Bale’s £85.3m transfer could spell trouble for us all

explains why “you ought to be sickened, appalled and downright disgusted” at Real Madrid’s recent transfer business

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If you’re a keen football supporter or even if you deplore the game, it’s likely you’re aware of this inordinate transfer saga which has consumed our televisions and newspapers over these past few months. It’s likely too that you’re glad to see it end; you’ll be pleased for our British boy wonder (Welsh when he couldn’t make the Spurs side, remember) who’s finally completed his dream move and perhaps you’re even wishing Gareth Bale luck now he’s a Real Madrid player. Well, you shouldn’t be. You ought to be sickened, appalled and downright disgusted at this gross show of corporate greed and club vanity, such that perfectly displays just how centred around money the game is fast becoming.

85 million pounds for a human being is disgraceful. Of course the capitalist argument holds through here, but when you consider the poverty, anguish and trials of the world and compare it to something as unimportant as football, something seems seriously wrong. To put the fee into perspective; Children in Need failed to raise even a third of this amount in 2012 and you could add up the total funding Cancer Research receives each year for cancers of the breast; prostate, brain, bladder and lung and still come up short. With this unprecedented fee, it would be possible to fund the building of nearly 10,000 schools in the world’s poorest nations or to provide safe, clean drinking water for over 8 million people. It could even do something to help fund space exploration or considerably improve research into renewable energy sources and make the world something of a better place. Conversely, you could watch Gareth Bale kicking a leather ball around.

To convey just how significant this transfer could be from an economic perspective, let’s rewind to 2009 when Cristiano Ronaldo transferred to Madrid for £80m from Manchester United. To soften the blow of losing their greatest ever player, United demanded an upfront sum, with the rest to be paid in instalments. Now even football clubs don’t have bank accounts full of tens of millions of pounds and to enable the transfer to go through, the defunct Spanish bank Caja Madrid needed to loan Real £65m. At the time, this was considered normal practise and it didn’t even make the headlines. Later that year however, coinciding with the Spanish speculative housing bubble bursting, Caja Madrid nearly collapsed, falling weaker and weaker over the next two years before merging with six other banks into Bankia in June 2011. In the midst of this debacle, the Spanish government attempted to bail out Caja Madrid before falling into dire straits itself. It took a well-publicised Eurozone bailout to finally do something to improve the Spanish economic conditions. This is not to suggest of course that the Eurozone crisis is indirectly the fault of Real Madrid, but the £65m borrowed by the club is not an insignificant amount of money by any means. It certainly compounded the misery for the Spanish economy and its citizens.

As a member of the European Union, Britain (and therefore British taxpayers) was among those funding the Eurozone bailout, action which undoubtedly deepened our own recession of 2009. When you then learn therefore that the Spanish collapse was partly brought about by something as trivial as a football transfer, it starts to put things into perspective. People are starving, losing their jobs and being made homeless as a result of this on-going crisis as has been well publicised since the recession began. Then, to think that the same football club would not only attempt, but complete another world breaking transfer as little as four years later really does make one question the morality and sensibility of football. It’s not as if the problems have simply gone away in Spain either; Spanish GDP has contracted for the past seven quarters, unemployment in the country is nearing 17m and the national debt stands at €631,000,000,000 as of September 2013. A sport which proclaims itself ‘the beautiful game’ and ‘the sport of the working class’ ought to seriously revaluate its priorities.

Of course, it would be ludicrous to pin all the blame for the Spanish and European economic collapse on Real Madrid Football Club – the majority fault is undoubtedly with the bank and not with the club. It should be highlighted however that the club ought to be more responsible with its transfers considering the current state of the world economy. The banks have proven themselves fallible, and to then further borrow an extortionate amount of money so soon after a continental economic crisis is wholly irresponsible of Madrid. This is not to suggest of course that the transfer of Gareth Bale will bring about a second Spanish crash or even another European crisis, but when combined with the signings of Illarramendi, (£34.3m) Isco, (£26.4m) and Carvajal, (£6m) and the fact that the Spanish banking industry is so fragile that it rivals Greece’s, who is to say what effect it could have on the Spanish economy? More importantly, being EU members ourselves, who is to say what effect it could have on Britain and the British taxpayer?

8 comments

  1. Really tenuous link between a football transfer and the Spanish banking collapse, really not sure it deserves to be highlighted. 65m is absolutely nothing with the billions upon billions they were dealing with.

    Ral Madrid have spent a lot, but the revenue they pick up from shirt sales, tv, sponsorship, tickets etc is huge. They have the most revenue in the world, so therefore can afford to pay the most money for the best players. They also sold ozil and kaka so their net spend really isnt that much.

    There may be too much money in football, but as you admitted, it makes sense for those to spend the money. You could say there’s too much money in almost any industry, not only in sports. This is a free market economy and money will flow into things which will produce the most money.

    I really don’t think we have anything to worry about.

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  2. I agree that morally it would be better this money was spent on relieving poverty and disease etc, but why blame football clubs? They can only spend this amount if people voluntarily give their money to them to buy merchandise and watch matches, either live or on TV.

    If you don’t like the amount of money involved, you should encourage individual fans to stop handing their money over.

    For some perspective, the UK alone spends around £40bn each year on alcohol. Revenue of Premier League clubs is around £2.5bn.

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  3. 15 Sep ’13 at 2:01 pm

    StopTheNonsense

    Another poor article on this subject. People need to get stop spouting all this moral nonsense and stop their inner communistic/socialist/leftist opinions distort the facts which are as follows:

    “Real Madrid, which posted revenue of $650 million during the 2011-12 season, is worth $3.3 billion, more than any team in the world. Los Merengues generated operating income (earnings before interest, taxes, depreciation and amortization and player trading) of $134 million, more than any soccer team and second only to the NFL’s Dallas Cowboys ($227 million) among all sports teams. ” – Forbes

    To suggest they are not allowed to make an investment with their own money because people are starving or poor, or there is a banking crisis is utterly ridiculous. They are a very stable business with very little risk of a) collapsing or b) being unable to repay their loans. As a Real Madrid fan I am not overly happy they spent so much on Bale when I think they could have spent that money better on other players, but that’s a completely different story. No business should be just expected to spend its money/profit on charity/poverty/cancer as you suggest. If you don’t like the free market and capitalism, feel free to move to China.

    The net effect of this move, no implications at all for the banking system, if anything, the money which has been loaned will be recieved in full with likely favourable interest payments so if anything this will boost the banking system. The crisis was due to creditors losing lots of the money they lent, particularly in the mortgage market, etc. not due to large transactions of money to debtors who were perfectly able to repay the money in full with interest.

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  4. 16 Sep ’13 at 1:17 pm

    Anonymous student

    @StopTheNonesense: This clearly isn’t suggesting that RM should spend their money on solving world poverty neither is it directly saying that RM will cause another collapse, “This is not to suggest of course that the transfer of Gareth Bale will bring about a second Spanish crash.” It’s just another perspective on the transfer; one which reads well and is from a point of view not often considered in mainstream media. I thought it was good.

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  5. 17 Sep ’13 at 12:37 am

    StopTheNonsense

    @Anonymous student

    This why quotes are often bad, as you have taken them out of context…for example the first quote then continues…. “… or even another European crisis, but when combined with the signings of Illarramendi, (£34.3m) Isco, (£26.4m) and Carvajal, (£6m) and the fact that the Spanish banking industry is so fragile that it rivals Greece’s, who is to say what effect it could have on the Spanish economy? More importantly, being EU members ourselves, who is to say what effect it could have on Britain and the British taxpayer?”

    Ok, I give you it does not directly say RM should use its money to solve those issues but it alludes to the fact and criticises them for spending so much money on a “human being” when there is problem x,y,z…

    Explain to me this, what is the point of this article, if its sole purpose as your comment seems to describe is it’s mentioning the spanish banking crisis, but not saying this could cause one, its mentioning what the money would be better spent on but it is not telling how RM spends its money. It’s speculation whilst saying it’s not speculating. Imagine if everytime a company spent 100 million someone came out and said, oh spending so much money when there is all these problems in the world…it would get old pretty quickly.

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  6. 17 Sep ’13 at 12:25 pm

    Anonymous student

    @ StopTheNonesense

    Overall, I thin that it’s a criticism on the fees football players command. It doesn’t say they should use their money to solve these problems, or even criticize them for not doing so: it’s referencing cancer/CiN/poor people to “Put this into perspective.”

    It then highlights a possible link between Ronaldo’s transfer and the collapse of the bank *which admittedly is fairly tenuous* and then speculates whether Bale’s greater transfer could further affect the now worse Spanish economy.

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  7. 20 Sep ’13 at 3:11 am

    world of warcraft

    supply and demand u plonker

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  8. I am sick of this “Bale”

    Even in Spain he remains all over the nouews

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