Spanish La Liga giant Real Madrid is reportedly hiding the scale of its debt that could be as high as €541 million, according to a Spanish economist.
The football club has recently been criticised by a fan group that claims Real president Florentino Perez is putting them in the dark over the club’s true finances, despite Real’s 2012-13 financial report released last month stating that net debt dropped by 27.4 per cent to €90.6 million.
Jose Maria Gay de Liebana, a Spanish football financial expert, told Spanish newspaper Diario AS: “Madrid’s debt is, effectively, €541 million. That represents 64 per cent of its total liabilities. It is a very high debt and there is a problem. The short-term debt, which is €338 million, is higher than its current or liquid assets, which are €239 million. So there is €100 million in negative working capital.
“It is true that Madrid has important cash on hand – €156 million at the end of the season. But you cannot abuse negative working capital. If you look at Arsenal or Bayern [Munich], two reference points in financial management, their working capital is positive. Madrid has homework to do.”
Real last month again claimed the title of being the only sports organisation to record yearly revenues in excess of €500 million with a turnover of €520.9 million, 1.3 per cent more than in the previous period. Net profit stood at €36.9 million, a 52.4 per cent increase year-on-year.