Is Real Madrid’s €100 million Gareth Bale deal a financial folly?

Gareth Bale will have to learn to co-exist with a superstar even bigger than him, Cristiano Ronaldo

At the helm of Real Madrid is self-made construction magnate Florentino Perez, a man who may know little about football but certainly doesn’t have a reputation for conducting bad business.

Before splashing the money on Bale, Perez made sure to rake in big money through the sales of some of Real Madrid’s own stars.The departures of Argentine striker Gonzalo Higuain and German playmaker Mesut Ozil were controversial and unpopular, but brought 85 million euros into the club’s coffers.

These transfers, in addition to the sales of various fringe players, pushed Real Madrid’s income from player transfers over the €100 million mark this summer. Meanwhile, the sale of aging Brazilian star Kaka will save Real Madrid 10 million euros a year on his wage bill.

As UEFA boss Michel Platini pointed out, no one would have batted an eyelid if Real Madrid spent €100 million on three players. So why all the fuss if they chose to spend that much on one player? The decision, and the risk it carries, is theirs alone.

Ultimately, Real Madrid’s net expenditure (taking into account income and expenses) over the transfer window is around €45 million, with 5 players coming in. This represents fantastic business, considering the youthfulness and massive upside of its signings, led by Bale.

Moreover, Bale’s growing superstar status – he graces the cover of the U.K. and Middle East editions of the FIFA 2014 video game alongside Barcelona’s Leo Messi – means he will earn the club considerable revenue through merchandise sales, image rights, sponsorship deals and off-season tours to the key Asian and North American markets.

Many eyebrows were raised when Real Madrid paid Manchester United €80 million for Cristiano Ronaldo in 2009. But just a year later, Real Madrid announced that they had made back that sum and then some, on sales of jerseys and other merchandise bearing the Portugal captain’s name.

Bale is no Cristiano Ronaldo just yet. However he has certainly worked hard to forge his celebrity, transforming over the years from a scrawny, jug-eared kid to a marketable pin-up with the hulking frame of a boxer. He visited a plastic surgeon a few years ago to pin back those ears.

Bale may not ever become the sex symbol that was David Beckham, Real Madrid’s last British Galactico, but there is no doubt that he is a considerably more talented and well-rounded player.

While Beckham’s stint at Real Madrid was respectable, it only yielded one league title in four seasons. Much more will be asked of Bale, who will be expected to help Real Madrid win its elusive 10^th European Cup.