Soccer: Real's $156m Zidane deal highlights Spanish solvency

By ELIZABETH NASH

Barcelona's former manager Josep Nunez caused a sensation by inviting financial journalists to press conferences shortly before his fall a year ago. Now it is common practice and transfer deals are picked over as obsessively in Spain's economic papers as in the sports dailies.

As Primera Liga champions Real Madrid "scrabble in their pockets," as Marca puts it, to raise £45 million ($156 million) for the French international Zinedine Zidane, of Juventus, observers boggle at the astonishing economic effervescence of Spanish football.

If, as expected, Zidane appears tomorrow night (NZT) resplendent in Real Madrid's centenary jersey (matt white, no purple trim), the deal would supersede Florentino Perez's record £40 million purchase of Luis Figo last summer. Real are further expected to pay Zidane £3.7 million a year.

Perez says the investment is guaranteed to bring wealth and glory. Madrid's bosses have said as much for decades, only to plunge the club deeper into the £177 million debt he inherited a year ago.

But now the claims carry a whiff of credibility. The sums could add up.

Perez, a construction magnate, unlike his predecessor Lorenzo Sanz, or his neighbour at Atletico, Jesus Gil, is no humble brickie made big. He is a qualified engineer of roads, canals and ports, former transport ministry high-flyer and Madrid City councillor, who rescued an ailing company to make his ACS construction firm the fourth biggest in Spain.

Long before realising his "old dream" of running Real, Perez made the political contacts to finesse what history may judge his boldest coup: the sale of Real's training ground in the heart of Madrid's financial quarter for £260 million. The deal will eliminate the club's historic debt at a stroke.

Voted Spanish businessman of the year in 1999, this hotshot entrepreneur is unfazed by a transfer deal, albeit the most ambitious in football history.

No one knows exactly how much Spanish football is worth. A financial analysis last year reckoned the industry generates some £1.85 billion annually, creates 47,000 jobs, amounts to nearly one per cent of GNP and forms one of Spain's most dynamic economic sectors.

The Primera Liga's £460 million budget has quadrupled in 10 years.

Spanish clubs receive more than half of their income from television: 51.3 per cent compared with 34 per cent for Italian clubs and 33.7 per cent for British.

These funds financed expensive signings, even though clubs are mostly unprofitable and in debt, having already spent money advanced two years ago by pay-per-view TV channels for rights until 2003.

Only a quarter of revenues come from gates (in Britain it is a third) and only 10.7 per cent from merchandising (17.2 per cent in Britain).

Hence the frenzy to develop "new business opportunities" and to renegotiate deals with digital TV channels to include the internet.

Eight million Spaniards surf the net, and sport is among their five favourite pastimes and their principle item of leisure consumption, according to a study commissioned by the Primera Liga. Clubs are learning to market not just jerseys and keyrings but the names of their stadiums and everything to do with a club's identity.

Perez knows all this, as details of his deal with Juve reveal: Real will receive 90 per cent of Zidane's image rights, as it does Figo's.

Expect to see Zidane's handsome features on ads for cars, banks, shoes, insurance, video games, mineral water and sports clothing, amounting to £3.7 million a year. The club expects to make £11 million just from selling 500,000 Zidane jerseys.

For months Perez has been in talks with AOL, Microsoft and Terra-Lycos about how to promote the club over the internet, pursuing a deal worth more than £370 million.

Perez's strategy, alongside signing Figo and Zidane, and selling the family silver, includes tapping new cascades of wealth through the internet (a French and English website is promised), and opening markets in Asia and Africa.

The realmadrid.com site received 800,000 daily hits during last week's spasm of Zidanemania, and 2000 fans joined the queue for season tickets. Euphoric front pages presented Zidane already clad in Real's strip. They could equally show him laying golden eggs.

- INDEPENDENT