Income, debt and treasury: who wins 'The Classic' of finance?

They are the two great colossi of Spanish football, but for years they are also the great dominators of European football. In sport, but also in the economic, as revealed the last annual accounts of FC Barcelona and Real Madrid. An analysis of the last six years reveals the equality between both, although always with the white ones ahead, as much in turnover, as economic profitability and, for two years, also in indebtedness. In short, very different starting points for two institutions that have before the same challenge: to maintain the competitiveness of the staff and to undertake the remodeling of the stadiums. Who wins in every facet of the game in The Classic of Finance? Real Madrid have always been ahead of Barça in terms of revenue over the last six years, except for 2015-2016, when sales of players and a prize of Nike stood at 679 million euros. In the last year, the whites were again ahead of the Catalans thanks to their better policy of selling players, since in the ordinary business was slightly below, due to the different cycles of the sponsors. The club headed by Josep Maria Bartomeu managed to advance the renewal of its contract with Nike and anticipate the improvement of technical sponsorship revenues, while this year has already launched the new alliance with Rakuten. In contrast, the entity headed by Florentino Pérez is this 2017-2018 that premieres the improvement with Emirates (70 million a year, 15 million more than its rival) and that begins to negotiate an increase of the collections that receives from Adidas to adapt it to the current market situation.

The two teams are also hunting for a sponsor to name the respective facilities. Barca is confident of bringing a proposal to the partners at an assembly scheduled for before the summer of 2018, while Madrid negotiates with Ipic to comply with the principle of agreement they reached at the time. The challenge, in both cases, has been to demonstrate that the remodelings will go ahead and the association of image will be to two of the main sporting facilities of the industry. The target is over $ 20 million paid by Metlife for the name of the venue of the New York Giants and the New York Jets. It is also intended to give an important boost to the business associated with the stadium. Assuming that the turnover by members and subscribers can hardly exceed 50 million euros annually by the policy of freezing prices and not massification of the social base, the opportunity is to provide new VIP spaces and commercial spaces.

Here Madrid already has an advantage, as it practically triples the 20 million that approximately generates the hospitality of the Camp Nou. In the area of ​​television and tours, the evolution of both is very similar, as their differences are minimal in the audiovisual distribution of La Liga and the part of the cake they receive from the Champions League is not abysmal either.

 The differences could vary in the short and medium term according to the position they occupy in the classification, although the uptrend of this business and the proximity renewal of cycles in Uefa and Liga Santander invite to the optimism in both cases, and perhaps at some moment close to 200 million euros. All this billing machinery, whether with tickets, sponsorships or t-shirts, is designed to sustain an increasingly expensive sports activity. From 2011-2012, the salary mass of Barça has increased 45%, to 432 million, while that of Madrid has done so in a 50%, up to 476 million, due to the prizes for winning the Santander League and the Champions League in 2016-2017. This amount, which includes sports salaries, sections and write-downs, will be 588 million and 450 million, respectively.

In other words, while Madrid has managed to contain spending without losing cash and strengthening the squad, Barça has made a significant jump in the extraordinary income from the sale of Neymar, whose net impact was 144 million, net of the provision of 44 million for the litigation that remains with the player and the remaining amount remaining to be amortized.

 This is not a trivial matter, as this circumstance forces the club led by Óscar Grau to seek additional income for 150 million euros a year in a single course, but only to support what already exists. In the Camp Nou they defend that long-term players like Messi, Luis Suárez, Piqué or Sergi Roberto have been tied in the long term, in addition to that they hope to be able to close the exit of some soccer players that generate income and liberate mass salary. On the contrary, this obligation to generate money for the staff will be detrimental to the ability to generate resources to face Espai Barça or improve profitability. It is a plot in which the white set surpasses it, although not