Sunday, June 21, 2009

Credit Crunch? Not In Madrid

Something happens when Florentino Pérez is in charge of Real Madrid that means that most of what is written about the club is only incidentally about football. As Pérez assembles his latest random collection of galacticos, the press is full of reports on the commercial benefits of having players like Kaka and Cristiano Ronaldo. Florentino himself seems confident that these expensive purchases are going to pay for themselves. He'd better be right because otherwise the club he runs is eventually going to have its own financial crisis. Pérez himself got elected as Madrid president without any rival candidacies, apart from one disastrous venture that lasted 24 hours. Interestingly, for a club that is supposed to be owned by its members, any candidate intending to stand was required to deposit 55 million euros to be able to stand for election. Now that's what I call an open contest.

This time around there is no massive property deal to fund the new signings, and it appears that most of the cash is coming from fresh loans from the banks. Caja Madrid, said to be one of the Spanish cajas facing problems because of its involvement in the construction industry has nevertheless managed to loan Pérez 75 million euros. This is surprising at a time when most individuals or small businesses looking for loans are finding them hard to obtain. Even more surprising was the revelation that the loan is interest free for the first two years. Caja Madrid justified the generous deal by saying that they loan money to those they know will pay it back. An odd statement when you consider that Real Madrid is already estimated to owe 4-500 million euros and we have businessmen climbing up cranes in Madrid to protest that the club doesn't pay them. Never mind, the rest of the customers will pay for it.

Looking at the team itself, so far it is not all going as Perez wants, despite the capture of Kaka and Ronaldo. It is said that Manuel Pellegrini was not his first choice as coach for the team, and although I think Pellegrini did great things at Villareal I don't see Madrid as being his kind of team; especially as Perez will be calling the shots on team selection, mostly motivated by the shirt sales of each player. The signing of David Villa from Valencia has stalled, despite the reported eagerness of Villa to go to Madrid. Valencia are in a desperate financial situation, provoked by their own attempts to ride the construction bubble. They need to sell players and their problem is that everyone knows it, so whilst they prefer a bidding war between Chelsea, Manchester (*2) and Madrid for Villa, Perez is trying to use the preference of the player to force down the price. It will be interesting to see how the survivors from last year's Madrid team will react to the new arrivals, especially with Ronaldo set to earn almost twice the salary of captain and club icon Raul. Not that Raul is having problems paying the rent.

Elsewhere, 70000 people took to the streets of Sevilla last week in a huge protest. Perhaps they were marching to demand action on unemployment and the economic crisis? No, instead the protestors were supporters of Real Betis marching to demand the departure of Manuel Ruiz de Lopera, the businessman who is the main shareholder in the club. The club was relegated to the second division at the end of last season and the fans are furious at Lopera. This, however, is the same Lopera who a few years ago the same fans would call "Don Manuel" and acclaim as a hero. Presumably if they get promoted again next season all will change again? Much as I like football as a sport, there are times when you wonder whether it is worth it.

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