The column ‘Finance Football’ tackles the economic aspects of the world’s favorite pastime, taking a closer look at the commercial side of the game. In the Third edition we look at Florentino Perez, the creator of Real Madrid’s Galactico policy and engineer of some of the biggest transfers in football. The prototype for the modern day football sugar daddys. How Perez is using expensive vanity signings to maintain a stronghold over Madrid. A presidency built upon unfulfilled promises where ever-escalating transfer fees take precedent over the sporting aspect of the project.

The clash of the Titans is just around the corner, which is always a good enough reason to take a look at Spain’s two biggest clubs. Come El Clasico the football world is divided into two fractions, pro-Barcelona or anti-Madrid or vice versa. There’s a certain arrogance, if only perceived, emanating from the Spanish capital club whereas FC Barcelona has been used as a vehicle to promote Cataluña’s push for independence. Subsequently alienating fans in the process who are either neutral on the matter or not Catalan.

There have always been tensions between the two clubs, after all each strives to be the most dominant side domestic and abroad. However, the animosity reached an all-time high (or low depending on one’s perspective) during the Jose Mourinho’s tenure at Real Madrid. Though Los Blancos played some ruthlessly effectively, and at times exciting brand of football, the self-styled Special One oftentimes found himself at the center of controversy, especially when FC Barcelona were the opponents.

Desperate times call for desperate measures, or so the saying goes. Frustration is usually the byproduct of underachievement. Well, sometimes it’s homemade. Ever since Real Madrid’s president, Florentino Perez, green lit the first Galactico project the Spanish capital club has been under pressure to deliver the 10th Champions League title. In all fairness it must be noted the Merengues did win one Champions League trophy in two terms of Perez thus far (2001-02).

Unlike many of his colleagues Madrid’s Perez is a rather visible official. He seldom let the opportunity pass to stress the grandeur and importance of his club, usually at the (annual) unveiling of a highly expensive signing. A Perez speech typically features adjectives such as best, great, and important. Further, according to him the players he signs were meant to play for Los Blancos or as Mr. Perez so eloquently put it “born to play for Real Madrid.”

One of his more interesting (scandalous?) signings was Luis Figo – at that time a FC Barcelona player. True to form Perez declared Figo was born to play for Madrid, which further soured the relations with la Blaugrana and their supporters. The little fact that Figo wore Barcelona’s jersey for five seasons prior to joining the Merengues didn’t interefere with Perez narrative.

The then-record €60 million transfer of Luis Figo from Barcelona to Madrid served as the catalyst for Perez vision of a dominant football team: the Galacticos.


Since 2000, Real Madrid has spent more than €1 billion (€1,32 billion) on new players. In comparison FC Barcelona’s accumulated expenses for transfers “just” amount to a little under €870 million (€867,4 million) or 34% below the benchmark set by Los Blancos.

Excluding Ramon Calderon’s presidency during the middle of the 00’s, Perez’ Madrid still record a hefty bill of €1,01 billion to Barcelona’s €650,5 million. Coincidentally the margins remain the same (the Blaugrana are off 34%).

In Perez two terms thus far Real Madrid has won the Champions League 1x, La Liga 3x, the Copa del Rey 1x, plus 3 Supercopa titles.


During the 4 years the presidency of Perez overlapped with that of Barcelona’s Joan Laporta (2003-2005, 2009), the construction magnate sanctioned transfers worth €267,6 million net (+31%) to the Catalan politicians €185,6 million. Yet, the bulk of Perez expenditure (58%) was spent during the 2009 summer transfer window when the reelected president signed off on the biggest shopping spree in football history (€257,4 million gross).

Expenditure Net

At the time Laporta was elected Barcelona’s president he found the club in an unfavorable position, both financially and sporting-wise, which makes his accomplishments all the more impressive. Picking upon Perez rhetoric, Laporta didn’t necessarily buy the players that were “born to play for Barcelona” but the ones the club needed, if only for a limited amount of time.

Expenditure Gross

Unlike Perez whose initial spending was offset by the dubious sale of Madrid’s old training ground at an overinflated price (to the tune of almost €450 millon), Laporta had to reshape the club after the previous Barcelona administration(s) had spent a little over €200 million gross (€94 million net) on largely ineffective players.

Though Perez had a 3 year head-start on his Catalan counterpart, and spent close to a third more money on transfers (€82 million net) his Galacticos didn’t best Laporta’s Barcelona.

Laporta presided over 1 Champions League triumph, 3 La Liga titles, 1 Copa del Rey, 1 Club World Cup, in addition to 3 Supercopa while Perez was in charge of the Merengues. The original Galacticos and the second inception of that team (2009) didn’t win any trophies during that timeframe.

Perez also hasn’t fared better against Laporta’s successor, and current Barcelona president, Sandro Rosell (2010-????). From 2010 onwards Real Madrid has spent €341 million gross to Barcelona’s €235,5 million, outspending the Catalan outfit by 44%. After deducting player sales though the margin actually increases to 58%. Largely because even though Madrid generated €157,5 million in sales, Barcelona recouped more (€119,4 million) – relatively – due to their “smaller” initial outlay.

Although the pair (Laporta and Rosell) don’t see eye to eye nowadays, their track record, at least as far as recruitment is concerned when directly pitted against Florentino Perez is surprisingly similar. Both have spent almost the same amount of money on transfers (Laporta: €235,4 million; Rosell: 235,5 million). Yet the latter’s coverage ratio is better at 50,7% to Laporta’s abysmal 21,1%. Still, Laporta inherited a team in transition while Rosell took over his frenemies legacy, which included quite a few assets (Lionel Messi?).

Revenue through player sales is the only area that Perez is able to trump over his Catalan colleagues, as his all-time coverage ratio in the transfer market stands at 61,5%. And 61% in direct comparison to Laporta’s 21,1%, 54% to Rosell’s 50,7%.

Coverage ration notwithstanding, Perez can only lay claim of being the second best president in Spain, from a purely sporting perspective. His Madrid side won 1 La Liga title, 1 Copa del Rey, plus 1 Supercopa. In stark contrast to Rosell whose Barcelona won 1 Champions League trophy, 2 La Liga titles, 1 Copa del Rey, another Club World Cup plus 3 Supercopas.

Though Perez didn’t assemble a bad team by any means – he certainly did buy the best money can buy – his Madrid outfit hasn’t lived up to the Galactico bill thus far. Frankly, while Madrid hasn’t exactly underperformed, they haven’t been able to meet (their) expectations either. Perhaps the players that were born to play for Madrid aren’t good enough to dethrone Barcelona after all?

Revenue Growth (Deloitte)

Although Real Madrid’s on-pitch exploits during two terms of Perez still lack behind that of Barcelona, Los Blancos revenue stream has grown significantly under the Spanish billionaire. Almost all clubs that won the Champions League since 2000 have been featured in Deloitte’s Football Money League except Porto.

Deloitte Money League

Furthermore, Real Madrid is the first club in all of sports to have generated annual revenues in excess of €500 million (€512 million for the 2011-12 season). Nevertheless, Barcelona aren’t too far behind at no. 2 with €483 million (-6%).

Revenue Growth Percentage

The reference points for Barcelona and Inter Milan start with the 2001 and 2002 figures respectively. Out of all Champions League winners since the turn of the millennium, Madrid has had the biggest increase with 371%, but only 16% ahead of Barcelona. Of course it’s relative to the previous size of their turnover, meaning if, say, AC Milan were to triple their revenue within the next 10 – 15 years they don’t automatically approach the levels of Real Madrid. Barcelona, however, are in close proximity to their domestic rivals.

From 2000 onwards the respective turnovers of the Champions League winners have grown at least 114% (222% on average, but that’s due to the math. In reality it’s closer to 160% give or take). Serie A has lost much of its appeal in the wake of the Calciopoli scandal in the mid-00’s which is one of the many reasons why the Italian sides such as AC Milan or their inner city rivals Internationale couldn’t take advantage of their Champions League glory. Conversely, Real Madrid has successfully increased their turnover despite not featuring in a Champions League final in quite a while, but in conjunction with the ascension of Spanish football as a whole.

Wickedly enough, Barcelona recent dominance coincided with Spain’s rise in international football, as it is the Catalan club that provided the backbone for the sides that won a World Cup in between back-to-back European Championships.

If adjusted for the 2003 figures (when all teams outside of Porto made the Deloitte list and Joan Laporta was elected Barcelona’s president) the graphic would look significantly different.

RG 2003

Apparently 3 years account for a lot in football. Not only would Madrid’s growth shrink (if that’s the right word anyway) from 371% to 217% (-42%), Barcelona’s also drops albeit not as steep as los Blancos from 345% to 286% (-20%), FC Bayern would actually gain 3% to 213%. The English and Italian clubs perform all to their previous levels, except Chelsea who also take a massive hit in comparison to the increase between 2000 and 2003.

Champions League Finalists Since 2000

The teams that have won the Champions League since 2009 have spent a combined €1,04 billion gross (€677 million net) on player transfers. That would equate to a little under €40 million gross on new recruits per side that has reached the Champions League final, or €26 million net.

Aside from the odd fact that all home sides have won the tournament, the winners spent a combined €544 million gross (€412 million net) on player transfers. If that sum were to be spread among the winning teams, one would arrive at a total of €42 million gross (€32 million net) per club.

Only twice has Florentino Perez spent less than that figure on new players (2003, 2012). On the contrary, Perez regularly spends more than any given Champions League winner (€57 million, +78%) minus the trophy at the end of the season of course. Barcelona on the other hand has spent €36 million (+12%) annually, in a comparable timeframe and won the lot twice (2006, 2011).

When taking all into consideration there’s nothing really exceptional about Florentino Perez presidency, or the Galactico project in particular. On the pitch his sides have been outperformed by Barcelona, in Spain and on the continent. Off the pitch Madrid may have been the first club to generate revenues in excess of €500 million, automatically qualifying for the no. 1 rank in the Deloitte Football Money League. But none of his accomplishments manuvered Real Madrid in an outright dominant position. Barcelona’s annual revenue is just 6% off Madrid’s, sans the yearly extravaganzas Florentino Perez administration has become known for.

Florentino Perez Real Madrid is big on statements but surprisingly low on substance. After more than a decade (with interruptions) in office, the repetitive tune of Perez “we are the best” is wearing thin on the ears of many. 1 billion in player acquisitions and Perez vision of a Galactic future hasn’t materialized yet, except an intergalatic bill.

Long live the King, ahem, president.

Read “Financial Analysis On Perez’s Galacticos Policy And FC Barcelona’s Rise | Part 2″ here