The Spanish giants have been subject to sustained criticism over the exorbitant transfer fee ever since they announced the long-anticipated signing of the Welsh wonder earlier this month.
Barcelona coach Tata Martino and star midfielder Xavi, Arsenal coach Arsene Wenger and Borussia Dortmund coach Jurgen Klopp are just a few personalities who have publicly lambasted Real Madrid for the transfer.
The most common argument is that spending €100 million (91 million if you believe Real Madrid) on a single football player is morally reprehensible at a time when Spain’s economy is floundering with millions out of work, while Real Madrid is itself heavily in debt.
But while spending nine figures on a player who has never won a trophy in his professional career may be a questionable decision, Real Madrid will argue that they are a private institution free to take financial risks as they please.
Let’s also not forget that the galaxy of stars at Real Madrid and Barcelona represent one of Spain’s most important tourist draws. This writer can attest to that fact, having traveled to Spain last year and shelled out a small fortune to watch Real Madrid play in their iconic Santiago Bernabeu stadium.
Real Madrid is at present the most valuable sports team in the world, recently valued by Forbes magazine at an eye-watering €2.5 billion. And they didn’t get there by throwing money around without a care.
While the club is an estimated €590 million in debt, that figure is deceptive as much of that debt is long-term and carefully managed. In other words, Real Madrid’s ability to consistently reap big returns on their investments helps keep their debt in check.
Indeed the club’s revenue-generating abilities are astonishing, with TV rights deals, sponsorships, gate receipts and merchandise sales contributing to a revenue of €517 million last year, making Real Madrid the only sports team in the world to generate an annual revenue over €450 million.
It is this awesome money-spinning capacity that allows Real Madrid to spend big while still being well within UEFA’s Financial Fair Play regulations, which seek to curtail reckless spending by clubs by using the threat of penalties such as competition bans on clubs that fail to adhere to regulations.
At the helm of Real Madrid is self-made construction magnate Florentino Perez, a man who may know little about football but certainly doesn’t have a reputation for conducting bad business.
Before splashing the money on Bale, Perez made sure to rake in big money through the sales of some of Real Madrid’s own stars.The departures of Argentine striker Gonzalo Higuain and German playmaker Mesut Ozil were controversial and unpopular, but brought 85 million euros into the club’s coffers.
These transfers, in addition to the sales of various fringe players, pushed Real Madrid’s income from player transfers over the €100 million mark this summer. Meanwhile, the sale of aging Brazilian star Kaka will save Real Madrid 10 million euros a year on his wage bill.
As UEFA boss Michel Platini pointed out, no one would have batted an eyelid if Real Madrid spent €100 million on three players. So why all the fuss if they chose to spend that much on one player? The decision, and the risk it carries, is theirs alone.
Ultimately, Real Madrid’s net expenditure (taking into account income and expenses) over the transfer window is around €45 million, with 5 players coming in. This represents fantastic business, considering the youthfulness and massive upside of its signings, led by Bale.
Moreover, Bale’s growing superstar status – he graces the cover of the U.K. and Middle East editions of the FIFA 2014 video game alongside Barcelona’s Leo Messi – means he will earn the club considerable revenue through merchandise sales, image rights, sponsorship deals and off-season tours to the key Asian and North American markets.
Many eyebrows were raised when Real Madrid paid Manchester United €80 million for Cristiano Ronaldo in 2009. But just a year later, Real Madrid announced that they had made back that sum and then some, on sales of jerseys and other merchandise bearing the Portugal captain’s name.
Bale is no Cristiano Ronaldo just yet. However he has certainly worked hard to forge his celebrity, transforming over the years from a scrawny, jug-eared kid to a marketable pin-up with the hulking frame of a boxer. He visited a plastic surgeon a few years ago to pin back those ears.
Bale may not ever become the sex symbol that was David Beckham, Real Madrid’s last British Galactico, but there is no doubt that he is a considerably more talented and well-rounded player.
While Beckham’s stint at Real Madrid was respectable, it only yielded one league title in four seasons. Much more will be asked of Bale, who will be expected to help Real Madrid win its elusive 10th European Cup.
But while Bale’s talent is beyond question, it remains to be seen how he will fit into Real Madrid’s tactical setup.
There is much excitement surrounding the prospect of Bale and Cristiano Ronaldo lining up on opposite flanks, but the two players are hugely similar in their attributes, raising question marks about whether Bale’s signing will make Real Madrid one-dimensional.
Both Ronaldo and Bale are players that need space to perform and like to build up a head of steam while attacking, whether the final intent is to shoot, pass or dribble. Neither player is particularly adept in crowded situations
Bale has stated several times that he has consciously modeled his game and development on that of the Portuguese star. But in doing so, he may have picked up some of Ronaldo’s (admittedly few) flaws.
Teams will quickly learn that the best way to frustrate Real Madrid will be to sit back, crowd the defensive area with players and deny Ronaldo and Bale the running space they need to build up momentum and lay siege to goal.
While this is unlikely to be too much of an issue in the Champions League – where the big teams like to take their game to their opponents thereby leaving space at the back – it may hamper Real Madrid in their domestic league when they come up against minnows who are happy to sit back, defend in numbers and play for a draw.
And in the two-horse race that is La Liga, a handful of dropped points can be the difference between winning the title or seeing your arch-nemesis win it.
Therefore the big question appears to be not whether Real Madrid’s outlay on Bale was somehow unethical, but whether it was a smart move.
Bale’s growing pin-up status, likeable personality and the inherent charm of a Cardiff boy wearing the no. 11 shirt for Real Madrid will mean nothing if he doesn’t deliver the goods on the pitch, particularly in the Champions League.
In the event of failure, Bale won’t have the security of past glories to sustain his image as Kaka did. Bale’s face will not adorn billboards in New York and Tokyo if he is a grand flop in Madrid. There will be no more Esquire cover shoots, only cover stories in Marca and AS lamenting €100 million wasted on an over-hyped player.
But if the big-eared boy from Cardiff helps deliver the big-eared trophy to Real Madrid, the pay-off will be enormous.
Ultimately, it all comes down to the football