Since the 1950s, Real Madrid has continued to be a major force in European football. As of 2013, the Spanish football club has bagged a record 32 La Liga trophies, 18 Copas Del Reys, 9 Supercopa de Espana, 1 Copa Eva Duarte, and 1 Copa de La Liga. The team has also won the UEFA Champions League 9 times along with 3 International Cups, 2 UEFA Cups, and 1 UEFA Supa Cup. The year 2013 saw Real Madrid add one more title under its belt. It is currently the world’s richest sports franchise in terms of revenue.

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Real Madrid – One Of The Richest Sports Franchises In The World

Real Madrid recorded an annual turnover of €650 million during the 2011-12 season. According to Forbes, the club itself is estimated to be worth $3.3 billion. This ranks Real Madrid as the most valuable sports team in the world, just ahead of Manchester United, which is valued at $3.17 billion and with annual earnings of €395.9 million for the same season.

According to Forbes, soccer is one of the richest sports and has the most fans. For the past two decades, revenues have been on a rising trend for Real Madrid. During the 2009-10 season, the club made up to $150 million in ticket sales alone. Last season, income from the stadium was $160 million. TV revenues brought in $250 million, and that was expected to rise in the next season. Another contributing factor to Real Madrid’s income-generating power is shirt sales. The club sells the highest number of shirts per season, with sales estimated at around $1.5 million. What’s more, Real Madrid’s shirt deal with online gambling firm Bwin (which expired in 2013) was bringing in $20 million per year. Besides being the biggest earning football club, Madrid’s operating budget is a whopping $134 million. Only the NFL Dallas Cowboys spend more money than this for club management.

Management Structure

Real Madrid’s management structure has played a big role in helping the club earn the millions it has its name. The club spends only what it earns. The main revenue streams for Real Madrid include TV deals and rights in addition to ticket and merchandise sales. The club is owned and run by its supporters (called socios), who also elect the president and assembly of delegates. Members contribute an annual fee of $195. In turn, they get discounts on ticket and merchandise purchases. Currently, Real Madrid has 60,000 socios. The club is not on the public stock market, so members cannot buy shares.

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How Real Madrid Became the Most Valuable Sports Club in the World?

Florentino Perez serves as the current president of Real Madrid which is the richest sports and has many followers. He is a Spanish mogul and billionaire in the construction industry. According to management rules, the president cannot invest his own funds into the club. This is because members own Real Madrid. However, Florentino takes the most credit for having lifted Real Madrid out of debt to where it is today since he took over in 2000. His first term in office ended in 2006, during which Real Madrid started its journey of becoming the world’s richest professional football club. In 2001, the club sold part of its training grounds and moved to Madrid. This not only helped to clear the $270 million debt at the time but also provided the cash needed to sign up new players. Florentino Perez is famous for having shelled out tons of cash to buy the most valuable players in the world. These include the likes of Christiano Ronaldo, Kaka, David Beckham, Michael Owen, Luis Figo, and Zinedine Zidane, just to name a few. A significant portion of profits from the sale went to marketing expenses, which were used to promote Real Madrid.

In 2007, BBDO ranked Real Madrid as the most valuable football brand in the world. A 2010 Harvard University study concluded that the club is among the top 20 most important brand names in the sporting world.

Will Real Madrid Retain Its Position?

The revenue sprout for Real Madrid does not seem to be ending any time soon. The club extended its kit supply contract with Adidas in 2012, which is expected to bring in $42 million annually. In the spring of 2013, Madrid signed one of its biggest deals ever with Dubai-based airline, Emirates. This company is willing to fork out $39 million annually for the next five years to have its name printed on Real Madrid shirts. Madrid is making plans to renovate their home stadium, Santiago Bernabeu, which is expected to bring in $60 million in returns in 2018. This plan along with others sponsorship deals could add up to $240 million in profits by the year 2020.

Real Madrid faces stiff competition from other clubs as far as retaining the title of the most valuable football franchise in the world is concerned. The English giant football club, Manchester United, signed a seven-season shirt sponsorship deal valued at a staggering $560 million. Barcelona is also giving Madrid a run for its money in the club value race. In fact, a recent report from Deloitte ranked Barcelona as the second richest football club in the world as of January 2014.

However, Real Madrid is one of the most consistent teams in the Spanish and European football leagues. This has enabled the club to negotiate advertising deals rather than depend on the pooling of TV rights. For as long as the club keeps winning, it is most likely going to continue signing big deals and retain its position as the richest football club in the world.

Interesting Facts

Although Real Madrid ended the 2012-13 season with only one trophy (the club won Supercopa de Espana cup), it retained its position as the richest franchise in sports for the year 2013. This can be attributed to the club’s past impressive performance record, which has earned it lucrative sponsorship and TV deals. It is worth noting that Real Madrid has remained the world’s richest professional football club since the 2004-05 season. This makes it one of the sports’ richest clubs in the world of the 21st century.