The feeling of optimism and confidence Madridistas had at the closing of last season slowly evaporated over the course of the summer transfer window. The sale of key players -- Ángel di María and Xabi Alonso -- who were, for the most part, mainstays in the starting line-up over the last four years created significant gaps that must be addressed. Additionally, the departure of other valuable players such as Diego López and Casemiro dented the team's depth. The new acquisitions do not seem to compensate for the outgoing transfers and fail to provide adequate positional cover. While Keylor Navas and Toni Kroos are high quality "replacements" for López and di María, James Rodríguez does not have any unique immediate "fill-in" qualities that can be easily integrated into the current tactical and playing structure. Javier Hernández who should support striking options and variability did not appear to be a first or second choice signing. Alonso's surprise exit left a major hole in defensive midfield.
Mesut Özil's transfer saga at the beginning of last season was a similar situation -- on a much lesser scale -- where the last minute deal for the player to move to Arsenal "threatened" to jeopardize the prospects of the squad. A key difference between this year and last is the suitability of the player(s) in question. When Özil left, Real Madrid were performing relatively well and consciously transitioning to a system where his attributes and style wouldn't be essential. Additionally, Isco (Özil's primary competitor at the time) was in great form reducing the German's perceived value. Fast forward to the end of the season and it became clear that Özil's loss did not critically affect Real Madrid because the evolved (and evolving) system did not have space for him. Perhaps more importantly, the advantages he would bring to the squad in any situation could be replicated by other players on the roster.
The dramatic loss to Real Sociedad sandwiched between the disheartening performances in the Spanish Supercup and the second half breakdown against Atlético Madrid in La Liga has led to many questions being asked about the squad. Can a team that clearly requires a significant amount of time and work be genuinely touted as contenders for La Liga or the Champions League? Due to the sparse nature of Champions League matches and the typically low difficulty of the group stages, it is realistically expected that Real Madrid will be a fairly mature side when the competition enters its most complicated phase. The same logic would apply to the Copa del Rey in principle. Although our participation in the FIFA Club World Cup means we'll play our first domestic cup match in October, the tougher tests should be in the latter rounds commencing in January of next year.
The strength or quality of the squad along with organizational approach are two key factors in assessing the chances of a team in the league (and generally). As aforementioned, important members of the group were lost in the transfer market negatively impacting squad versatility due to a lower number of varied player profiles in the team. While Real Madrid may not be as strong as last year, the ability of its current players still easily place the club in the top tier of European football and should be sufficient to create a winning formula. The other factor, organizational approach, is a combination of the club infrastructure, resources, policies, processes, and coaching methods. Historically, los Blancos have an advantage in many aspects of this element but decision-making impediments (i.e. institutional politics) can undermine the sporting strategic plan. Case in point: Keylor Navas' limited playing time and seeming favoritism for star acquisitions (Kroos and James) are major potential examples of systematic biases.
Finally, Ancelotti bears great responsibility for the individual and overall performances of the team. As the club manager, he is able to influence playing systems and squad optimization to a larger degree than any other individual. He is no longer eligible for the ‘new team' excuse as this is his second year in charge and the familiarization period should be (near) complete. Even if changes to the team aren't necessarily attributed or attributable to him (which is an assumption and could underscore a weakness of his character), he had an entire preseason to prepare and should be well aware of the nature of the Spanish league. The coach has failed to establish a rotational order or experiment with different ideas showing over-reliance on certain players and dogmatic faithfulness to the present tactical structure. Of course, the season has barely got under way so these criticisms must carry an asterisk.
At the face of things however, the current state of the team is not nearly as poor as reports and commentary would suggest. The style and format Ancelotti is trying to impose isn't doomed. Our performance against Atlético Madrid was an improvement over the Real Sociedad match and showed enormous promise. If we can say the second halves in those games proved this system isn't working, we should also be able to say the first halves proved that it can. This is a team comprised of some of the best players in the world whose peak forms are often enough to win matches. The Champions League and Copa del Rey challenges aren't compromised and there should be an expectation to be legitimate contenders in those competitions. However, the integrity of the league campaign is severely threatened and playing catch-up will be a big problem with this level of unsteadiness.