An investigation published by The Telegraph newspaper casts doubt on Real Madrid's financial accounts and compliance with financial fair play. The English newspaper points out that 122 million from the "other current management expenses" item, present in the club's last annual report, are not justified. This amount represented 20% of the club's costs in the 2021-22 season.
The British newspaper, which has not received a response from the Spanish club on this matter, associates these expenses with the agreement between the entity chaired by Florentino Pérez and the Providence company, which implies the transfer of a percentage of sponsorship income to the American fund. The American investment company has been providing liquidity to Madrid, also through loans, since 2017 and at least until 2027.
The Telegraph ensures that the sums of money obtained thanks to the agreement with Providence were recorded in the accounts as income instead of debt, which directly concerns the interpretation of financial fair play. The Spanish tax authorities consider this type of payment to any entity for a part of future income as a financing operation, which for tax purposes is considered debt, according to the newspaper.
The British publication has not found an explanation either in LaLiga or in UEFA, since both entities have declined to comment. The "other current management expenses" section amounts to 135.8 million, of which Real Madrid only explained to the newspaper the origin of 13.6 million, paid to LaLiga as part of the central costs that all clubs must assume.
In the annual report, however, the club specifies that part of the "other current management expenses" are related to the agreement with Sixth Street, a company that bought a percentage of the rights to operate the new Santiago Bernabeu for two decades in exchange for of a payment of approximately 360 million. This agreement avoided losses of 300 million in the 2021-22 season, according to The Telegraph.
The investigation also points to the exponential increase in the "other current management expenses" section in Real Madrid's annual reports. In 2017, this item was only 17 million, which the following year jumped to 46 million. In the annual report for the 2020-21 season, it amounted to 77 million and in the 2021-22 financial year it grew to 135 million, which includes the unjustified 122 million.
