Gareth Bale’s transfer to Real Madrid: an expensive deal for a struggling country
Anna Sonny, 6 September 2013
The transfer of Welsh football player Gareth Bale from Tottenham to Real Madrid was one of astronomical proportions – the much-anticipated deal cost a staggering €100million, making it the most expensive transfer in the world.
Real Madrid are known for signing big names, having made the top three most costly deals in history, with €94 million for Cristiano Ronaldo in 2009 and €73.5 million for Zinedine Zidane back in 2001.
While the majority of other Spanish football clubs are struggling financially, Real Madrid isn’t doing too badly. Although it has debt, the club does well through merchandising, ownership of their own TV rights and a successful performance record.
The question of whether the club will get a return on this huge investment aside, when placed within the context of Spain’s financial situation, the deal is even more astonishing. Spain has one of the highest unemployment rates in Europe, with 25% of Spaniards currently living below the poverty line. Despite Spanish Prime Minister Mariano Rajoy’s insistence that the economy is finally emerging from recession, the International Monetary Fund recently forecast that any growth will be too weak to allow for job creation and that the unemployment rate in Spain will stay above 25% for the next five years.
An even closer look at the deal shows that one of Real Madrid’s recent lenders has been Bankia. Bankia was formed in 2010 by merging seven Spanish regional savings banks in response to the eurozone crisis. The struggling bank was then nationalised and received a €19 billion bailout from the European Stability Mechanism in 2012.
Dutch politican Derk Jan Eppink has announced that he will ask the European Commission to investigate the deal, saying ‘European Union funds cannot be used for such unsustainable practices.’
€100 million is an enormous fee for a club that is being bankrolled by a struggling bank in an economically troubled country. It certainly seems unfair that taxpayers have to prop up banks in such a fraught economic climate in the first place, let alone watch them finance transfers for footballers who are on salaries most of us could only dream of.