Why have Real Madrid been so quiet this transfer window?

Why have Real Madrid been so quiet this transfer window?

At the beginning of July, Guillem Balague, Sky Sports’ trusted Spanish correspondant, reported that Paul Pogba’s ‘priority’ was to join Real Madrid instead of Manchester United. Rewind to any previous transfer window and that might have well have been the end of the matter; Real Madrid want a player, a player wants to join Real Madrid, Real Madrid sign the player. Of course, in those previous years, Madrid had an advantage over their rivals because the club had set up their financial affairs tactfully to absorb mass outlays. This, along with the club’s global stature, has meant they’ve always been the team to play for in world football.

El Classico, for example, is arguably the biggest rivalry in sport. The Bernabeu is one of the biggest and most prestigious sporting arenas in the world, while the club’s shirt and badge are the most globally merchandised in the world. You can see why any outstanding player in their field would want to don the shirt of Madrid- representing either side symbolises a footballer being at the forefront of the world’s biggest sport.

But Pogba didn’t go to Madrid. He chose Manchester United instead. The reason for that? Money. It wasn’t an issue of Manchester United being the bigger, more desirable club. Pogba’s first choice was ultimately Madrid, yet he now plays in England.


In short, Madrid no longer hold the financial power to make huge signings regularly, and simply, Pogba didn’t go there because Juventus did not accept their offer for him. Since about 2002, Madrid’s president Florentino Perez has geared and structured the club so that they could broker world record deals. The whole Galacticos movement was offset by the sale of the Ciudad Deportiva, the club’s training complex, which sold for an estimated €480 million in 2003. Mass commercialisation, sponsorship and the ability to negotiate their own TV rights meant that Madrid could continue to dominate the footballing world with superior finances.

That all changed last year with the Spanish government’s legislative interference which enforced ‘collective bargaining’ on TV negotiations. Wanting to create a more level La Liga playing field, Madrid can now only legally make four times as much as any other club in the Spanish league. Naturally, Perez and Madrid went along with this kicking and screaming, with strikes and revolts planned for the end of last season, but it passed anyway. While we’re yet to see the full results of this, in 2013/2014 Madrid made £112 million from negotiating their TV rights, while Almeria made £14 million. Under the new rules, if La Liga attracted the same TV deal, there’s no doubting an ensuing decline in the club’s revenue.

But the implications collective bargaining is of course correlated to how big the Spanish TV Deal is, which makes for fairly grim reading. Of Europe’s biggest five leagues, La Liga is commanding the smallest TV deal. Consumers are clearly happy to watch Madrid and Barcelona play, but not in the narrative of a weekly 6-0 thrashing of lesser teams, with a predictable three-horse title race decided by a handful of games each year. Rather, Serie A is drawing in an estimated £1.0 billion for 17/18, the Bundesliga and Ligue 1 around £0.7 billion, while La Liga gets just £0.6 billion. It’s a sobering thought to think that Serie A, the league that has stagnated so clearly over the last decade, will be sharing an additional £400 million of TV money amongst its clubs.

2 Messi and Ronaldo

The gulf between that and England is frightening. The Premier League deal has been widely publicised as being a three year £5.34 billion deal, but that figure exclusively refers to the sale of rights to British broadcasters in the form of Sky (£4.176 billion), BT Sport (£0.96 billion), and the BBC’s highlights package (£0.204 billion). It excludes a further £2.2 billion coming in from an overseas deal, meaning the Premier League for 2016-2019 draws in £2.7 billion per season. The other four leagues combined draws an estimated £2.9 billion a season, which means clubs like Southampton and Aston Villa are making more money than the likes of Roma and Benfica.

In short, while the prices of players’ continues to inflate to new levels, Madrid’s revenue are not drawing parallel. £91 million for Pogba was too much to match this time around, and until La Liga commands a higher TV deal, it may well be for the foreseeable future. Of course, it’s not like Madrid and are about to starve as they can still rely on match day incomes and astute commercial streams to remain financially healthy. And not withstanding, there is the equally valid argument that they haven’t invested heavily this window because by rights they have the best squad in Europe which doesn’t need refreshing.

But whereas ten years ago there was a ringed inevitability that a player would wind up at Madrid, now there’ll be a posed question over whether a trip to England (or maybe even Juventus/Bayern) could be more lucrative. As the riches of the TV deal mount further and the next world record transfer fee takes another player to England, the tide will slowly turn against Madrid. This summer window, along with (to a lesser extent) David de Gea singing a new contract at United last year, has signalled the beginning of it, and it may well be a case of damage limitation until La Liga can command a much improved TV deal.


Stats taken from the fantastic Swiss Ramble blog.