What can we expect from the rest of Real Madrid’s transfer window?

Real Madrid has gotten the transfer season off to an incredible start, signing world superstar Eden Hazard and excellent young players in Ferland Mendy, Luka Jovic, Rodrygo Goes and Eder Militao. The great Zinedine Zidane has remade the composition of this club in demonstrative sweeping action with the help of Florentino Perez. Are there more Galacticos to come this summer? Well, that depends…

I absolutely love Real Madrid’s transfer work so far this summer. Not every position has been filled by my first choice of player and some of the fees paid have been a little high in my estimation but the assertive way that the club has attacked their business and filled holes in the squad is exactly what we expect by the world’s greatest club. Of the new signings, Hazard will be the immediate star, but it is all the other names that have the potential to still be starting at this club in a decade. Those hoping for a massive Galactico to complete the summer, though, may be disappointed.

As many Madridistas are aware, Marca reported that UEFA’s Financial Fair Play rules require a club to not have a net spend of more than €100m in a single year. I had trouble finding other sources for this information so I went to UEFA itself and read the Financial Fair Play rules. If you are interested, you can find the relevant rule on page 42 of this document titled ‘indicator 6’. Here’s what it says:

"Indicator 6: Player transfer balanceThe licensee reports a player transfer deficit greater than EUR 100 millionin any player registration period that ends during the licence season.In this connection, the player transfer balance in respect of a registrationperiod is calculated as the net of: the aggregate costs of acquiring each player’s registration in respectof all new and existing player registrations, being all such costs paidand/or payable, and the aggregate proceeds of transferring-out a player’s registration,being all such proceeds received and/or receivable (net of any directcosts of disposal).If the aggregate of the costs incurred exceeds the aggregate of theproceeds generated in a registration period, then the club has a playertransfer deficit."

Weeding through the UEFA phraseology, Marca is correct, so here is what that means for Real Madrid. Using numbers from Transfermarkt, Real Madrid have already spent €304m this summer, with their reported sale number on Marcos Llorente (our only outgoing) being about €30m. Assuming these numbers are in the right ballpark, we are talking about needing well over  €250m in sales (even assuming the Llorente fee is closer to €40m) just to be in FFP compliance.

Given the fact that Gareth Bale seems to have no interest in agreeing to leave, and the most productive James Rodriguez rumours are about a loan to buy, this is not a comforting proposition. Los Blancos have never been ones to flaunt UEFA’s rules and I do not think they will start now, so names like Isco, Kovacic, Navas, Ceballos, and Vallejo are all probably finding their way out the door. The trouble is, even if we sell all of those players for 10% above their Transfermarkt listed values, we are still only hovering around €200m in outgoings including Llorente. Clearly under this framework, links to the likes of Neymar, Pogba, Mbappe, Eriksen or De Ligt are just not reasonable at this time.

The timing of these rules punishes Real Madrid for their past frugality. Our net spend was only about €30m last summer, and we had negative net spends both seasons before that. Under the old FFP rules we would have basically unlimited spending given our revenues and that three year trend. But what is done is done, and we still have plenty of resources to compete for titles next season.

Most of the transfer rumours we see on the internet are garbage. Everyone knows that. Because of this FFP clarity, we can be even more confident in our understanding of which rumours are reasonable and which are not. Los Blancos may well make more signings this summer, but they will not do so in any way that will make them unable to match FFP regulations with their outgoings.

I am very frustrated by this rule. Real Madrid can spend in excess of €100m without exceeding the other financial fair play rules involving acceptable losses as compared to revenue and have plenty of room in their play wages compared to revenues. We are an incredibly well run club financially and have a cap put on us as to how we can use the rewards from that. However, over the long term this rule exists because clubs like Manchester City and Paris St. Germain are state owned and would just spend net excess of €100m every summer if it were banned. We are paying the price for other clubs being unsavory.

So put your order for a custom Pogba kit on hold, and brace yourself for a huge wave of sales. The fun part of the summer is most likely over.