La Liga released the salary limits of all 20 clubs yesterday and, rather unsurprisingly, Real Madrid were once again the club with the highest limit.
Los Blancos saw their salary cap increase to €832.8 million, underlining the exceptionally strong financial position they continue to occupy.
Now, as quoted by Mundo Deportivo, La Liga corporate director Javier Gomez explained the mechanism under which Madrid saw their salary limit increase.
La Liga explains Madrid’s increase
Gomez explained that the increase comes from a rule available to financially healthy clubs that meet the required economic ratios.
“It is normal. Under the regulations, certain clubs that meet specific ratios and have healthy accounts can use savings accumulated from previous years to increase their limit,” Gomez said.
That explanation is important because Madrid’s increased spending capacity is directly connected to the club’s financial position rather than an exceptional concession from La Liga.
Real Madrid’s high salary cap is reflective of their good accounts. (Photo courtesy: Real Madrid official website)
“They can request an increase of up to 25% and they use it. One thing is requesting it and another is actually using it,” he added.
Madrid rewarded for healthy finances
For Real Madrid, the key phrase is “healthy accounts.”
La Liga‘s system effectively allows qualifying clubs to make use of financial strength built up in previous seasons.
Madrid have therefore been able to convert accumulated savings into greater flexibility within their squad cost limit.
That does not mean the club must spend everything available to them. As Gomez stressed, being authorised to increase the limit and actually using that entire capacity are two different things.
It nevertheless leaves Madrid with considerable room when planning contracts, renewals and future transfer windows.
Financial strength gives Madrid options
Los Blancos made several marquee signings this summer who would definitely have arrived with significant contract demands.
More importantly, the club committed a lot of money to the renewal of Vinicius Jr. back in the summer.
Real Madrid are planning contract renewals for Thibaut Courtois and Jude Bellingham. (Photo by Florencia Tan Jun/Getty Images)
Since the close of the transfer window, the club have turned their attention to renewing the contracts of their other superstars.
It has been revealed that Madrid have effectively agreed a contract renewal with shot-stopper Thibaut Courtois.
Los Blancos are also accelerating talks to renew Jude Bellingham’s contract before English clubs enter the scene.
Madrid’s strong financial position is allowing them to position themselves aggressively when it comes to securing the future of the squad.
Having the option is valuable, and it remains to be seen how the club use it.
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