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How Florentino Perez Turned Real Madrid into the Most Expensive Football Club in the World

For over 20 years, 76-year-old Florentino Perez has been leading Real Madrid. In the early 2000s, he took charge of the club, which was burdened with massive debt. He gradually transformed it into the world's most expensive football brand. As the president of Real Madrid, Perez achieved this feat through unconventional, risky moves and a strict hierarchy within the club, where no one questions his decisions.

Clever Move with the Transfer of Figo

Real Madrid is one of the most attractive and recognizable sports brands today. It confidently holds the top spot in Forbes' ranking of the most expensive football clubs globally, with a value of $6.07 billion. The slight lead over its closest competitors, Manchester United ($6 billion) and Barcelona ($5.5 billion), is not the only advantage; Real Madrid's main strength lies in its consistent ability to earn and win. While every team may have off seasons, under President Florentino Perez, Real Madrid has had practically none.

At various times during his presidency, the slender older man with glasses, standing at 165 cm, consistently proved himself to be a superb manager, an extraordinary reformer, and a visionary. Perez's secret to success lies in his keen understanding of human psychology. One of the most illustrative moments of Perez's abilities occurred in 2000 when, through a clever combination of tactics, he ousted the incumbent president Lorenzo Sans, even though the team had triumphed in the Champions League that year.

The turning point was Perez's promise to lure Barcelona's main star, Luis Figo, to the Santiago Bernabeu. The opportunity to outshine their main competitors outweighed Sans's achievements, and club members voted for the bold and ambitious president. Perez also brilliantly played a personal game with Figo and his agent. In case of losing the election, the Portuguese player would receive $2.5 million. Still, if he refused to move to Real Madrid and Perez won, Figo was obliged to pay $32 million. Figo and his agent fell for the bait, and in July 2000, the Portuguese player moved to the Madrid club for €60 million.
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Perez took over Real Madrid in dire financial straits – despite numerous trophies, debts were constantly increasing. They amounted to $319.8 million by the early 2000s. The president addressed this issue by selling the club's land, which housed the training base needing reconstruction. The Madrid municipality valued the property at €480 million, and the club moved to the suburbs, eventually building a modern training center.

Nevertheless, Perez's main achievement at Real Madrid should be considered the revision of the club's transfer policy. Betting on "galacticos" – acquiring players of the caliber of Zinedine Zidane, Ronaldo, David Beckham, Cristiano Ronaldo, and Gareth Bale (amounting to a total of €355 million) – helped Real Madrid attract fans worldwide, become a global brand, and significantly improve revenue figures. A Deloitte report published in 2023 proves the validity of this strategy: the club's revenue for 2022 amounted to €713.8 million, second only to Manchester City (€731 million).

33 trophies in 20 years

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Real and its fans are fortunate because Perez's ambitions were initially political. But in the mid-1980s, his Reformist-Democrat Party (PRD) lost parliamentary elections. However, by that time, Florentino had a reputation and money. He earned it through a successful deal in 1981 when he acquired the bankrupt construction firm Construcciones Padros (now the ACS Group) and made it one of the most successful developers in Spain and the world. In the first nine months of 2023, ACS Group reported a net profit of 576 million euros. Forbes estimates the president of Real's personal fortune at $2.7 billion.

Of course, on the path to success and recognition at the helm of Real, Perez had to experience a full range of emotions - from joy to disappointment. In 2006, Florentino was so affected by the Champions League exit and the lost title to Barcelona in the Spanish championship that he resigned. A three-year break was enough to find inspiration - after Perez's return in 2009, Real adjusted its strategy, relying on "galacticos" and scouting young, talented players worldwide. The current team's game is defined mainly by young Brazilians Vinicius Junior and Rodrigo, and from the following season, 17-year-old talent from Palmeiras, Endrik, will join the squad.

Another brilliant decision by Florentino was appointing Zinedine Zidane as the head coach in 2016. The great footballer with experience only in Real's second team turned out to be a top coach. With him, the Madrid club won the Champions League thrice (2016, 2017, 2018). Thanks in part to this, the current president of Real has collected a collection of 33 trophies in 20 years - no one before him won more. The latest (so far) was obtained last weekend by defeating Barca in the Spanish Super Cup final.

No matter how loud the successes of Real were, Perez consistently adhered to an authoritarian management style - no star was guaranteed immunity. For example, Zidane left Real in 2021 after an unsuccessful return to the team, expressing resentment towards Perez. "I am leaving because the club no longer believes in me. Everything I built day by day for years was forgotten," Zizou wrote in an open letter to the fans. The Frenchman is far from the only one to whom Florentino made it clear that the club's interests, owned by a limited number of club members ("socios"), always come first. Perez enjoys their full support - the structure resembles a limited liability company, where the president is elected by voting. Unsurprisingly, Perez has built an obvious hierarchy in Real - his decisions are undisputed.

Under a competent strategist's and manager's leadership, the club confidently passed the pandemic stage and found funds for a $1 billion stadium modernization - a deal with the American investment fund Sixth Street helped. The splendid performance is especially notable against the stagnation of competitors from Barcelona, whose debt exceeds $1.5 billion.

Perez set limitations for contenders for his position

Arguing with Perez is dangerous. The current coach, Carlo Ancelotti, learned this lesson well when he was fired from Real in 2015 for substituting Gareth Bale in one of the matches against the president's wishes. In 2021, the Italian returned to the club. It no longer made such mistakes - so much so that in 2023, during the epidemic of injuries, he stated that there was no need to go into the winter transfer market. All because Florentino is negative about mid-season transfers. Carlo's reward for excellent work in the last three seasons and loyalty to the boss was a new contract until 2026 with the possibility of staying in the club in another position after its expiration.

Florentino rules confidently and is not afraid that a bold competitor, like himself almost a quarter of a century ago, will appear and dethrone him. Tricks with the transfer of Figo or another superstar will be of little use, significantly since in 2012 Perez amended Real's statutes. Now, the main criteria for candidates are having a club membership for at least 20 years (previously 10 years) and having funds in one of Spain's banks, equivalent to 15% of the club's budget. Formally, this protects Real from possible expansion by wealthy individuals from the Middle East. In reality, it safeguards the incumbent president from any encroachments on the position.

Journalists have repeatedly tried to find compromising material on Florentino but without success. In 2022, the president won a lawsuit against the El Confidencial publication, which published scandalous audio recordings where Perez called Ronaldo and Mourinho "greedy idiots" and Raul and Casillas "the biggest scammers in the club's history." The examination determined that the recordings were taken out of context, after which the court banned El Confidencial from publishing any materials related to Perez's personal life. The Real boss sought a symbolic sum of 1 euro from the publication.

But so far, the primary victory in court for the 76-year-old Florentino was at the end of 2023 when the EU court declared UEFA's ban on clubs participating in the Super League illegal. This project is considered Perez's brainchild, and if it is ever destined to come to life, the president of Real will solidify his status as the leading revolutionary and reformer of European football.

Published by Patrick Jane