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Page last updated at 14:38 GMT, Sunday, 20 September 2009 15:38 UK

Real Madrid debt spirals to 296m

Money spent signing top players like Kaka accounts for most of the debt

Real Madrid have announced a net debt of £296m, alongside a record annual budget of £381m for the new season.

The club's annual figures include £226m spent on four players: Xabi Alonso, Kaka, Ronaldo and Karim Benzema. Real's debt last year was around £100m.

Their budget is some £20m greater than that of arch-rivals Barcelona, whose £361m budget is also a club record.

The announcement comes after Uefa approved plans to force clubs to spend only what they can earn in revenue.

Uefa chief Michel Platini has long urged measures to ensure clubs live within their means and those plans, to be introduced from the start of the 2012/13 season, have the approval of the European Club Association, which represents Europe's clubs.

We had to make a big effort for the new arrivals of players, which explains the debt

Florentino Perez
President, Real Madrid

Uefa believes the inflated transfer fees and wages which make up football's current "volatile" economic model cannot be sustained.

Debts in the hundreds of millions of pounds, such as the figure announced by Real, are considered a prime example of the problem.

With that in mind, Real president Florentino Perez told the club's general assembly that its debts would be cut by just over £180m by June 2010, thanks to a 14% increase in revenue on last season.

"We're going through a delicate moment with the world financial crisis but we had to make a big effort for the new arrivals of players, which explains the debt," Perez said.

At last year's general assembly, the club had outlined similar plans for a £70m reduction in debt.

Perez revealed the club's wage bill represented 45% of its expenditure, and announced modernisation projects for the Santiago Bernabeu stadium as well as a theme park in Madrid.

All items voted on at the assembly were passed, including the ratification of credit arrangements with two banks, Caja Madrid and Banco de Santander.

On a separate note, Perez admitted to those present that he "had not made the right decision" when quitting the presidency in 2006, only to regain control earlier this year.

Real's opponents on the same day as the assembly were Xerez, a club lying bottom of the table with an annual budget of just £8m - less than the salaries of Ronaldo or Kaka.

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see also
European football photos
18 Sep 09 |  Football
Uefa approves new spending plans
15 Sep 09 |  Europe
Clubs agree to 'home-grown' quota
15 Sep 09 |  Premier League
Uefa warning over clubs' spending
28 Aug 09 |  Europe
Alonso completes 30m Real move
05 Aug 09 |  Liverpool
English club finances worry Uefa
04 Aug 09 |  Premier League
Real Madrid agree on Benzema deal
02 Jul 09 |  Europe
Ronaldo completes 80m Real move
01 Jul 09 |  Man Utd
Kaka completes Real Madrid switch
09 Jun 09 |  Europe
MPs raise fears over club debts
20 Apr 09 |  Football
Uefa to consider cap on spending
18 Feb 09 |  Football
Platini rejects EU regulator plan
27 Nov 08 |  Football

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