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Real Madrid reach agreement in principle with midfielder over new contract

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Photo by Angel Martinez/Getty Images

In a major update, Jose Felix Diaz of MARCA reports that Real Madrid and Luka Modric have reached an agreement in principle over his contract renewal for one more year.

Modric, 38, has a contract that expires at the end of the ongoing season, and for quite some time it was believed that the Croatian international would bring an end to his time at the Santiago Bernabeu in the summer.

However, things have taken a U-turn in the past few days, with Real Madrid deciding to hand the veteran superstar a new contract.

Earlier today, Modric’s agent hinted that a renewal was very much on the cards and now it appears that it is a done deal.

Staying put. (Photo by JAIME REINA/AFP via Getty Images)

As per MARCA, Real Madrid tabled a renewal offer for Modric, as well as his midfield partner, Toni Kroos, with club president Florentino Perez taking matters into his own hands.

And, it is further claimed that the Croatian international has said yes to the proposal, with an agreement in principle now in place between the two parties.

It is now expected that Kroos will also follow suit, meaning Los Blancos will tie down their veteran superstars for one more season.

Modric, for his part, was reported to be willing to accept a pay cut as well as a reduced role in the team in order to stay as a Real Madrid player, which may have played a part in the hastened agreement.

The ongoing season saw Modric lose his prominence in the team in the early parts of the campaign. However, he has proven in recent months that he can still be a valuable contributor to the team.

Furthermore, his presence in the dressing room is a huge bonus as youngsters can feed off his knowledge and experience. So, Modric continuing at Real Madrid for another year is certainly a good news.

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Real Madrid News

Revealed: The blueprint behind Real Madrid’s €1 Billion revenue ambition

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Photo by FRANCK FIFE/AFP via Getty Images

As one of football’s biggest and most successful institutions, Real Madrid enjoy serious perks on the economic front. After all, they cater to a worldwide audience and thus see their remunerations come in from across borders.

The arrival of Kylian Mbappe will only serve to further grow Los Blancos’ fanbase, and with a generational squad set to dominate world football for the years to come, Florentino Perez sees a special marketing opportunity.

According to reports from SPORT, Real Madrid have thus set themselves a target to hit €1 billion in revenue and have drawn up a concrete plan for the same.

The player aspect

As a football institution, one of the most significant aspects of remuneration is the team’s direct winnings in terms of prize money. Having won the Champions League last season and with Mbappe coming in, the team is in safe hands.

Moreover, the average age of Real Madrid’s squad is just 27.1 years implies that the team has significant longevity with little change expected in personnel.

The second important aspect that the club hopes to count on is the crowd-pulling factor that such young players exert on the new generation.

Kylian Mbappe will be the face of Real Madrid’s marketing campaign. (Photo by FRANCK FIFE/AFP via Getty Images)

Real Madrid already boast 410.9 million followers on social media and have added 48.4 million just last year. Mbappe, who himself has 132 million followers across Instagram and X, will further amplify that number next season and add to the club’s followers.

It is thus clear that the Frenchman will become the face of the club and the centre for all marketing operations of Real Madrid plan.

The road to €1 billion is thus not complicated, although Perez must be wary that Mbappe is picky with the brands he endorses. Further, the distribution of image rights will be a major factor to finalise.

The new Bernabeu

Having undergone extensive renovation, the New Santiago Bernabeu will take over as the world’s highest-grossing football stadium next season and play a massive role in boosting Real Madrid’s collections. The partnership with Sixth Street and Legends will also be crucial.

Furthermore, the new venue will also serve as a massive economy generator through miscellaneous events. Apart from Taylor Swift, the club also has agreements with Karol G, Aitana, Lola Indigo and La Velada del Ano de Ibai Llanos for exclusive events.

Real Madrid plan to add extra revenue from exclusive events at Santiago Bernabeu. (Photo by Angel Martinez/Getty Images)

Needless to say, such events will serve significantly to boost the income and near the elusive €1 billion mark.

Cost-cutting

The final, yet critical manoeuvre Perez plans is to cut the costs on the wage front with a salary reduction of €0% already being made in both 2019-20 and 2020-21. That was, in fact, one of the major reasons Real Madrid stayed on their feet in the pandemic.

Player sales is another element where the men in white have worked their plan, getting rid of the older players while their market value was still high and reinvesting the cash into younger talents who can serve for at least the next decade.

The club recorded north of €800 million in income last year and the €1 billion mark is not too far off. Needless to say, the coming year could thus be special for the men in white.

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