REAL MADRID BECOMES THE FIRST FOOTBALL CLUB TO EXCEED ONE BILLION EUROS IN REVENUE
REVENUES FOR THE 2023/24 SEASON, NOT INCLUDING PLAYER TRANSFERS, REACH 1.073 BILLION EUROS, SOME 27% UP ON THE LAST YEAR.
REAL MADRID MAKES 16 MILLION EUROS IN PROFIT FOR THE 2023/24 FINANCIAL YEAR.
THE CLUB MAINTAINS ITS SOUND FINANCIAL STATUS WITH A NET EQUITY OF 574 MILLION EUROS.
| FINANCIAL SUMMARY 2023/24 (excluding stadium renovation project) | ||
| MILLIONS OF EUROS | 2022/23 | 2023/24 |
|---|---|---|
| Revenues (prior to profit/loss on disposal of fixed assets) | 843,0 | 1.073,2 |
| EBITDA prior to disposal | 84,1 | 143,6 |
| EBITDA | 157,6 | 156,3 |
| Profit after tax | 11,8 | 15,6 |
| Net equity as of 30 June | 558,1 | 574,1 |
| Liquidity as of 30 June | 128,2 | 82,0 |
| Net debt as of 30 June | -46,8 | 8,5 |
| EBITDA to debt ratio | 0,0x | 0,1x |
| Debt/equity ratio | 0,0x | 0,0x |
| STADIUM RENOVATION PROJECT (MILLIONS OF EUROS) | ||
| 2022/23 | 2023/24 | |
|---|---|---|
| Total investment | 892,7 | 1.162,6 |
| Loan used | 800,0 | 1.154,6 |
The Real Madrid Board of Directors, which met on the 23rd of July, has prepared the annual accounts for the 2023-2024 financial year.
On the pitch, the football first team won the Champions League for the sixth time in the 2014-2024 period, as well as the LaLiga title and the Spanish Super Cup. The basketball first team won the League, the Copa del Rey and the Spanish Super Cup, as well as making the EuroLeague final.
This has all contributed to improved revenues, but also higher costs, in particular related to sports squad bonuses.
Operating income (before disposal of fixed assets) for the 2023/24 financial has totalled 1.073 billion euros, an increase of 230 million euros (27%) compared to the 2022/23 financial year. In this period, despite the stadium not being fully operational, the Club has succeeded in eclipsing the one-billion-euro mark in operating income before disposal of fixed assets. This is an unprecedented figure for any football club.
Every line of business has seen growth, with the exception of broadcasting rights, where revenues received from LaLiga in 2023/24 were lower than in the 2022/23 season. The gains in marketing and the stadium are particularly notable.
From a commercial perspective, the Club has significantly boosted its merchandising and sponsorship activities during the 2023/24 financial year. A substantial element in relation to the latter is the new deal with HP to be the team's sleeve sponsor.
As for the stadium, despite the business elements related to the remodel not being fully complete, there has been a progressive increase in terms of capacity and commercial operations over the course of the year. This saw the initiation of new business areas in the latter part of the financial cycle, in particular hosting major events and a new premium offering with new VIP experiences.
This has all resulted in a significant increase in stadium-related revenues, although it won't be until the 2024/25 year that the stadium becomes fully operational in every area of business. Lastly, revenues from international competitions has seen a boost following victory in the Champions League (semi-finalists last year).
The ratio value for the 2023/24 sits at 47%, an improvement of 7 percentage points on the previous year (54%), and this is despite the impact of sporting titles: ignoring said impact, the ratio value for 2023/24 would have been 44.5%, the lowest figure achieved by the Club for several years.
The ratio value for 2023/24 is below 50%, considered the threshold for excellence, and well below the 70% recommended as the maximum level by the European Club Association.
By continually growing revenues and constraining expenditure, the Club has kept the ratio below the levels recommended by the European Club Association throughout the last 20 years, even in those impacted by the Covid-19 pandemic.
Revenue growth, after accounting for the rise in operating expenses related to the said revenue increases and operating activity, as well as the rise in personnel costs as a direct result of sporting achievements, has led to an operating profit before disposal and depreciation (EBITDA before disposal) of 144 million euros. This figure is some 71% higher than the previous year (84 million euros) and equates to 13% of revenue - 3 percentage points better than the previous year (10%). This reflects the significant improvements in both revenue and operational efficiency achieved by the Club during this financial year.
Including the result of player transfers made in the 2023/24 season (13 million euros net of valuation adjustments), we obtain an operating profit before depreciation (EBITDA) of 156 million euros. This is a value similar to the 2022/23 financial year (158 million euros), which included a result of player transfers totally 73 million euros, some 60 million euros higher than in the current period.
The Club's operational efficiency, as well as its responsiveness in adopting management measures to overcome various challenges, are reflected in the fact the Club has achieved an average annual EBITDA of 175 million euros across the period from 2019/20 to 2023/24, despite the impact of the Covid-19 pandemic and the stadium renovation works. The after-tax profit is derived from EBITDA, after considering depreciation costs, financial results and corporate tax.
The Club closes out the 2023/24 financial year with after-tax profits of 16 million euros, 32% higher than the previous year (12 million euros). As such, the Club has continued its profitable trajectory year after year since the turn of the century. This all comes in an economic context of widespread and significant losses for the vast majority of major European clubs, accumulated from 2019/20 to 2022/23, losses which persist for many clubs in the 2023/24 financial year.
As a result of the profits obtained, the Club has been increasing its net asset values year on year, up to a total value of 574 million euros as of June 30, 2024.
Excluding the stadium renovation project, the debt-to-equity ratio as of June 30, 2024, sits at 0.0, reflecting a situation of absolute solvency and financial autonomy.
Excluding the stadium renovation project loan, the cash balance as of June 30, 2024, sits at 82 million euros, compared to a cash balance of 128 million euros as of June 30, 2023.
The cash flow generated from operations has been balanced with the payment requirements such as investments in player acquisitions and facilities (excluding the renovation project), as well as financial expenses. The lower cash levels are the result of repayments due on ICO loans (38 million euros) and the repayment of principal on the stadium renovation loan (15 million euros).
In addition to the cash balance of 82 million euros, the Club has undrawn credit facilities amounting to 395 million euros as of June 30, 2024. These financial resources comfortably allow the Club to meet its expected payment commitments.
The Club's Net Debt, excluding the stadium renovation project, stands at 8 million euros as of June 30, 2024.
Debt increased by 55 million euros during the 2023/24 financial year, due to investments made (267 million euros excluding the renovation project). Notable investments include some 239 million euros in players, and the initiation of the car park construction in Paseo de la Castellana, totalling 16 million euros.
A look at the historic evolution of net debt makes it clear that the Club has made an concerted, sustained effort to reduce debt since June 2009. This policy intensified following the outbreak of the Covid-19 pandemic in 2020, which saw the Club's net debt rise to 241 million euros. Taking this figure in comparison to the current 8 million euros, the Club has unquestionably succeeded in offsetting the nearly 400 million euros in lost revenue caused by the pandemic and its consequent impact on cash flow and increased net debt, by implementing saving measures and other business improvements.
The Debt/EBITDA ratio stands at 0.1, indicating a top quality credit rating for financial institutions. These figures highlight the Club's robust financial position and high solvency levels, having overcome the effects of the pandemic and operational limitations imposed by the stadium renovation.
Real Madrid's contribution to tax revenues and Social Security in the 2023/24 financial year amounted to 277.1 million euros.
In relation to the Santiago Bernabéu Stadium renovation project, following the expanded scope of the works not initially included in the project, the Club has continued to carry out the works during the 2023/24 financial year. Work has gradually been completed on various structural components of the project (facade, roof, retractable pitch). As of June 30, 2024, the closing date of the financial year, activities related to the development of business areas (VIP Area, Tour, RM Experience, events, restaurants, store) are still in progress and will be completed in the 2024/25 financial year.
The investment recorded in the 2023/24 financial year totalled 270 million euros, including capitalised financial costs during the construction period. This means the accumulated investment as of June 30, 2024, sits at 1.163 billion euros.
Regarding the loan, an additional 370 million euros were drawn in November 2023, bringing the total loan amount to 1.170 billion euros. Furthermore, having paid interest only during the previous three financial years, the 2023/24 saw a capital repayment of 15 million euros made, meaning the outstanding loan balance stands at 1.155 billion euros as of June 30, 2024.
Envisaged evolution
The primary aspect to be considered for the 2024/25 financial year is the completion of the stadium renovation works. During the 2023/24 financial year, the various structural components of the project (facade, roof, retractable pitch) have been completed, while certain activities related to the development of the business areas (VIP Area, Tour, RM Experience, events, restaurants, store) has progressed. The latter will be completed in the 2024/25 financial year, bringing the renovation project to a close. As a result, over the course of the next financial year, the amortisation of the investment will begin and financial expenses will no longer be capitalised.
The completion of the works will also have an impact on stadium-related revenues. Although this figure has already increased during the 2023/24 financial year, it will see further significant growth in the 2024/25 period once the stadium becomes fully operational across all business lines. Naturally, the increased revenue will bring with it the corresponding rise in operating costs.
As for commercial activity, the Club has significantly enhanced both merchandising and sponsorship activities during the 2023/24 financial year. The Club expects this commercial boost to continue and grow even stronger in the 2024/25 financial year, supported by the image-related benefits derived from both the composition of the playing squad and sporting success, as well as the renovated stadium.
On the pitch, the Club intends to continue strengthening and developing its sporting model, aimed at continued successes in both football and basketball. This has distinguished the Club throughout its history, and in recent years in particular. The most notable aspect in this regard is the signing of Kylian Mbappé by the football first team, starting from the 2024/25 season.
All of this must be underpinned by an economic model that pursues sustainable growth. This is where a combined effort towards revenue growth and diversification, alongside cost containment, results in profitability and a solvent financial structure which allows the Club to undertake the investments required to carry out its activities.