Florentino Perez has never been particularly well liked by the media and fanfare that surrounds Real Madrid. There appears to be no singular reason as to why this is, but whenever the slightest thing goes wrong in the Spanish capital, a production line of articles are pumped out across the mainstream media blaming Madrid’s president for the club’s latest misgiving. As a by-product of a historically bad season for Real Madrid, finding anyone actively backing Florentino Perez these days is like trying to find one specific piece of hay in the largest haystack you can imagine. As naive as it would be to claim that Florentino Perez is a saintly figure that can do no wrong, the current depiction of him as a power hungry politician leading a club with no long term direction is also incorrect.
In fact, Real Madrid’s current president is a rather under-appreciated figure in the club’s history, particularly with respect to the financial stability he has brought the club. For much of its history, Real Madrid have struggled to manage its finances. Although Santiago Bernabeu’s economic model initially enabled Madrid to buy the world’s best players without concern, the spending eventually caught up with Madrid. This is captured in one particular exchange between Bernabeu and his loyal vice-president, Raimundo Saporta, in the 1960s as the club persistently battled with debt despite on-field successes. In 1962, Madrid were forced to sell Luis del Sol to Juventus to lower their debt, upon doing so Saporta informed Bernabeu that the club was on the verge of bankruptcy and “there’s no other del Sol to sell”.
Madrid continued to teeter this fragile line for much of the 20th century. Florentino Perez’s presidency was preceded by two particularly damaging ones in the 1980s and 90s. Firstly, Ramon Mendoza who was elected in 1985 and oversaw the Quinta del Buitre era in Madrid. Despite on field success, Mendoza was forced to resign in 1995 due to unreported debt of 13,000 million pesetas (72 million euros). Lorenzo Sanz continued to oversee on field successes, notably capturing the long awaited Septima and Octavo titles. However, financial trouble continued to brew behind the scenes, though Sanz and his board chose to hide these failings in their reports.
Perez decided to run for president after he discovered Madrid had sold out just one home game in the 1999-2000 season despite their on pitch successes. He polled socios and discovered, like him, they were concerned about the club’s financial health. Standing up to the Sanz board in regards to finances and promising the signing of Luis Figo was enough for him to win the presidency.
Upon taking control he was able to see the true extent of Madrid’s financial failings. The official club report for 1999-2000 reported 164 million euros in revenue and a profit before tax of 2.4 million. As he had correctly suspected, the club had hidden their debt on the official reports and its actual revenue was 118 million euros and that it was recording a loss before taxes of 23 million euros. Had this been allowed to continue, Real Madrid would have to become an SAD under Spanish Law and would have been taken out of the ownership of its socios (club members).
To save the club, Perez pledged 147 million euros in loans for signings, of which only 30 million was required by law. He then played his cards cleverly in the sale of the Ciudad Deportiva to local corporations (not to the city council as many media outlets report), having the city council allow skyscrapers to built on the land and, as a result, raising its value before selling it. The money made from this sale took a massive chunk out Madrid’s debt and financed much needed renovations of the Bernabeu. Today, Real Madrid is the image of financial health and among the most profitable teams in Europe according to their recent financial reports.
Often criticised for being short sighted, it was Florentino Perez who wrote Real Madrid’s club statement and responsibilities through the consultation of the socios and despite popular belief, the Spanish businessman is persistently seeking the consensus of his board of directors which features of people Perez has worked with previously and club legends such as Emilio Butragueño.
It hasn't all been smooth sailing. The sacking of Vicente del Bosque and the signing of several post-peak Galaticos were notable errors made in Perez’s first tenure at the club. However, Perez and his board have learned from their mistakes and that is reflected in many of their decisions since 2009. Madrid now invest more in younger players both from within the club and abroad and are notably more patient with the dressing room than during the first Galacticos era. On the coaching front, Perez and his board have attempted to hire managers that fit Del Bosque’s silent authority style of management.
The board also now recognize the importance of a successful playing career and have taken steps to have a succession line for the Bernabeu hotseat by giving young managers like Guti, Xabi Alonso and Raul their coaching bows in the Madrid youth teams.
From the brink of bankruptcy, Real Madrid have won 41 titles under Florentino Perez and have enjoyed the sort of financial stability and institutional stability that hasn't been seen since the height of the Bernabeu era. The board’s decisions haven’t always worked, and this season saw a number of mistakes being made. However given their superb track record, Florentino Perez and his directors deserve both patience and respect from Real Madrid fans and some trust that they can bring this team back to the very top once again.