As the hundreds of millions of Madridistas across the world celebrated their momentous 3-0 demolition of Manchester City in the first leg of the UEFA Champions League Round of 16, a famous picture began to make the rounds of Football Twitter. It depicted Madrid’s summer 2018 transfer window, with three signings – Álvaro Odriozola, Sergio Reguilón, and Mariano Díaz – being cropped out from the original image. On the left stood Vinícius Júnior, who, despite squandering a penalty, delivered a commanding
display in attack and continued his recent uptick in form.
In the middle, there was Federico Valverde, who, in the absence of Kylian Mbappé, Rodrygo, and Jude Bellingham, stepped up and delivered the goods with an unforgettable hat-trick. Next to Valverde was Thibaut Courtois, who proved why he is one of, if not the finest, goalkeeper in world football with a super display against the Cityzens. And over on the right, there was a man who, despite never playing for the club, has established himself as the most influential person in the club’s modern history: Florentino Pérez.
Born on March 8, 1947, Pérez got his start in local politics before branching into an executive role with a construction company, but he always had his heart set on one role in particular: Real Madrid president. After finishing second in the 1995 presidential elections, Pérez ran against incumbent Lorenzo Sanz, who had just guided them to the 1998 and 2000 Champions League titles after a 32-year drought. Promising to sign Luís Figo from archrivals Barcelona, Pérez took home over 55% of the votes and oversaw an impressive start to his tenure thanks to major superstar signings like Luis Figo, Zinedine Zidane, Ronaldo, Michael Owen, Robinho, and David Beckham.
Initially pursuing a ‘Zidanes y Pavones’ strategy in which superstars would play alongside academy graduates, Pérez soon became obsessed with a strategy of signing the world’s best ‘Galácticos’ and filling his team with blockbuster icons. Every single year, it seemed that Real were shattering the club-record transfer fee that they had set the previous year. But whilst this audacious approach resulted in him winning reelection in 2004 with 94.2% of the vote, it also resulted in his downfall, with Real struggling for balance and regressing to trophy-less seasons before his resignation in 2006. And it’s precisely this lavish spending that has meant that Pérez has never quite got the respect that he has deserved from other football executives.
“Being the president of a team with a lot of money is a lot easier than being the president of a team with little money,” stated Porto Sport Club president André Santos. “There are several presidents who do good work because of their available resources. In order to work and manage the best teams in international football, you need money. It’s easy being the coach of Barcelona or Palmeiras or Real Madrid; I want to see that person do the same job with a smaller, less prominent team. That goes for all the professions within a club, from the financial manager to the president to the coach. It’s not to belittle other presidents, but working and achieving success with less is more difficult, so the ease with which big clubs can access their financial resources allows them to achieve results.”
Three years after stepping away from his post, Pérez unanimously returned to the presidency after being the only candidate able to provide the €57,389,000 guarantee necessary. He continued his aggressive Galácticos policy, splurging heavily on the likes of Kaká, Cristiano Ronaldo, Karim Benzema, Xabi Alonso, Mesut Özil, and Ángel Di María. After initially struggling in the shadow of Pep Guardiola’s all-encompassing Barcelona side, Real were able to return to the apex of Spanish football after winning the league title in 2012 with a record-breaking 100 points. And after being awarded a fourth term as Real Madrid president, Pérez opted to make sweeping changes after replacing José Mourinho with Carlo Ancelotti and selling Özil and Gonzalo Higuaín in order to make way for the world-record signing of Gareth Bale from Tottenham Hotspur.
Pérez put all of his chips on the table, and he came away with the motherload as Real won the Copa del Rey and ended a 12-year wait for the elusive ‘La Décima,’ before claiming their 11th, 12th, and 13th titles in three consecutive seasons as well as a 14th in 2022 and a 15th in 2024. Somewhere along the way, however, Pérez decided to rein in the spending and focus on a more sustainable financial approach. He signed just one player in 2016 – Álvaro Morata for €30m – before more than doubling his profit the following year, which saw him spend €40.5m on two promising young stars in Theo Hernández and Dani Ceballos. And after two exorbitant summer shopping sprees, Real went an entire year without signing a player before making two in 2021, with Eduardo Camavinga arriving from Rennes for €31 million and David Alaba joining on a free transfer. He repeated that formula in 2022, replacing Casemiro with the up-and-coming French midfielder Aurélien Tchouaméni for €80 million and bringing in veteran defender Antonio Rüdiger on a free transfer.
The idea is that Real are no longer going to just be throwing their cash around in order to grow their international brand and hoard the game’s top players. Instead, they’re going to be achieving a harmony between signing young talents like Arda Güler, Endrick, Franco Mastantuono, and Fran García (who, even if they don’t pan out, could still appreciate in transfer value and earn Real a future profit), as well as splurging the cash when necessary, as seen in 2023 when they paid a fee rising to €133.9 million for Bellingham. They’re also keeping their head to the ground and searching for low-cost market opportunities like Trent Alexander-Arnold, Joselu, Kepa Arrizabalaga and Mbappé, who, despite earning a king’s ransom, joined on a free transfer from Paris Saint-Germain.
Real have been able to manufacture an approach which has allowed them to replace legends like Toni Kroos and Luka Modrić while remaining competitive in the short and long term. Instead of scrolling Transfermarkt for the most valuable players in each position and turning their attention to these players, they’d rather sign someone like Dean Huijsen or Álvaro Carreras who, despite not fully cementing themselves as a world-class player yet, has what it takes to be elite for a decade rather than just a couple of years.
Pérez isn’t just focused on producing consistently high economic revenues and competing for trophies, having surpassed Santiago Bernabéu as the club’s most trophy-laden manager. He’s also focused on clearing the debt, balancing the club’s budget, and ensuring that they have their finances in order. Despite spending a reported €1.9 billion on the renovation of their stadium from 2019 onwards, Real were one of the only major clubs in world football to post a profit in consecutive years of the pandemic, enjoying a net profit of €874,000 in 2020/21 and shrinking their net debt from €240 million all the way to €12 million today. In contrast to Barcelona, who have been stuck in financial trouble for what has seemed an eternity, Real are smooth sailing on and off the pitch.
“Real’s approach is probably a reaction to the absolute disaster of Barcelona from a financial perspective…what Barcelona’s done from a governance perspective makes no sense to me whatsoever,” stated Kelty Hearts owner Jordan Gardner. “It’s just digging, digging, digging into more debt with unsustainable spending. I think in contrast, obviously, Real Madrid has invested significantly in infrastructure with their stadium, which is a big driver of revenue for global football clubs. I think that financially sustainable approach you’re seeing from Real Madrid is really smart.”
When Pérez returned to Real in 2009, he stated, “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.” Fast-forward 17 years, and it’s clear to see that he has validated his promise. At 79, it remains to be seen just how much longer Pérez will remain in charge of Real, but one thing’s for sure: when he does depart Los Blancos for the final team, he will leave it in a much better state than he received it.
