Real’s marketing miracle could be coming to an end

Cristiano Ronaldo jersey.JPG
Those CR9 jerseys have not been flying off the shelf
In 2000, Fiorentina Perez joked that Madrid, as an ideal, was above titles.
He was talking about money. The club is a money making machine and in 2000, it made €100 million. Last year the revenues exceeded €400 million. With Ronaldo and Kaka in the squad the club could be on pace to exceed €500 million by 2012. Real has outstripped its competitors by peddling memories of a glorious past and the image rights of its current superstars.
The only clubs keeping up are Barcelona and Man Utd.
The outlay on transfers has not been matched by a commensurate increase in titles won. Since 2000, Real has only won 10 titles of the 38 competed. The discrepancy worsens after 2004, with only 3 titles won in 20 competitions.
The defeat at the hands of Lyon, was the sixth time in succession that the Merengues were eliminated in the Champions League knockout stage. Far from the sobriquet of European excellence in footballing terms. Luckily, the club has never had to rely on the boost provided by CL money, unlike Liverpool where transfer money is heavily weighted by European success.
However, times maybe changing. The paucity of titles is gradually having a deleterious effect on club revenues. Coupled with the drag on the economy that has hit Spain hard with unemployment rates spiking to almost 20%.
The Bernabeu has seen attendances decline almost 8% from last season and the Kaka and Cristiano Ronaldo jerseys have not been the envisioned bestsellers. Real now sells less jerseys than Chelsea and Liverpool. The €151.5 million in low interest bank loans which Real borrowed to fund its €250 million buying spree need to be repaid through 2015. The massive investment in players has swelled the club debt to well beyond its current €510 million account.
All these adverse figures could have been leavened by the €60 million in CL prize money, TV fees, and performance related bonuses that Real missed out on when it lost to Lyon.
“Real Madrid has a lot resting on its role in the Champions League,” said Jose Maria Gay, a Barcelona University professor who specializes in soccer finance. “Its costs have soared and it’s under pressure to increase its income by about 20 percent to balance its accounts.”
A return to the Bernabeu to contest this year’s CL finals could have not only provided Real with a glorious homecoming, but a short term economic boost. The real danger is the long term effects of all these curtailed CL appearances. Selling Ronaldo jerseys may not be feasible when the club has been “out of sight, out of mind” on the world stage for so long.

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