Would Fortune Favour Real Madrid Just Because They Dared To?

Posted the other day No Risk No Gain? Fortune Favours The Brave?

I was amused by the comments made in the article Fortune favours those who dare. In it the writer used Real Madrid as an example.

• Real Madrid grabbed the headlines and imagination of football fans around the world after it broke the world transfer record twice to buy two of the biggest names in the game. Having spent US$94mil to buy Kaka from AC Milan, Spain’s most decorated team then splurged US$131mil to secure the services of Cristiano Ronaldo from Manchester United.
  
  Indications are that the spending by Real Madrid has not dried up and the repercussions and reactions on and by other teams will be pronounced too during the summer transfer window period.
  
  Drawing similarities to the corporate world, investments by companies during these trying economic times too are continuing but understandably, have not kept pace with the football teams.

I just finished reading Myles Palmer article. It's excellent.

• The Calderon era, from July 2006 till now, admitted financial problems in April 2008, when they had to take out a £24.5 million loan to make up for the loss of David Beckham. When the English icon joined LA Galaxy in July 2007 he left a hole in their finances which had to be covered by a 30 million euro loan !!!!
  
  A study by the International University of Catalonia claimed that Real lost up to 45 million euros in annual revenue when Beckham left the club for the USA.
  
  This week, as flamboyant Florentino kicks off his second term by signing three galacticos in one summer rather than just one every year, we learn that two banks have given him colossal loans to fund the acquisition of Cristiano Ronaldo for £80 million, Kaka for £59 million, and the hottest box striker in world football, Valencia's David Villa, the next superstar on his list.
  
  Spanish building society Caja Madrid has agreed to loan of 76.5 million euros to the club, which has put up two undisclosed sources of collateral, and Spain's largest bank, Banco Santander, has agreed to lend them a similar amount.
  
  After a decade-long construction boom, Spain's economy is in recession and banks are suffering because of their exposure to the real estate sector. Caja Madrid's profits fell 71% in 2008.
  
  So claims that Real Madrid could fund the capture of Kaka and Cristiano Ronaldo out of their huge merchandising income are complete fantasy. Total rubbish. Complete garbage. Their shirt sales tanked two years ago when Beckham left.
  
  Florentino is looking to sell nine players and buy seven.
  
  Graham Hunter was Sky on Thursday morning saying that three banks have given a line of credit to Real Madrid up to 800 million euros.
  
  Eight hundred million euros ???
  
  They want Arbeloa, who is a product of the Real Madrid academy, but say Rafa's price of £10 million is too much. Valencia, another Spanish club have huge debts but Madrid show scant sympathy for them and keep trying to chisel a few million off the price of David Villa, whose buy-out clause is 38 million euros, apparently.
  
  Madrid's No.1 target now is Franck Ribery and Florentino's special adviser Zidane is talking directly to Ribery. Rummenigge says hes not for sale, although Beckenbauer reckons Bayern should let him go. I've heard that general manager Uli Hoeness has more power there than either of those two and that even the Kaiser can't over-rule Hoeness.
  
  Real Madrid have always been backed by the King, the government and the banks but it's now become ridiculous. Ken Lay and the big wheels at Enron thought they had friends in high places too, and they did have friends in high places, but Enron went belly up.
  
  If it was Chelsea or Liverpool borrowing 800 million euros, FIFA president Sepp Blatter would be going ballistic. So would Uefa chief Michel Platini.
  
  Their silence is the loudest silence in the history of football. It's deafening.
  
  Apparently, says Graham Hunter, Barcelona have only 35 million euros to spend this summer and keeper Victor Valdes wants the same wages as Casillas gets at Real Madrid : 9 million euros
  
  Somebody should write a book about this colossally crazy roll of the dice by the most refrigerated risk-taker that the football business has ever seen.
  
  It looks like madness, it should end in tears, it's an over-reaction to Barcelona's treble, and it's designed to make sure that Real Madrid, nine times the European champions, don't get their arses kicked yet again in the first knock- out round. (source here )

Yup, it's utter madness.

• If it was Chelsea or Liverpool borrowing 800 million euros, FIFA president Sepp Blatter would be going ballistic. So would Uefa chief Michel Platini.
  
  Their silence is the loudest silence in the history of football. It's deafening.

And as mentioned here, it's simply utter bollocks that FIFA is not saying anything!

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ps: There was a past lesson in the collapse of Leeds United. See Burning Money!