Real Madrid are Champions League winners once again, with their dominance showing no signs of waning.
The easier part was the 90 minutes, as Real Madrid secured their record-extending 15th Champions League title by defeating Borussia Dortmund in Saturday’s final.
Although Madrid did not perform at their best, they still managed to secure the win, as they often do. Goals from Dani Carvajal and Vinicius Junior resulted in a well-earned 2-0 victory, with club captain Nacho lifting the trophy to cap off another exceptional season both on and off the pitch.
The more challenging aspect has been reaching a position where such victories seem almost inevitable, thanks to intelligent planning and decisive actions at the Santiago Bernabeu, particularly by Real Madrid’s influential president, Florentino Perez.
Carlo Ancelotti’s team has had an outstanding season. They clinched this season’s La Liga title with 95 points from 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 approaching.
In addition to their La Liga triumph, they won the Supercopa de Espana in January and suffered just two losses in all competitions all season—both to Atletico Madrid, who at least denied them in the Copa del Rey last-16.
The future looks even brighter for Madrid, with key players Jude Bellingham, Vinicius Jr, Federico Valverde, Rodrygo, Eder Militao, Aurelien Tchouameni, and Eduardo Camavinga all still in their early to mid-20s.
They are also about to add the world’s best player in Kylian Mbappe, along with Brazilian wonderkid Endrick, who turns 18 in July.
Off the pitch, Madrid topped Deloitte’s Football Money League 2024 with the highest revenues in the game over 2022-23. A 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 this follows the impressive and costly rebuild of their Santiago Bernabeu stadium.
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Madrid Appears To Be in A Position of Dominance. But How Have They Achieved This, and How Far Can They Go?
Madrid’s incredibly successful 2023-24 season was unexpected, even within the Bernabeu.
At the end of the previous season, the outlook was bleak. Madrid had been thrashed 4-0 by Pep Guardiola’s Manchester City in their Champions League semi-final second leg, while Xavi’s Barcelona comfortably won the 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. By last summer, Cristiano Ronaldo, Sergio Ramos, Gareth Bale, and Karim Benzema had all left. These were supposed to be transitional years for the team.
However, the rational approach to rebuilding the team, especially when compared to Barcelona in recent years, has been key to Madrid’s ongoing success both 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 relationship 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: €100 million (£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.”
In addition to selling Ronaldo to Juventus in 2018, Madrid have also been ruthless with other aging players. For instance, they received €70 million 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. They have also taken advantage of market opportunities, such as the cut-price arrivals of Thibaut Courtois, David Alaba, and Antonio Rudiger.
This is a much more astute transfer approach compared to the ‘Galacticos’ policy during Perez’s first term as president from 2000-06, when they signed the biggest and most expensive stars each summer, from Zinedine Zidane to David Beckham. In recent years, Madrid have been relatively frugal in the market (except for summer 2019, when €350 million was spent on flops including Eden Hazard and Luka Jovic).
Last summer’s transfer window fit with the new model. Ancelotti would have liked to spend €100 million 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 €20 million went on talented Turkish youngster Arda Guler.
Data from Football Benchmark shows that 55 percent of Madrid’s total transfer spend over the last six years was on players aged 21 or younger—€415 million out of a total of €755 million. Between 2018-19 and 2023-24, only Chelsea (€677 million) spent more on such young emerging talents.
Madrid’s current squad value, as estimated by Football Benchmark, is €1.1 billion, placing them third behind Manchester City and Arsenal. However, Madrid is almost certain to move to the top of that list within the next 12 months as their younger players mature and improve.
Bellingham’s tremendous season saw his predicted worth rise to €188 million, making him the most valuable current player in the world according to this model. Vinicius Jr is third (€176 million) and Rodrygo is eighth (€121 million), 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 has also increased Madrid’s squad value by approximately €220m-€230m, in addition to his remarkable quality on the field. Any further notable signings are likely to be youthful talents with room for further growth, with Alphonso Davies from Bayern Munich and Leny Yoro from Lille among those being considered.
Comunicado oficial: Mbappé.#RealMadrid
— Real Madrid C.F. (@realmadrid) June 3, 2024
Furthermore, the squad overhaul in recent years has led to a decrease in Madrid’s wage bill. Total staff costs decreased from €519 million to €453 million for the 2022-23 season, as high-earning players such as Bale and Isco departed.
With a staff costs-to-revenue ratio of 55 percent, Madrid ranked seventh lowest among this year’s eight Champions League quarter-finalists. This figure is expected to decrease further for the 2023-24 season, as Hazard and Benzema have left, and Bellingham currently earns significantly less than either of them did. While Mbappe’s substantial salary will likely be added next year, Toni Kroos’ retirement creates space, and club revenue is also projected to increase significantly.
Regardless of whether Madrid ended the season as Champions League winners or not, their annual financial reports have consistently shown a positive operating result since 2002-03. The most recent figure for 2022-23 was a modest profit of €11.8 million, achieved from record annual revenues of €831 million. This accomplishment propelled Madrid ahead of Manchester City to top Deloitte’s Money League, marking the first time they have been the world’s highest revenue-generating club since 2017-18.
When Perez’s first term as president began in 2000, Madrid ranked sixth on Deloitte’s Money League list. The Galacticos policy proved so successful (financially) that Madrid topped the list from 2006 to 2015.
Since then, Manchester United, Barcelona, and Manchester City have each held the title of the world’s highest-earning club at different times, while other clubs such as PSG and Chelsea have outspent Madrid on transfers and wages.
Perez has often criticized how “state-owned” clubs like City and PSG have an unfair advantage over his ‘socios-owned’ club (socios are club members). Despite this, Madrid’s smart decision-making has allowed them to remain competitive at the highest level, according to Borja Garcia.
“Real Madrid’s financial management under Perez has been very good,” Garcia says. “They didn’t reinvent the wheel, but Perez arrived with a clear vision of modernisation, following trends in the global sports market. The Galacticos policy worked well, but now the club generates much more revenue, especially through the stadium.”
Financial Strategy and Future Prospects for Real Madrid
The €1.3 billion Bernabeu remodeling has been over two decades in the planning. Even as work continued through the 2023-24 season, the club projected its total matchday revenue to grow from €140 million to €317 million. With the full exploitation of its new VIP and executive areas, this number is expected to increase significantly in the coming years.
Real Madrid’s €1 billion Bernabeu rebuild is fun, futuristic, and nearly finished.
Non-matchday use of the stadium, with its prime city-center location, is also a priority. Madrid’s hierarchy has discussed hosting over 50 non-sporting events annually.
Taylor Swift recently performed two sold-out concerts at the stadium, generating an estimated €5 million for the club. A regular-season NFL game is scheduled for 2025, another lucrative event. Additionally, a large underground car park is projected to bring in €470 million over the next 40 years.
“We’ll see significant 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 push them over the €1 billion annual revenue mark.”
Winning this year’s Champions League will bring Madrid around €80 million in UEFA prize money, including €20 million for winning the final (with beaten finalists receiving €15.5 million). Winning the trophy six times in the past 11 seasons has brought almost €500 million in prize money and highly 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, with partnerships with Adidas (€120 million per year) and Emirates Airline (€70 million per year).
Another key aspect of Madrid’s value is its global reach and brand. Last September, the club announced it was the first football team to surpass 500 million followers across all its official social media accounts (according to the social media analytics tool Blinkfire). Madrid operates 37 different official accounts in seven languages: Spanish, English, Arabic, French, Portuguese, Japanese, and Chinese. This self-image, led by Perez, fosters extra engagement and motivation among its followers.
“Real Madrid has a very broad patrimony and global brand,” Garcia says. “They’ve worked on that and benefited from it significantly in recent years.”
“Through social media and other media outlets, they’ve created a narrative, 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 led to Madrid being named the most valuable football club in the world by Football Benchmark, with an ‘enterprise value’ of €5.1 billion, ahead of Manchester City FC (€4.9 billion) and Manchester United (€4.8 billion).
However, the financing of the Bernabeu mega-project means not all such revenues can be reinvested into the team. Perez told club socios at last November’s AGM that repayments would be around €60 million per annum for the next 30 years.
This does not include payments due to global investment firm Sixth Street, which provided €360 million towards the stadium project in exchange for a reported 30 percent of stadium-based revenue (excluding season tickets) over a 20-year period. United States private equity group Providence also provided €250 million in funding for a share of future sponsorship revenues (which was €26.6 million in 2022-23, per the club’s accounts).
Madrid strongly rejects any comparison between these deals and Barcelona’s famous ‘levers’, which raised €867 million for the Catalan club in exchange for a significant cut of its future revenues.
“Madrid has its 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 maneuvers. Last summer, it fined Barcelona €500,000 for using its ‘levers’ to avoid big losses in its annual accounts. Madrid could theoretically face similar sanctions when UEFA releases its annual ‘sustainability’ calculations this summer.
Another potential issue—albeit one Madrid argues will eventually have a silver lining—is their continued support 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 organizers, based in Madrid and close to Perez, continue to press ahead with their plans for a new competition. The most optimistic supporters predict a launch as soon as September 2025, with hundreds of millions of euros in revenue further strengthening Madrid’s finances.
Also incredibly strong is Perez’s position as Madrid president, following 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 centralized in one 77-year-old is problematic for some.
“The great potential shadow in Madrid’s future is 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.”
