Real Madrid have been asked to explain why they did not account for the 122 million euros in expenses that appear in the statements.
The Telegraph published an exclusive article on Wednesday discussing Real Madrid’s refusal to explain the €122 million expense in its club accounts. In their annual report, they attribute around €135m to ‘other operating costs’, of which €13.6m have been paid to La Liga – which is required of all La Liga clubs anyway.
When contacted by the portal, the club neither confirmed nor denied the news that these costs are linked to a company called Providence.
In the 2017/2018 season, the club agreed with the company to pay them 216 million euros to offset the accumulated losses between 2014 and 2017. Real Madrid did not specify how this money will be repaid, although the agreement has been renewed for the 2019/2020 season.
However, The Telegraph claim that the contract states that Real Madrid will pay the company a percentage of the revenue from future sponsorship deals. The Spanish tax office considers this a debt, although the English newspaper points out that there is nothing illegal about this transaction.
The European Football Association (UEFA) also caught the eye of the story, as they could not show how these “other expenses” were accounted for in the past. UEFA takes financial Fair Play penalties very seriously, so even Real Madrid can be scrutinized.
The advantage of the operation is that the royal guard did not have to take out a loan, and therefore did not have to account for interest in subsequent expenses. They go on to point out that these unexplained “other operating costs” have been rising year on year, reaching 20% of their revenue by 2022. Real Madrid recently sold 30% of the income from the newly renovated Santiago Bernabeu stadium for the next 20 years to a company called Sixth Street for €360 million.
In recent years, Real Madrid has been constantly praised for their balanced financial management, as they survived the epidemic without any major problems. However, if The Telegraph’s assumptions are true, it would put things in a different light.
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2023-07-12 19:43:34
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