Valdano.

“We pay a lot for players because it is all returned with interest. Top-notch players significantly increase the quality of our contracts. It happened with Zidane and we want it to happen again. They are investments for a club that operates in the business of offering spectacle. It's like movie blockbuster, for example. Football is a sport, but it is also a business and content for the television industry. We would not be able to compete against teams like Berlusconi's Milan or Abramovich's Chelsea if that wasn't the case. We have to devise other ways to be the leader of the world of football.”

“During the first stint seven titles were won in three years. The last two years were complicated, but you mustn't forget the overall picture. The budget increased drastically and had it not, we wouldn't have been able to sign great players. The post-war Madrid was developed by Santiago Bernabeu, who wanted to build the biggest stadium in Europe, which completely contrasted with the poverty of the country. Bernabeu was ahead of his time. He was the first to see football as a show. You were only as rich as the number of tickets you could sell, which is why players like Di Stefano and Puskas were brought to Madrid. Real Madrid is the Best Club of the 20th Century thanks to that philosophy. We must now try to get fans from far off places interested in Real Madrid. And we must give them reasons to do so.”

H. Pedersen · Post by **H. Pedersen** » Fri Jun 12, 2009 7:41 am

Barca's financial guru is skeptical of the strategy:

"I do not know where the €300 million that Florentino Perez thinks he has for signings actually comes from," Sala I Martin told radio station RAC1.

"He says he will recoup it by selling replica shirts and so he will have to sell 30 million of them. That is impossible.

"Someone is going to have to give them money and it would be good if he explained it.

"How can it be that a football club has so much money to spend, bearing in mind the current economic situation in the country and the politics of credit restriction in place in all banks?

"If the money does not come from his own business, then it will come from a property developer."

http://www.skysports.com/story/0,19528, ... 85,00.html

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