Real Madrid have revealed their official finance numbers for the 2016/17 season on their official website. The small report contains a lot of financial lingo, so below the box of data that highlights the important stuff, are a few explanations that should help the average reader get a decent sense of Madrid’s finances.
- EBITDA: Earnings Before Interest, Taxes, Depreciations, and Amortizations (this is something kind of complicated that indicates a company’s financial position and isn’t a must know to understand the general idea behind Real’s financial standing).
- Net profit: revenue minus expenditures and taxes (pre-tax profit obviously fails to subtract taxes).
- Net equity: total assets minus total liabilities.
- Assets: resources or things of value owned by a company.
- Liabilities: future payments that a company is required to make as a result of past transactions (i.e. debt).
- Liquidity: basically refers to the amount of cash Real Madrid has on hand.
- Net debt: Total debt of a company minus cash on hand, which is why the report says the €-10.3 million figure is technically “a net liquidity position.”
So, now that you’ve got some of these terms down (or maybe you already knew all of this and are rolling your eyes at my feeble attempt to explain this stuff), it’s pretty easy to see that Los Blancos are in a good financial position. The club’s revenues increased and our excellent net debt figure is down to the organization’s decision to avoid borrowing last season.
As stated in the report, the decreases you see in net profit and liquidity are down to the bonus payments Real were obligated to dish out due to the trophies Zidane won. In other words, winning big actually caused Los Blancos to lose a little money.
The forecast for this season “predicts revenues of 690.3 million euros, prior to asset disposal, and a pre-tax profit of some 48.6 million euros.”
So yeah, we’re pretty rich and are set to get richer.