Real Madrid and Barcelona economic impact

This week happens “El Clasico”, as the Real Madrid vs. Barcelona showdown is known. From Sports Value’s analysis, the clashes between the two giants of Spanish football undoubtedly represent the biggest economic impact of world football.

Although the Spanish market is not the richest and most developed in Europe, in terms of revenues Real and Barça lead among all teams on the planet, including the NFL, MLB and NBA franchises.

Both brands have already transcended their home country and today produce impacts on a planetary scale. In addition to the high revenues, both are highly efficient in their global communication. Real and Barça already have over 250 million fans on different social networks.

Real and Barça to Spain’s GDP

A very interesting analysis to understand how impressive the growth of Real and Barça is the analysis concerning the evolution of the two teams revenues, in relation to Spain’s GDP. Currently the joint revenue of the pair represents 0.12% of Spanish GDP.

At Present for every 1.000 euros produced in the Spanish economy, 1,20 euros come from both clubs. Ten years ago, this figure was 0,80 euros and in 2003 only 0,40 euros. The index has tripled since the early 2000s.

This index created by Sports Value only considers operating revenues from stadiums, TV rights and marketing. The two clubs revenues were very boosted in recent years and together the clubs reached 1.6 billion euros in 2019.

The accumulated inflation in Spain in the period was 35%.

The most striking points is the strength of their brands are the negotiating of millionaire sponsor contracts, huge product sales, high value TV deals and elevated capacity to generate revenue from their stadiums.

Consolidate revenue Real Madrid and Barcelona X Spain’s GDP- Million euros

Source: Sports Value

Revenue evolution Real Madrid and Barcelona – Million euros

If players´ transfers revenues were considered in the analysis, the two clubs’ economic impact on the Spanish economy would be 0.14%, or more than 1.8 billion euros in 2019.

Real Madrid

The Madrid team is traditionally the highest-earning sports team in the world. It ended the 2018-19 season with record operating revenues of 757 million euros, compared to 751 million euros from the previous season.

It currently only makes less money than its Barcelona rival.

Its main source of revenue is marketing resources that already exceed the 340 million euros per year.

The growth of the Real was impressive. In 2003 it had a turnover of 193 million euros, five years later it was already over 351 million euros and after a decade it generated 514 million euros. In recent years growth has been steady and has since 2018 exceeded the barrier of 700 million euros in revenue.

Real Madrid revenues – Million euros

The Merengue club has managed to create a virtuous cycle in its management around it, where even with heavy investment in players acquisition and high salaries. However has maintained budgetary control, including expanding its financial strength.

Real’s wages expenditures in 2019 exceeded 355 million euros, or 47% of its operating revenues.

The club’s highest salary level was in 2017, when salaries totaled 377 million euros or 56% of revenues.

Football Wages – Real Madrid – Million euros.

In the last decade Real Madrid has invested 911 million euros in hiring players.

 Investment in Players Acquisition – Real Madrid – Million euros

Even with heavy investment and high wage spending, Real closes every year with net profits.

In the last decade it has accumulated more than 347 million euros in net profits, which contributed to the financial and sports strengthening of the club from Madrid.

Barcelona

The Catalan club surpassed its rival in revenues and in 2019 leads the ranking among all sports teams in the world.

Barça ended the 2018-19 season with a very high level of operating revenues, a total of 837 million euros, compared to 690 million euros from the previous season. The club has seen revenues grow 21% this past year.

Its main source of revenue is also marketing resources that exceeded 360 million euros annually.

The culés grew even more than Madrid’s rival. In 2003 they made 123 million euros. Five years later it was over 290 million euros and after a decade it reached 483 million euros. In recent years the growth has been very strong and has culminated in this revenue of over 800 million euros in 2019.

Revenue Barcelona- Million euros

When Barça includes players revenues, the turnover in 2019 was 990 million euros,

The blaugrana club managed to create around itself the same Real Madrid process, this virtuous cycle in its management. Where even with investments in hiring and high wages, the budget balance is maintained.

Barça’s wages expenditures in 2019 were 426 million euros, or 51% of its operating revenues.

Football wages- Barcelona – Million euros.

In the last decade Barcelona has invested 868 million euros in players acquisition

Investment in Players Acquisition – Barcelona – Million euros

The Catalan club have been closing their seasons with profits, but the situation is far more complicated than Real Madrid’s. Barça has high costs and this season ended the year with only 4.5 million in net profits, pressured by high expenses, even with so many new revenues.

In the last decade it has accumulated more than 113 million euros in net profits, far less than its rival.