Real Madrid needn’t reduce players’ salary, Smaller clubs can survive?

Strong financial support helps Real Madrid clubs stand firm against Covid-19.

A minor impact on the wealth of Premier League – Real Madrid

The Covid-19 crisis had a minor impact on the wealth of Premier League wealthy clubs, but smaller clubs across the UK were struggling after no revenue from the days of the match, while wages and invoices are still payable. This is also the general situation for many teams in Europe, such as at major tournaments.

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Real Madrid salary fund of the second-highest in the world, just behind Barca. While Covid-19 caused Barca stars to reduce their salaries by 70%, the same thing did not happen at Real. According to Deportes Cuatro, Real Madrid has no intention of asking members of the team to reduce their salary.

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Marca said on March 30 that the Real Madrid money remaining in the budget was US $ 171 million, according to a report on June 30, 2019 – the last time Real Madrid had made a financial disclosure. The amount may be reduced due to Covid-19, but it is considered sufficient for the Royal team to cover the pandemic.

Real Madrid did well under President Perez.
Real Madrid did well under President Perez.

Real Madrid money used to pay players, coaching staff and staff this season is 472.7 million, only about 50% of the team’s operating budget. This is also the recommended ratio to maintain the team in unusual circumstances like Covid-19.

In 11 years under President Florentino Perez, Real Madrid earned $ 352 million, thanks in part to a smart transfer policy. They are not afraid to pay boldly to bring about the names that bring great profits on and off the pitch, such as Cristiano Ronaldo, who joined Real Madrid in the period 2009-2018.

On the other hand, the team is also careful about bringing back stars that are too high or vulnerable. Marca thinks that is why Real Madrid refused to sign with Paul Pogba or Kylian Mbappe. The Royal team is aiming for young talent Erling Haaland in the upcoming transfer period.

Covid-19 made many big teams in Europe tumble. While Lionel Messi was cut by 70% of his salary at Barca, Cristiano Ronaldo also accepted a four-month salary cut at Juventus.

Can small clubs survive? – Real Madrid

1. Spain

Hercules has felt the financial impact caused by Covid-19 in Spanish football. Currently playing in the third division, this famous club temporarily fired the entire team on Tuesday.

Players are notified via email without consultation, phone call or meeting. Founded in 1922, Hercules has had 20 seasons in La Liga, won the second-tier championship 3 times. Still has a stadium with 28,000 seats, the team owner thinks that is the only way to keep the club alive when ticket prices drop to zero just 2 months before the end of the season.

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It is known that the Spanish Labor Law allows companies to fire employees for a period of time in special cases but force them to hire those fired people when the difficult situation ends. Of course, a portion of the player’s income is still paid for by the club and the government but admittedly, with a salary of 1,000 to 3,000 euros a week before, they have encountered many difficulties, now it is no longer possible.

It was a 3rd place tournament, while in 2nd place, Las Palmas also considered applying for government grants before rejecting the idea. According to Las Palmas president Miguel Angel Ramirez, they now ensure that employees will continue to receive full wages until June 30.

The worry is that in the lower grades, the TV contract won’t make sense if the season can’t be over and the players are also worried about their own contracts. Most contracts are short-term and they will have little chance of being extended this summer if the teams run short of budget.

Hercules is one of the lower-ranked clubs in European countries heavily affected by Covid-19
Hercules is one of the lower-ranked clubs in European countries heavily affected by Covid-19

2. Italy

The Covid-19 pandemic had a strong impact not only in Serie A but also in Serie B and all lower leagues across the country. Because Serie B does not have the same revenue as the clubs in Serie A, the postponement of the tournament may lead to the suspension of many teams that need sponsors, tickets and television rights to survive.

In the immediate future, Serie B offers some suggestions on how to solve the tournament and they are making fans feel confused. Accordingly, Serie B allows 6 teams from Serie C to promote in 3 ways, in which priority is given to the 3 best second teams. It should be added that Serie B has one-time owners of Serie A such as Luigi De Laurentiis own Bari, the team is ranked 2nd in Group C of Serie B or Silvio Berlusconi, owner of Monza.

3. Germany

When the Covid-19 crisis began to intensify, many clubs in Germany had to tighten their belts to make up for lost game and television rights. However, the teams in the lower leagues were hardest hit.

In a country where few footballers are backed by billionaire investors, symbols like Werder Bremen and Schalke have every reason to worry about their future. Even Bayern and Dortmund both ask the players to reduce wages.

However, at the lower end it is not an option, when the salary is very low and the turnover of the match days is more important than all. With the third division postponed until the end of April, the German Football Federation (DFB) initially thought that they could provide financial support for small clubs. However, two weeks have passed, and the lower-ranked teams believe that the DFB cannot save them.

The current situation has forced many teams to bring players and other staff into the German “short-term” program. The program is designed to avoid mass layoffs, allowing employers to impose reduced hours, partly compensating the state’s wages. If the state cannot save them, the teams have to wait for favors from the big Bundesliga.

Anyway, up to now, Bayern Munich, Dortmund, Leipzig and Leverkusen have donated 20 million euros to help small clubs in the first two ranks that have not yet ranked third.

4. France

It is predicted that a series of teams, including Ligue 1, will go bankrupt if the 2019-20 season is not completed. No television money, ticket money, match days and sponsorships are impacting many teams. “We have to end the season, even if we have to play in July and August,” said Saint-Etienne president Bernard Caiazzo.

According to Caiazzo, French teams will lose around 500 million euros if the last 10 rounds of the season are not played. In fact, even Nasser Al-Khelaifi’s PSG had to make a proposal to reduce all players’ wages during this crisis.
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