Real Madrid

Real Madrid has closed out its best fiscal year in history after recording €351 million in ordinary revenue -a 20% increase compared to last year- and €83 million in earnings before interest, taxes, depreciation, and amortization -a 43% increase compared to the 2005/06 fiscal year-.

The positive evolution of the primary aspects of the Profit and Loss Account translates into a profit of €44 million before taxes, but after deducting the amount of total depreciation, the insolvency provision, and the risk contingency provisions. It does include the profit generated by the transfer of players.

The gross profit of €44 million is 12 times the budget -€3.9 million- presented and passed by the members in the Assembly of 3 December 2006.

It should be noted that, compared to previous fiscal years, the 2006/07 results do not include any capital gains from the sale of non-sporting assets, which reflects on the excellent measures taken and the strength and health of the balance sheet.

In respect to the €351 million in revenue during the fiscal year, the well-balanced, individual contribution of the three main areas or sources of revenue –stadium and friendlies, broadcasts, and marketing- should be noted, each of which contributed one third of the total amount recorded.

This diversity in the origin of revenue constitutes an important stability and balance factor for the Club, which only minimizes the negative effects of eventual fluctuations that could take place should the revenue depend on one exclusive source.

Real Madrid is also among the most efficient Clubs in the world. The indicator of personnel expenditures over ordinary expenditures –the most commonly used in football to calculate operating efficiency- is 48%.

This ratio, which was reached by efforts to reinforce the teams in both football and basketball, is lower than the 50% threshold of excellence and is clearly lower than the 70% recommended by G14.

Meanwhile, the €83 million in earnings before interest, taxes, depreciation, and amortization entail a profit of 24% of the Club’s operating income, four percent points lower than the previous year.

Obtaining this elevated operating surplus demonstrates the efficient economic management carried out throughout the fiscal year, with a combined effort to increase revenue while controlling costs.

The surplus also guarantees that the Club will have sufficient resources to invest in players and facilities defined in its development project.

The excellent numbers registered in the 2006/07 fiscal year allow for maintaining an elevated treasury, having also already met the required investment payments. Therefore, as of 30 June, Real Madrid had €98 million in liquid assets. This fund reserve allows the Club to comfortably and reliably meet the outstanding payments for investments carried out over the last few years.