Spend like Perez

Quimby: I guess we're not going to find anything.
Otto: Um, how are we going to get out of here?
Homer: We'll dig our way out!
Wiggum: No, dig _up_, stupid.

- Homer the Vigilante, The Simpsons

People are scratching their heads and wondering what the f**k has gotten into Florentino Perez. Kaka for €67.5 million. Ronaldo for €93 million. David Villa on his way. And Perez says that that's not all. Real Madrid have a €300m kitty to spend, and they're only about halfway through that.

Perez has a mission: save the world.

The thing about Perezian economics is that when you're in a slump, you're got to spend your way out. Real Madrid have debts of maybe €500 million. If they were an investment bank, they'd be bailed out by the government by now, but since they're just a humble football club, they're going to have to do it under their own steam. Spend silly amounts on money on players to attract merchandising deals, sponsorship deals, kit sales.... and it'll all work out, somehow.

Kaka and Ronaldo are important because they're young, photogenic and able to sell a lot of merchandise. The fact that they are fabulously talented is an additional bonus, but not that important (e.g. look at David Beckham). Real Madrid earn 40% of their revenue through merchandise, and it's important to have attractive names on the backs of those shirts.

It's kind of troubling when you realise that Real Madrid are still laden with debt.