“I am well aware of the difficulties of the moment and I know perfectly well that the global situation and the club’s situation make this new project a complex challenge. But I also know that we have the ideas, the model, the passion and the human team necessary to reposition Real Madrid in the right place. In 2000, when the socios gave me the confidence to face a new project, I received a club with very serious and enormous financial problems, with a notable loss of values and such a serious image deterioration that it was putting our own identity at risk. That is why I return with an even greater illusion than that of 2000. That is why I return with more ideas, more strength and more passion than ever. An innovative and stable project that generates confidence and that faces this new difficult time but full of opportunities.”
Those were the words of Florentino Pérez on May 14, 2009, when he announced his decision to run for president of at the Hotel Ritz Madrid, a mere three years and three months after resigning from the same post.
Perez Galacticos 2.0 Project
Unlike in 2000, Pérez was not tasked with ousting an incumbent president whose reign had seen Madrid end a 32-year-wait for the European Cup and win two Champions Leagues in the past three years. Pérez won the election unopposed after being the only candidate to provide the €57,389,000 guarantee necessary to run for president, and he followed it up with a sensational transfer spree that saw Kaká, Cristiano Ronaldo, and Karim Benzema arrive at the Santiago Bernabéu. When that failed to result in any silverware, as manager on the back of a treble-winning campaign with Inter, whilst signing Mesut Özil, Sami Khedira and Ángel Di María in the transfer window. However, they could merely muster a Copa del Rey as Pep Guardiola’s Barcelona side continued to make a mockery of their rivals on the pitch.
Pérez’s just rewards finally came in 2011/12, when Madrid won a record 32nd league title whilst losing to Bayern Munich on penalties in the Champions League semi-finals. It was called the ‘La Liga de los Récords,’ as Los Blancos broke several records including the most goals in a league season (121) and the most points (100). “This team is already part of this club’s legend. Its numbers will be impossible to forget and it has honoured our history. Talent, devotion, sense of sacrifice and the defence of this club have formed a formidable squad that has won this league title with a magnificent coach who is in the hearts of all Madridistas.”
Perez Caught Denigrating Club Legends
These days, Pérez’s quotes have taken a far different turn. In April, his shocking plans to secede from the UEFA competition with the breakaway European Super League, combined with his bizarre press appearance, saw the radical idea crash and burn a mere days after the announcement. Three months later, the 74-year-old landed himself in even more hot water when leaked audio recordings showed Pérez calling Cristiano Ronaldo “an imbecile” and attacked club legends Raúl González and Iker Casillas as two of the ‘biggest frauds’ in club history. A clip from 2006 showed him denigrating former Real Madrid manager Vicente del Bosque, stating, “They don’t offer Del Bosque a job because everyone knows that he isn’t a coach. He’s the biggest lie that I have seen in my life.” Del Bosque would go on to take charge of the Spanish national team in 2008, leading them to their first ever World Cup as well as a second-straight European Championship.
Madrid’s Quiet Transfer Window
Perhaps most frustrating for the average Madridista is the club’s lack of activity in the transfer market. Whilst Atlético Madrid have completed the signing of Rodrigo de Paul from Udinese for a fee of €35 million, Barcelona have signed Sergio Agüero, Eric García and Memphis Depay on free transfers in addition to signing Emerson from Real Betis for a fee of €9 million, although their ability to register their signings and renew the contract of Lionel Messi hinges on their ability to balance their wage bill and meet La Liga’s salary cap requirements (Which Barcelona could not do). Real Madrid, on the other hand, have only completed one signing — bringing in David Alaba on a free transfer following the expiry of his contract at Bayern Munich.
While it cannot be denied that Madrid have made a major coup by bringing in an elite player in Alaba who is capable of filling in across defence and midfield and who has played a vital role in Bayern’s domestic dominance over the past decade, excitement over the Austrian captain’s arrival will surely be tapered by the departure of captain Sergio Ramos on a free transfer as well as the departure of Raphaël Varane to Manchester United. Alaba is set to earn a net salary of €12 million until 2026 in addition to a signing bonus of €20 million, and while he has enough quality and versatility to play a leading role under manager Carlo Ancelotti, it remains to be seen whether he alone is enough to fill the departures of Ramos and Varane.
Even with Varane joining Manchester United for a fee of £34 million plus add-ons, there is the general feeling that Madrid will not reinforce their backline with any new signings. Dani Carvajal has renewed his contract until 2025, and he’ll be looking to steer clear of the injuries that have constantly sidelined him over the past few years and have forced Lucas Vázquez and Nacho Fernández to deputize at right back. Ferland Mendy, Miguel Gutiérrez (provided he doesn’t leave on loan) and Marcelo provide solid depth on the left side of back three, and it is expected that Éder Militão will build on his momentum from last season and establish a starting spot in the centre of defence alongside Alaba or perhaps even Mendy. After spending the past two seasons on loan at Wolves and Granada, Jesús Vallejo could play a backup role at centre back alongside Nacho, whilst the likes of Pablo Ramón and Víctor Chust could also make the step up from Real Madrid Castilla to the first team.
Indeed, it’s likely that the majority of business that occurs in the remaining month of the transfer window will be outgoings rather than incomings. Whilst Isco and Gareth Bale will likely remain for the final year of their contracts, Takefusa Kubo and Dani Ceballos could be loaned out and join Borja Mayoral (Roma), Diego Altube (Fuenlabrada) and Reinier, who joined from Flamengo for a fee of €30 million in January 2020 before heading out on a two-year loan to Borussia Dortmund. Alongside Reinier, Ceballos, and Kubo, Brahim Díaz is another player who joined the club as a highly rated youth prospect but has struggled to make an impact due to a lack of opportunities. Having joined from Manchester City in January 2019 for a fee of £15.5 million potentially rising to £22 million, Brahim made just six league appearances in 2019/20 before joining Milan on loan.
Frustrating Transfer Policy
Therein lies one of Real Madrid fans’ biggest gripes with the management of Florentino Pérez. Rather than investing heavily in proven, world-class stars, Pérez has mainly focused on trying to find the next world-beater. He has never quite managed to rid the taste of missing out on Neymar to Barcelona after the Brazilian forward showcased his potential on the world stage for Santos, and he has been desperate to stockpile young talents who are still far away from reaching their prime. In fact, when you total the amount of money that Madrid paid for Luka Jović, Vinícius Júnior and Rodrygo, it surpasses the initial fee of €145 million that Paris Saint-Germain splurged for Kylian Mbappé in 2018. Indeed, if PSG does sell Mbappé or renew his contract, they would have to pay Monaco an additional €35 million, but nothing if they lose him for free.
Perhaps that helps to explain, then, why PSG have refused to part with Mbappé despite all indications pointing to him running down his contract and departing the Parc de Princes on a free transfer next summer. Despite a glitzy shopping spree that has seen Georginio Wijnaldum, Achraf Hakimi, Sergio Ramos and Gianluigi Donnarumma join Les Parisiens, Mbappé has shown no indications of renewing his contract and instead appears to have his heart set on a move to Los Blancos, who, one year after failing to complete a single transfer for the first summer window since 1980, have signed just Alaba on a free transfer. Freed from the shackles of Financial Fair Play (FFP) and powered by Qatari state-owned Qatar Sports Investments (QSI), PSG not only have the power of splurging fortunes in wages, signing-on fees, transfer fees and agent commissions, but the financial liberty to reject offers and allow their most prized asset to run his contract down to the final months, and risk losing him for nothing.
Madrid Financially Handcuffed
On the other hand, Real Madrid were not prepared to risk missing out on a hefty fee for Varane and promptly cashed in on him, their latest high-profile departure after last summer’s sales of Achraf Hakimi, Sergio Reguilón and Óscar Rodríguez. Contrary to Pérez’s first spell in charge, the past decade has seen Madrid take drastic measures to limit their transfer spend and avoid a Galáctico-style policy. There have been exceptions — their La Décima triumph in 2014 was preceded by the world-record capture of Gareth Bale and followed by the arrivals of James Rodríguez, Toni Kroos and Keylor Navas — but subsequent years saw a far more reserved approach take hold at the Santiago Bernabéu. The club enjoyed a net positive transfer spend in the 2016/17 season, with Álvaro Morata being the only incoming signing, and the following season, they reaped an even greater net spend of $101.2 million thanks in large part to the sale of Morata to Chelsea.
Despite this, the club achieved an unprecedented dominance in the Champions League, winning three in a row and also claiming a league title in 2016/17. The weeks that followed Madrid’s fourth Champions League triumph in five years marked the collapse of an era, however, as abruptly resigned from his position as manager. He would have been irked by the club’s lack of ambition in the transfer market, namely, letting Kylian Mbappé join Paris Saint-Germain the previous summer, and cognizant of Cristiano Ronaldo’s impending departure to Juventus. Pérez stuck to his guns and gambled on the purchases of Mariano Díaz and Vinícius Júnior to replace the outgoing Portuguese forward, a decision that blew up in his face. Real Madrid crashed out of the UEFA Champions League at the Round of 16, finished 19 points behind Barcelona, and blew through two managers — Julen Lopetegui and Santiago Solari — in quick succession. By the time Zidane returned in March, he had more leverage than ever before.
Their Last Big Splash and Zidane
In perhaps the most spectacular transfer spree since the summer of 2009, Real Madrid splurged a total of €163 million on young talents Luka Jović, Éder Militão and Ferland Mendy, whilst paying €45 million for Brazilian teenager Rodrygo Goes. The crown jewel of them all was Eden Hazard, who, despite having one year left on his contract at Chelsea, arrived for a mouth-watering sum of €100 million, potentially rising to €146.1 million in variables. Zidane had long been an admirer of the Belgian winger and was convinced he needed to do everything necessary to bring him in as a replacement for Cristiano, even if it meant snapping him up on a five-year deal worth £400,000 per week. Madrid would go on to win the La Liga title thanks in large part to a steel trap defence, but apart from Mendy, none of their new signings played leading roles in their domestic triumph.
The following year has been marked by arrivals rather than departures, with promising youngsters such as Hakimi and Reguilón sacrificed and key pillars in Ramos and Varane being allowed to depart. Most significantly, it saw Zidane step down from his coaching position for the second time in three years, claiming in a farewell letter published by AS, “I’m leaving because I feel the club no longer has the faith in me that I need, nor the support to build something in the medium or long term. I’m a natural-born winner and I was here to win trophies, but even more important than this are the people, their feelings, life itself and I have the feeling these things have not been taken into account, that there has been a failure to understand that these things also keep the dynamics of a great club going.”
As It Stands
All in all, it leaves Madrid in an uncomfortable position heading into next season. Whilst they were able to mount a deep run in Europe and challenge for the league title until the final week of the season, there were clear signs of fatigue and incoherence from a squad that gives off the impression of a nearly empty tube of toothpaste that’s being stretched and squeezed to the brink. They have little room to splurge, as the continues to make a sizable dent in the , whilst the effects of the COVID-19 pandemic has caused an estimated total of €300 million in lost revenue. “Here at Real Madrid we’ve lost a lot of money, we are all going through a very bad situation. When there is no profit, the only way is to play more competitive games during the week,” Pérez stated during his widely panned European Super League interview on El Chiringuito.
It is tempting to nail the coffin in Pérez’s grave after a year that has produced so much embarrassment and turmoil for his club, but the numbers say otherwise. Whilst their rivals are unable to renew the contract of their talisman and register their new signings, Real Madrid are one of the only major clubs in the continent to post a profit in consecutive years of the pandemic, enjoying a net profit of €874,000 in the 2020/21 season. They have shrunk their net debt from €240 million to €46 million, and once the new Santiago Bernabéu has been constructed and the market has returned to normalcy, few clubs will take advantage with the same vigour and aggression as Real Madrid. It is expected that Isco, Gareth Bale, Marcelo and possibly Luka Modrić will depart following the expiry of their contracts next summer, which would also free up space in the wage bill and allow Madrid to rejuvenate their squad with younger, promising players. What’s more, La Liga have agreed to a €2.7 billion investment deal with Luxembourg-based private equity firm CVC Capital Partners, which will reportedly see Madrid take home €260 million from the deal — although only 15% of that can be spent in the transfer market.
Real Madrid will be forced to bite the bullet and tighten their belts for another transitional season, but it is fair to say that brighter days are on the horizon. Two of Real Madrid’s long-awaited transfer targets — Eduardo Camavinga and Kylian Mbappé — are set to be free agents in 2022, whilst another — Erling Haaland — is set to be available for just €75 million with his release clause kicking in next summer. After riding out the storm of the pandemic, Los Blancos are set to usher in a new era of Galácticos and stake their claim on Europe’s elite.
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