Unperturbed by the forage of criticism Real’s record-breaking transfers have received, the club’s president Florentino Perez justified his spending extravaganza this summer, by saying that “signing great players is always a good investment”. Perez was also quick to remind his critics of his previous signing success when he managed to double the football team’s income between 2000 and 2006 by signing players like David Beckham, Luis Figo and Zinedine Zidane.

Whilst signing superstar players may be the key to Real Madrid’s success, the means of how they generate the cash remains slightly more ambiguous. According to press reports released earlier this summer, two of the largest Spanish banks, Caja Madrid and Banco Santander, have both given the football club loans of €75 million. The same reports claimed that Perez backed up the loans by maintaining that the club anticipates to net €600 million over the next five years from MediaPro, the company which has bought Real’s television rights.

Both banks came under acute criticism for providing the football team with such a large amount of money at a time of financial hardship and when many Spanish companies are failing to have their credit extended. Feeling under pressure to defend his bank’s actions, Miguel Blesa, president of Caja Madrid said that Real Madrid had provided him with a “more than sufficient” guarantee about paying back the loan.

“We will continue to give credit to anyone who asks us for it and gives us guarantees about how they will pay us back,” Blesa was quoted in Earthtimes.org.

As well as receiving more money from MediaPro for television rights, Real have increased the cost of tickets by approximately 20%. Given that Real Madrid have the third largest average attendance record in Europe, a substantial rise in ticket prices will inevitably net the club millions. Merchandise sales are expected to rocket by the new “superstar” players such as Ronaldo and Kaka. Diario AS, Madrid’s daily sports newspaper, recently reported that Real are anticipating to sell over one million replica Ronaldo shirts and more than half a million Kaka shirts by Christmas.

The other, and perhaps less obvious, advantage Real Madrid has over its European rivals is tax. Whilst tax in Spain remains an ambiguous minefield, in the realms of Spanish football, it works to a club’s advantage. Foreign players only pay 23% tax for the first five years that they are in Spain. Compared to countries like England, where foreign players pay 50% tax, the difference is phenomenal and another reason why Real can afford to pay their players top whack.

Another unseen reason behind Real Madrid’s economic dominance is that unlike most other football teams in Europe, Real are essentially a non-profit social trust. As the Bleacher Report points out, because of Real’s status, they are not obliged to “fork out” 30 million pounds each year just to service their debt. Without having to generate this lump sum each year, Real Madrid are on a winning streak financially before the first match of the season has even kicked off.

Whilst Spain may have experienced some radical economic changes within the last few decades, namely a severe growth in the economy spurred by a dramatic property boom in the 1990s and early 2000s, the country is still far from being considered rich and presently are struggling to recover from the affects of the recession. As well as unemployment being at nearly 18%, a recent study published by the Spanish Treasury revealed that 18.3 % of Spaniards earn less than 1,100 euros a month.

With these statistics it is little surprise that Real Madrid have come under intense criticism for their wayward spending sprees and the obscene salaries promised to their new superstar players. The Spanish prime minister himself (a self-proclaimed Barcelona fan) admitted to finding Perez’s timing as “distasteful”.

Like in many walks of life in Spain, the Spanish often play a different set of rules, and in football these unusual rules seem to be paying off. Because Real Madrid maintain social and political agendas that deviate from their European competitors, their economic significance buries rivals and it is little wonder the club has triumphed in Europe nine times and the likes of Cristiano Ronaldo, Karim Benzema and Kaka continue to congregate at Bernabéu.

Gabrielle Pickard for RT

Read also How Football Players Invest Their Millions