Real Madrid is spending huge money this summer to rebuild its team, and much of that fund is coming from an unexpected source, its own youth academy. Young players who came up through the club’s academy keep bringing in millions when other teams buy them, and that money helps cover the cost of signing new high-profile new players.

The squad rebuild became necessary after a disappointing 2025–26 season. Real Madrid struggled on and off the field with reports of dressing room disputes between players and growing frustration among supporters, forcing the club to make major changes.

Real Madrid president Florentino Pérez faced his first serious election challenge since 2009 earlier this year when businessman Enrique Riquelme joined the election. Pérez secured another victory on June 7, winning an eighth term that will keep him in charge until 2030.

After Pérez secured another term, Real Madrid quickly stepped up its summer transfer plans. The club has targeted several high-profile signings, including defender Ousmane Diomande for an estimated €120–130 million and midfielder Rodri for about €65–75 million.

At the same time, several longtime players left the club. Right-back Dani Carvajal departed after his contract ended, closing out more than a decade with the team that included four La Liga titles and six Champions League trophies. Defender David Alaba also departed after his contract came to an end.

Buying expensive players does not actually cost a club the full transfer fee in one season. Instead, clubs spread that cost out evenly across a player’s contract through a process called amortization. It means a 125 million euro signing on a six-year deal counts as roughly 21 million euros in cost each year.

Real Madrid expects its player amortization costs to increase to €180 million for the 2026–27 season. That would equal around 14% of the club’s total revenue. It is up from 10% the previous season but remains under the club’s 15% limit.

Real Madrid also carefully tracks the ratio between player salaries and total revenue. The figure is about 44%, which remains below the club’s 50% target. This shows Real Madrid continues to spend heavily while keeping its finances under control.

This is where Real Madrid’s youth academy plays an important role. The club set a budget of about €42.6 million this season to run its academy while expecting player sales to generate as much as €60 million in revenue.

Several academy graduates have already brought in millions through transfer deals. Miguel Gutiérrez joined Napoli in a €7 million deal, while Álex Jiménez moved to Bournemouth for €8 million. Real Madrid also received transfer fees from the departures of Chema Andrés, Víctor Muñoz, Yusi, and Jacobo Ramón.

This pattern is not new for Real Madrid. Last summer, money from academy player sales and earnings from the Club World Cup helped the club sign Dean Huijsen, Trent Alexander-Arnold, Álvaro Carreras, and Franco Mastantuono.

Real Madrid’s youth academy continues to prove its value as one of the club’s strongest financial assets. By developing young players and selling them for profit, the academy helps fund many of the club’s biggest signings.