After two solid years of courting by Spanish giant Real Madrid, Manchester United finally agreed to part with scoring winger Cristiano Ronaldo. All it took was a record $131M USD transfer fee agreement!
Real Madrid's pricey acquisition follows on the heels of the $94M USD they gave to AC Milan to pry Brazilian midfielder Kaka away.
All told Real Madrid just spent nearly a quarter of a billion dollars in a week to acquire two players. That total was just to acquire those two players, in addition they'll still have to pay their salaries.
So who's responsible behind Real Madrid's loose purse strings? That would be Florentino Perez, the newly appointed president of the club. If the name sounds familiar he previously served as president of the club during the Los Galácticos era. That era resulted in Real Madrid buying Zinedine Zidane, Ronaldo (the Brazilian one), Michael Owen, Figo and most famously David Beckham.
So how do they have this seemingly limitless budget. According to a report in the Times Online, Real will recoup their huge transfer spending through a combination of a TV rights contract, advantageous tax legislation in Spain, which theoretically allows them to pay their players a lower base salary and the rich coffers of Florentino Perez and the board of directors.
In addition, their domestic television rights contract generates some £135 million a season: more than twice what Manchester United earn. And they are very good at exploiting tax legislation — originally intended to attract multinational corporations and their executives to Spain — which allows their foreign players to pay tax at around 23 per cent for the first five years that they are in the country.
What this means is that, if Cristiano Ronaldo wants to earn, say, £8 million after tax, it would cost the club just over £10 million a year. If United were to offer him the same deal, it would cost them about £16 million a season (thanks to Gordon Brown’s new 50p tax rate). Over the course of a five-year contract, that is a difference of about £30 million. Source: Times Online
Real Madrid's pricey acquisition follows on the heels of the $94M USD they gave to AC Milan to pry Brazilian midfielder Kaka away.
All told Real Madrid just spent nearly a quarter of a billion dollars in a week to acquire two players. That total was just to acquire those two players, in addition they'll still have to pay their salaries.
So who's responsible behind Real Madrid's loose purse strings? That would be Florentino Perez, the newly appointed president of the club. If the name sounds familiar he previously served as president of the club during the Los Galácticos era. That era resulted in Real Madrid buying Zinedine Zidane, Ronaldo (the Brazilian one), Michael Owen, Figo and most famously David Beckham.
So how do they have this seemingly limitless budget. According to a report in the Times Online, Real will recoup their huge transfer spending through a combination of a TV rights contract, advantageous tax legislation in Spain, which theoretically allows them to pay their players a lower base salary and the rich coffers of Florentino Perez and the board of directors.
In addition, their domestic television rights contract generates some £135 million a season: more than twice what Manchester United earn. And they are very good at exploiting tax legislation — originally intended to attract multinational corporations and their executives to Spain — which allows their foreign players to pay tax at around 23 per cent for the first five years that they are in the country.
What this means is that, if Cristiano Ronaldo wants to earn, say, £8 million after tax, it would cost the club just over £10 million a year. If United were to offer him the same deal, it would cost them about £16 million a season (thanks to Gordon Brown’s new 50p tax rate). Over the course of a five-year contract, that is a difference of about £30 million. Source: Times Online
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