LFP defends Real Madrid’s financial standing

21 Oct 2013

The Spanish Football League (LFP) has confirmed reports that Real Madrid’s debt stands at Eur541 million, but has moved to defend the club’s status by stating it has “excellent financial management”.

Real’s financial standing has hit the headlines in recent weeks after a fans group claimed that president Florentino Perez is hiding the real size of the club’s debts – a position that has also been supported by respected Spanish economist Jose Maria Gay de Liebana and the director of the Sports Economics Observatory, Plácido Rodríguez. Gay de Liebana, a professor at Barcelona University and regarded by many as Spanish football’s leading financial expert, told Spanish newspaper Diario AS that the ‘Asociacion por los Valores del Madridismo’ group is right to have its concerns. The group claimed that Real’s debt actually stands at over Eur500 million. The club said in its 2012-13 financial report last month that net debt dropped by 27.4% to Eur90.6 million – a Eur34.1 million reduction on the figures from 2011-12.

The LFP has now confirmed the Eur541 million debt level, but has stated its conviction that Real has the income-generating ability to manage this debt. According to Diario AS, the League said that UEFA takes into account net debt in its Financial Fair Play programme and in Madrid’s case this is 18% of the amount permitted, “which shows the financial excellence of the club”. The LFP said that Real also has “no debts with the tax authorities”. The LFP added: “The club has the capacity to deal with the debt and the figures show that Madrid is economically solvent, within the economic controls established.”

The LFP said that Real and FC Barcelona account for Eur900 million of Spanish professional clubs’ total Eur3.6 billion debt, as of July 30, 2012. The governing body is seeking for this figure to be reduced to Eur2.4 billion in 2014 and Eur2 billion by 2017.