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Atletico Madrid Riding the Capital Wave

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Recently Atlético Madrid received a boost in continuing its global ambitions and offset its Covid19 financial impact by securing an €182 million investment from US based Ares Management who picks up a 33.96 percent stake in return. Atletico HoldCo now becomes the club’s majority shareholder with a 65.98% stake. 

 

There are many reasons why the investment can be viewed as well-made decision, some seen and many unseen. What we all know is that Atletico Madrid is undoubtedly one of the most recognizable La Liga football clubs across the world. They just clinched their eleventh La Liga title, first since 2013-14, on the final matchday of the season, after a 2–1 comeback win against Valladolid. They have strong global ambitions with presence in Canada, Mexico through their ownership and academies in Europe & Asia and a world class stadium complex to cater to the fans.

 

But those are not the only reasons. The behind-the-scenes efficient football system that Atletico Madrid employs deserves to be put forward. Let’s deep-dive into the unseen footballing factors which makes it an attractive proposition for the investors.  

 

Let’s start with the obvious and seen factors first: 

 

 

Consistent Revenues 

 

Gross revenues have been on an uphill drive since 2017-18 season when they clocked €304.4 million. In the following season, they recorded a healthy 20% growth clocking €367.65 million revenues. Although, the 2019-20 season was partly hampered by the Covid19 impact, Atletico Madrid managed to clock €325.3 million falling just 11.5%.     

 

 

 

Strong Performances 

 

Atletico Madrid has consistently given strong domestic league performances in the past 4 years. They stood second in two successive seasons, 2017-18 & 2018-19, finished third in 2019-20 season and winning the league in 2020-21 season.  

 

The strong performance indicates a strong football system at the backend operated by the Sporting Director and a consistent Coach at the helm. 

 

 

 

 
 
 

When we look at the unseen footballing factors, three factors can be seen to demonstrate the attractiveness of Atletico Madrid. 

  1. Strong Squad Market Value 
  2. Controlled Wage Bills 
  3. Net Transfer income/expenses over the last four seasons 

 

Let us look at these more closely:  

 

Strong Squad Market Value

 

Another indicator for the strong football system can be the consistent and growing squad market value. 

 

 

 

 
 
 

Over the last two seasons (2019-20 & 2020-21) the Atletico Madrid squad market value is on the upward climb unlike the other ‘big two’ in La Liga, as can be seen in the below given graph.  

 

 

 
 
 
 

Controlled Wage Bills 

 

Atletico Madrid has a very healthy Wage Bill to Market Value comparison which can give an idea on ‘Value-For-Money’ of the squad. 

 

 

 
 

It can further be seen from a direct ratio between Market Values and Wages as given below. A lower value would signify a better ‘value-for-money’.  

 

 

 

 

 

It’s important to mention here that the last season ratio is even lower than the La Liga average. The wage cut for the pandemic season has to be mentioned here but in spite of that Atletico Madrid is still a strong value-for-money club. 

 

 

 
 

 

Net Transfer income/expenses over the last four seasons 

 

Healthy and manageable net transfer income/ expenses are a good way to see the efficient backend footballing system in place. Atletico Madrid has a very manageable net expense when we look at the total income / expenditures for the cumulative transfers, including both incoming and outgoing, over four seasons from 2017-18 to 2020-21. 

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We can go on about the reasons elaborating the investment prudence, but the point here is that much of its success is due to behind-the-scenes football system management and that lies with the role of an able Sporting Director, Andrea Berta in this case. 

 

The role of a Sporting Director is fast becoming the Most Important Role in high-performance sports like Football. We at SBI will continue to highlight the functions of this role in a series of deep-dives over a period of time.  

 

 

 

 

 

Written by: Rana Ghosal

Image source: By Fernandopascullo 

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