Here is my latest financial information to update what I heard on Tuesday (posted 10.28 p.m. 20/08). The Bale deadline is tomorrow Friday and it seems Madrid have finally worked out they need to raise the actual cash to buy him rather than just try to talk the price down (or massively back end the payments). I have been told they are £40 million short of the upfront cash required, even if Cointrao is included. I was told Modric to United is possible but selling di Maria, Benzema or Pepe are all possibilities too. None of these would 100% have to be done by Friday but Madrid’s problem is, if they sign the contract on Bale, then their negotiating position on sales to fund his purchase becomes weaker (ie buyers would know they must sell).
The ‘apparent position’ is that Madrid have always been short of the cash required to pay our price (unless Spanish banks change their tune). So Madrid spent the summer trying to reduce the price and we ignored them. Then they tried to shift the payments until after 2016. Spurs have always known that without Madrid selling players it was most unlikely Madrid would be able to pay our price, on our terms. Madrid’s dressing room knows that too, hence the apparent indifference towards Bale from their players.
This simple stalemate between the clubs has been lost in the media barrage of leak, claim, speculation and bullsh*t. I’m told Gareth Bale has done exactly as asked by keeping schtum.
I say apparent position above because I’m also told that still nobody knows for sure if DL will sanction the deal even if Madrid find the money and agree to our price and terms. That is the reason for conflicting ITK even now. He may even have decided way back when to d**k them about after Modric? Or that the deal is too good to turn down? Or that he’ll sell now but Bale is loaned back to us one more season? We shall see.
Please note that I have no wish to be considered ITK or to join the ranks of regular ITK contributors. I only have a few weeks a year (basically my holidays) when I can regularly visit this site. However, I have two contacts very close to the current action: one medical, one financial. All in good faith.
Only bother with these two paragraphs, if you’re interested in numbers! Very few people understand Madrid’s finances. The media simplistically call them ‘the richest club in the world’ because they know little about money. It’s way more complicated than that. RM do indeed have the highest annual turnover (500m Euros per annum, give or take; mostly ticket sales, TV and commercial income) and they make about 150m profit before player depreciation and interest (EBITDA). In round numbers, their operating profit is about 50m and their official debt is about three times that number (say 150m). That’s the number they tell everybody in their accounts but that’s only their debt owed to banks (a narrow definition of debt). But look closer and the number is much higher, including amounts still owed on transfers (eg. owed to Spurs for Modric) and then normal trade and accounting debts for payroll, tax due, deferred income, accruals, trade terms with suppliers, etc. Add that lot up and Madrid’s debt is probably 600 million euros or higher.
Now, even that, isn’t necessarily a problem (in relative terms some English clubs owe as much or more). But Madrid had no bank debt at all before 2009. In that year they borrowed funds from two banks (Santander and Caja Madrid) to fund transfers. The loans were negotiated to be repaid over 5 years (2011-2015) with lower payments in the first 3 years (and larger payments in 2014 and 2015). I don’t personally know the exact terms or amounts but I’m told that Spurs (and I guess some other clubs) have a full understanding of Madrid’s ability to pay cash for Bale now., hence Madrid’s wish to pay after 2016.
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