Finance&Economics: Real Madrid top football rich list for sixth year

Real Madrid top football rich list for sixth year



Real Madrid have topped the league table of the world's 20 richest football clubs for the sixth straight year, according to Deloitte.

BBC

Its Football Money League, based on season 2009-10, also said the combined revenues of the 20 clubs had passed 4bn euros (£3.8bn) for the first time.

Real's arch-rivals Barcelona retained second spot in the list, ahead of Manchester United who remain third.

Manchester City were the biggest climbers, up from 20th to 11th place.

Arsenal, Chelsea and Liverpool were fifth, sixth and eighth respectively.

'Corporate partners'

Seven of the top 20 in Deloitte's table were from England, the other three being Manchester City (11th), Tottenham Hotspur (12th), and Aston Villa (20th).

All the 20 clubs represented are from the "big five" European leagues, with Germany contributing four clubs, Italy four, Spain three and France two.

In a further sign of a financial hierarchy at the top of the European game, the same 10 clubs populated the top 10 places in the Money League for the second successive year.

Deloitte Football Money League

• 1. Real Madrid: 438.6m euros
• 2. Barcelona: 398.1m euros
• 3. Man Utd: 349.8m euros
• 4. Bayern Munich: 323m euros
• 5. Arsenal: 274.1m euros
• 6. Chelsea: 255.9m euros
• 7. AC Milan: 235.8.m euros
• 8. Liverpool: 225.3m euros
• 9. Inter Milan 224.8m euros
• 10. Juventus: 205m euros

Source: Deloitte: 2009-10

And top six ranking places are identical to last year. Meanwhile, six of the top 10 have been in the money league top 10 in each of the last 10 years.

The authors said that Real may now be about to emulate the eight years spent by Manchester United at the top of the rich list, from the first edition in 1996-97, through to 2003-04.

They also said that they had expected to see the full impact of the global economic downturn on clubs during the 2009-10 season.

"We continued to assert that the game's top clubs would be well placed to meet these challenges given their large and loyal supporter bases, ability to drive broadcast audiences and continuing attraction to corporate partners," the report says.
"This was more than borne out by clubs' revenue performance in 2009-10."

Deloitte also says that the established large and loyal supporter bases and historic on-pitch success has "continued to underpin the brand strength" of football's top clubs.

Match-day boost

Real retained top position despite a disappointing season, coming second in La Liga again and being knocked out of the Champions League at the Round of 16 stage by Lyon.

Yet the club was boosted by increased revenues from its three income streams of match day monies, broadcasting and commercial.

Match day revenues grew by 27%, partly because Real hosted the Champions League final in 2010 at their Santiago Bernabeu stadium.

"In the coming years, particularly as UEFA's financial fair play rules take effect, Real Madrid's revenue prowess should, in theory, translate into a competitive advantage on the pitch," said the Deloitte report's editor, Dan Jones.

These Uefa rules are designed to force clubs in European competition to spend only what they earn.

"The much discussed implementation of UEFA's... regulations from 2013-14 will not impact on clubs' revenue generation, with the key principle underlying the regulations being that clubs do not spend more than they earn," Mr Jones adds.

"Indeed, the regulations should help encourage clubs to identify and realise sustainable increased revenues."

'Consolidated'

Real's arch-rivals Barcelona had a successful season, again winning La Liga and being crowned Fifa World Club champions.

Manchester United had to be content with picking up the League Cup, as Chelsea secured a Premier League and FA Cup double.

"Despite the strengthening of sterling against the euro between 2008-09 and 2009-10, Barcelona have consolidated their second-placed position in the football money league, increasing their lead over Manchester United from 38.9m euros in 2008-09 to 48.3m euros," the report says.

The Deloitte review does not include the cost of transfer fees or player wages, or VAT and other sales taxes, and concentrates solely on day-to-day income from football business.

Income includes money from ticket sales, sponsorship, merchandising and other commercial revenues, television monies, corporate hospitality and non-match day stadium use, such as for conferences.

Current Affairs: Five ways to get into Oxford

Five ways to get into Oxford



Oxford University has finished selecting its new intake of students for 2011. It's a world-famous institution that has educated 25 British prime ministers. So what's the secret to getting in?

BBC

Thousands of students have now heard whether they have been offered places at Oxford University.

For those that have nervously opened the envelope to find good news, they have the added satisfaction of knowing they succeeded in what the university says was the most competitive year yet. More than 17,200 people were chasing 3,200 places.

The application process has a daunting reputation and, for state school pupils, it can seem especially difficult. While only 7% of pupils in England and Wales are from the independent sector, they make up around 46% of Oxford's undergraduates.

The university says these stats don't tell the whole story, because a third of students with all A grades in their A-levels - the pool of talent from which Oxford students are drawn - are privately educated.

Getting in is hard, but perhaps not as hard as people think, says Mike Nicholson, the university's head of undergraduate admissions, with on average five applications for every place.

"We're looking for students who are intelligent - very interested in their subject and who can demonstrate their interest," he says.

So what are the ingredients of a successful application?

1. HAVE CHUTZPAH

A touch of impudence can go a long way, says Mark Robinson, head of history at Barton Peveril College in Eastleigh, a state school with a good track record of getting students into Oxford.

"It's about having confidence in your own opinions, even when someone else says 'that couldn't be right'.

"Rather than the pupil giving ground, saying 'oh dear, silly me', we want them to say 'don't be ridiculous, of course that's the case'.

"It's an adversarial style of discussion. When we do our mock interviews and extra lessons with history students, I encourage them to argue."

The small class sizes of independent schools help cultivate this skill because they make pupils feel special and give them a sense of entitlement, he says.

Pupils who stick up for themselves stand out, says Oxford professor Thomas Noe.

"What we are looking for is a student who can address issues in a logical fashion, reason from premises to conclusion, we're looking for someone who can stand up for their own ideas but is not particularly inflexible."

Even if a student is hesitant or shy, how well he thinks will still be evident, he says.

2. UNLEASH YOUR GEEK

Extra-curricular activities are not that important, says Mr Nicholson.

"There is a presumption that if applying to Oxford, you have to be incredibly well-rounded.

"It's not good enough just to be academic. You have to have climbed Mount Kilimanjaro, raised £10,000 for charity and rescued three children from a burning building, all these fantastic achievements. You don't."

Some students have well-rounded activities and some don't. But they are all smart and that's the key, he says.

3. BE PASSIONATE

It's important to communicate your enthusiasm for your subject and not appear like you're regurgitating lines, says Bethany White, 17, who is heading to Mansfield College to study language and literature.

"It was all natural. When I was talking, I hadn't planned anything and maybe that helped. I didn't have preconceived ideas. it was spontaneous."

Go for it and be yourself, adds Bethany, from Taunton's College in Southampton.

"And your passion really. The enthusiasm and passion is really important, and if you haven't got that then don't bother."

4. PUT IN THE HOURS

At some schools, like Barton Peveril, students in their final year complete nearly four hours a week of extra classes in preparation.

Showing a knowledge beyond the A-level syllabus is crucial, and that's what makes the interview the most important part of the application, says Sos Eltis, an English tutor at Brasenose who teaches other Oxford professors how to interview.

It's about identifying the pupils who think more widely, she says, for whom A-levels seem to hold them back.

"You can't see that from paper alone. You have to interview them."

There is also a programme of week-long, residential classes over the summer, run by the university, called Uniq.

Lawrence Holdsworth, 18, who will study history at Somerville College, says it made all the difference to him.

"The Uniq summer school gave me a good taster of the teaching system which was something that I really enjoyed. The debating that comes with it and how you get to explore matters and really go off on a tangent. That is something I definitely advise."

5. GO TO A SCHOOL WITH KNOW-HOW

Schools can develop relationships with colleges, says Mr Robinson. Once you get a student into a college, he says, that college will often write and ask for more.

Anyone can get into any Oxford college, but some colleges seem to take students from the same schools year after year.

Families also play a big part in providing the right encouragement and work ethic at home.

Ragulan Vigneswaran, 17, says his Sri Lankan parents have been a big factor in his success in getting to Balliol College.

"From a young age, my parents really tried to instil into me that education is pretty much the most important thing.

"My mother I remember was teaching me maths from a really young age because she wanted me to become really adept at it and become passionate in the subject in the way she was.

"They have been supporting me continuously and encouraging me to study more - encouraging out of school study - to make myself more knowledgeable and prepared for the future."

Finance&Economics: Spain’s new caja group eyes IPO

Spain’s new caja group eyes IPO



By The Financial Times

The newly created Spanish banking group led by Caja Madrid, the unlisted savings bank, will list on the stock market to increase its capital once it has details of Spain’s proposed new regulations.

Chairman Rodrigo Rato, a former finance minister and managing director of the International Monetary Fund, said Caja Madrid and six other savings banks had decided on “100 per cent integration” of their businesses into the new Banco Financiero y de Ahorros (BFA), Spain’s third-biggest bank by assets.

The Spanish government prompted a rush to create banks by the unlisted cajas when it threatened to nationalise cajas that failed to recapitalise themselves with private or state money this year.

La Caixa, the Barcelona savings bank, last week launched Caixabank, a bank with a book value of €20.6bn ($28.2bn).

Banca Cívica, another bank created by three regional cajas, also said on Monday it planned a stock exchange listing.

Caixabank is to have a core tier one capital ratio of 10.9 per cent of risk-weighted assets under the current Basel II capital adequacy rules, well in excess of the 8 per cent minimum for Spanish lenders decreed by Elena Salgado, finance minister.

BFA’s plans are less advanced but Mr Rato unveiled pro-forma 2010 results showing that it had more than €328bn in assets and that it had just spent €9.2bn on cleaning its balance sheet through provisions and write-offs for its property loans, much of it from the €4.46bn provided by the fund for orderly bank restructuring (Frob).

The new bank’s book value is calculated at €10.24bn, and its core capital ratio is 7.04 per cent, making it almost inevitable that it must raise more capital through an equity listing or the sale of industrial holdings. Mr Rato did not reject the idea of following La Caixa and creating a “bad bank” of repossessed properties that could be moved off the bank’s balance sheet to strengthen capital ratios. “It’s undoubtedly a possibility,” he said. “It’s within our reach.”

Ms Salgado has said the maximum in extra capital required by the cajas is €20bn, on top of the €15bn already provided by the Frob and by deposit guarantee funds. In a report on Monday, JPMorgan Chase said Spanish lenders might require an extra €38bn of new capital.

Prime minister José Luis Rodríguez Zapatero, who launched the latest round of savings bank reform in an Financial Times interview in January, conceded on Monday that some cajas would probably fail to secure new capital from private investors.

But he said the Frob, which has until now lent at a punitive 7.75 per cent interest rate, would ultimately profit from any rescues. “There’s no reason for taxpayers to lose money,” he told Spanish television

Finance&Economics: Britain and Brazil prove more profitable for Santander than Spain

Britain and Brazil prove more profitable for Santander than Spain



Ailing economy hits profits of Santander's Spanish arm

The Guardian

Spanish bank Santander made more profit in Britain and Brazil than in its home market for the first time, it emerged today , as the group admitted the flotation of its UK arm would be delayed until the second half of 2011.

Profits in the Spanish division have been held back by an ailing economy and troubled property market, which has also weighed down the share price of the bank. The shares were down 31% last year when the Bank of Spain took a tougher stance against property loans causing Santander to take an extraordinary provision of €472m (£399m) in the third quarter.

In Britain, where Santander has expanded rapidly in the past five years by buying Abbey National, Alliance & Leicester and parts of Bradford & Bingley, profit rose 11% to £1.7bn, which the bank said was 18% of the total group profit of €8.1bn. Spain contributed just 15% to group profits, which were down 8.5% year-on-year, while Brazil accounted for 25% of the total.

Emilio Botín, Santander's chairman, tried to play down concerns about Spain. "Doubts about Spain are absolutely exaggerated. Frivolous comparisons have been made with other economies whose public finances and financial systems are far more fragile than ours," Botín said.

He has parachuted in his daughter Ana Botín to be chief executive of the British arm after the sudden departure of António Horta-Osório who is taking the helm of Lloyds Banking Group next month.

She has pulled out of talks with the government over its banking plan, known as project Merlin, but said that Santander would "support the broad objective" by making commitments to lending in 2011.

While its market share has been increasing, Santander's net lending in the mortgage market – which includes loans being repaid - fell 27% to £5.5bn.

The UK bank, which is to expand further once completing the takeover of 318 Royal Bank of Scotland branches, reported a decline in margin in the fourth quarter, which it partly blamed on regulatory requirements to hold more liquid assets.

Analysts at Morgan Stanley said this may have a "modest negative read-across" for Lloyds, but noted that impairment charges at Santander UK were improving, down 16% year-on-year to £651m. Santander is on course to have more branches in the UK than its arch rival HSBC.

Finance&Economics: Banco Popular profits hit by stricter debt provisioning

Banco Popular profits hit by stricter debt provisioning



BBC

Spain's third largest bank, Banco Popular, has joined Santander in reporting 2010 profits hurt by new stricter rules on bad debt provisioning.

The bank said net income fell 23% from 2009, to 590m euros ($804m, £498m).

It comes after the bank set aside 1.8bn euros to cover possible losses on bad loans in order to meet new standards laid down by the Bank of Spain.

Fourth quarter profits were hardest hit, down 40% versus a year earlier.

Spain's banks are suffering in the wake of a property market meltdown and a painful recession that has seen the unemployment rate rise to 20%.

Robustness

Banco Popular's non-performing loans increased to 5.2% of its assets at the end of 2010, up from 4.8% a year earlier.

"2010 was a year of severe economic and financial crisis, worsened by a profound deterioration of the sovereign risk of many of the euro area countries," observed the bank in its financial report.

"This situation caused capital markets to remain virtually closed for many Spanish financial institutions throughout the year."

The bank pointed out that it had taken action to increase its robustness to any further flare-up of the eurozone government debt crisis.

Its core capital ratio - a measure of how much losses the lender can absorb without becoming insolvent - rose from 8.6% to 9.4% of its assets, and the bank claimed it was well positioned to meet new, stricter international capital requirements.

The bank also said it had reduced its dependence on short-term funding from the international wholesale markets, making it less vulnerable to a loss of confidence in the banking sector.

The results were anticipated by markets, with Banco Popular's share price largely unchanged at the open of trading in Madrid.

The bank's shares remain 72% below their peak level of early 2007, but are currently about 33% above the low reached during the 2008 financial crisis.