Real Madrid has to work hard to make its record bet on Cristiano Ronaldo and other players pay off amid an economic slump, President Florentino Perez said. Sales are forecast to rise 1.7 percent this season, the smallest increase in more than a decade.
Soccer’s richest club by sales spent some 362 million euros ($462 million) acquiring Ronaldo, Sami Khedira and 12 others since last year and also hired Jose Mourinho as coach. As Spain emerges from two years of recession, Real’s pretax profit is forecast to slide 38 percent to 19.1 million euros in the year through June 2011, according to accounts approved by members.
The economy “is quite bad,” Perez told the club’s annual general meeting yesterday, citing sluggish sales of pay- television games. “We have to keep working. A lack of financial resources can mean you lose your position” in European soccer, he said.
The team didn’t win a trophy last season and Perez’s policy of acquiring star players is “mortgaging” its wealth, according to Eugenio Martinez, a former HSBC Holdings Plc banker who stood against Perez last year. Martinez is president of a pressure group of 1,500 members.
Real borrowed 151 million euros from banks to acquire Ronaldo and Kaka last year and was since loaned another 10 million euros, the accounts show.
“It’s short-termism” to sign players rather than develop them, Martinez said in an interview. “If we win a title it’s OK but if not there’s a problem.”
Real Madrid won the last of its record nine European titles in 2002.
Members who attended the annual general meeting approved the season’s budget, with 717 voting in favor and 23 against. Sixteen abstained.
Sales increased 8.6 percent to 442 million euros in the year through June, maintaining Real Madrid as the biggest soccer club by sales. That was partly because of receipts from staging the Champions League final between Inter Milan and Bayern Munich, according to the accounts.
Real Madrid cut net debt by 25 percent to 245 million euros in the year to June, the accounts say. It’s committed to repay 45 million euros of bank loans this season and 64.2 million to other clubs for players.
The club has “one of the biggest debts” in European soccer, Martinez said. Its debt is “neither big nor small,” according to Perez.
Real Madrid beat Osasuna 1-0 two days ago after a 0-0 draw at Real Mallorca in its first Spanish league game. It hosts Ajax in its Champions League opener on Sept. 15.
After hiring Mourinho, who guided Inter to the European Cup and Italian league and cup trophies last season, Real Madrid “is on the right track” to win titles again, Perez said.