The coronavirus is likely to be fatal for the revenues of Real Madrid, which is currently going through a financial crisis since the end of football competitions. Indeed, the Merengues could lose their sponsors who are also in difficulty.
The main source of income for Real Madrid is sponsorship, including advertising and sponsorship, an area that was expected to generate 371 million during the 2019-2020 campaign.
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However, with the health crisis, sponsors also find themselves seriously affected financially with the cessation of football which gave them some visibility. Some of them are already struggling to survive. If they collapse, Real Madrid will not be immune.
Casa Blanca currently has contracts with fourteen companies, including Adidas and the airline Emirates, which are the main sponsors, and therefore providing the bulk of the club’s sponsorship income.
Indeed, the new contract signed in 2019 with Adidas runs until 2028 and is worth 100 million euros per year to the club while the jersey sponsor Emirates provides an additional 70 million euros per year.
In the midst of unprecedented financial fallout from the coronavirus crisis, Adidas was forced to apply for a 2.4 billion euro loan from the German government.
The situation of many club sponsors naturally worried the Bernabéu board of directors. “If there is no football soon, sponsors can seek to be reimbursed for part of their contract money or to make adjustments,” admitted David Hopkinson, global director of sponsorship for club.
If Madrid’s sponsors continue to weather the crisis, the impact could quickly hit the La Liga giant.