Is Perez Sans Spending Sanity?

Khalid KhanCorrespondent IJune 16, 2009

MADRID, SPAIN - JUNE 02:  Real Madrid president Florentino Perez speaks a word of welcome during the presentation of the new Real Madrid coach Manuel Pellegrini at the Santiago Bernabeu stadium on June 2, 2009 in Madrid, Spain. The 55-year-old former Villarreal coach Pellegrini has signed a two-year deal with Los Merengues.  (Photo by Jasper Juinen/Getty Images)

Kaka has been signed for $100 million.

Ronaldo probably will be on the way soon for around $130 million.

Everyone—soccer analysts and Real Madrid fans are wondering as to where the money is coming from.

Where is it going to come from for the next three or four signings as declared by Florentino Perez?

Some say it’s from bank loans and future earnings from TV rights as collateral, while others think it's from possible player sales.

Well, wherever it is coming from, it will have its bottom.

But the biggest question that is prompting worry is, how will this affect the future financial soundness of the club in the longer run?

How long will it take to recuperate from all that spending?

Will revenue from the sales of shirts compensate for the astronomical transfer money and coming wage bills?

Incomes from sponsorships will likely increase and so will TV viewership bringing in money. But the question remains, will that money (well or ill) being spent bring sporting success?

There is a prominent lack of reinforcements coming in the back, and lack of expression of intentions regarding this matter are also alarming.

Florentino Perez had better get it right this time around or the mess might be deeper.

There wouldn’t be any land to sell to improve the finances and fix debts.