COLUMN: Real Madrid – The Richest Victim in Spanish Football

At Real Madrid's annual general meeting this weekend, club president Florentino Perez gave a speech full of confidence… and some contradictions. Announcing €1.073 billion in revenues – the highest in the club's storied history – Perez underlined Real Madrid's position as one of the most powerful institutions in global sport. Yet his speech soon devolved into portraying the club as a beleaguered entity, threatened by forces ranging from voting irregularities at the Ballon d'Or to the 'monopolistic' control of European football by FIFA and UEFA.

In his criticism of the Ballon d'Or voting process, Perez pointed to perceived criticism from Vinicius Jr. as evidence of a flawed system. He advocated more selective voting, but did not address why a club as influential as Real Madrid could not overcome such prejudices. Elsewhere, Perez's criticism extended to LaLiga and its president, Javier Tebas, whom he accused of proposing policies that would divert revenue from clubs through his controversial CVC deal.

The meeting also celebrated Real Madrid's ambitious renovation of the Santiago Bernabeu Stadium, a project Perez described as transformative for the club's future. Although the new venue has already begun hosting concerts and other events, Perez acknowledged that these revenues remain modest (just 1% of the club's total revenues). You then wonder why the club would have so much trouble organizing concerts in the first place, if their impact is so small.

As Perez outlined both the triumphs and the challenges, his speech revealed a paradox at the heart of Real Madrid's story: a club at the pinnacle of success, yet consistently portrayed as needing protection from outside forces . Whether this framing reflects a genuine concern or a strategic stance to persuade socios [members] remains a question for Real Madrid fans to ponder.

La Liga is embroiled in a legal and political battle over the multi-billion euro deal with CVC Capital Partners, a private equity firm. The conflict stems from the outright refusal of major clubs – FC Barcelona, ​​​​Real Madrid and Athletic Club – to support the agreement, raising questions about its legality and feasibility. At one point, CVC reportedly considered pulling out of the deal entirely, prompting La Liga president Javier Tebas to take decisive action.

To strengthen the legal basis of the agreement, Tebas and his team began lobbying Spain's Higher Sports Council (CSD) and political parties to change the country's sports law. These proposed changes were intended to address two important issues. El Confidencial reported that Tebas was trying to secure stronger control over La Liga broadcast rights. This would have allowed La Liga to push through the deal and ignore opposition from the dissenting clubs. Secondly, the proposed changes include a clause that would give La Liga the power to ban players registered in a future European Super League from also playing in the Spanish league.

Initially, it seemed that Tebas had successfully gained support for these amendments. In 2022, members of Spain's Socialist Workers' Party (PSOE) and the conservative Popular Party (PP) appeared to support the changes. However, this agreement fell apart as both sides eventually withdrew their support. Whether Perez directly influenced this shift remains unclear, but his strong opposition to the CVC deal and continued efforts to promote Super League have likely played a role in the political dynamics.

This controversy over the CVC deal in La Liga highlights the clash between collective decision-making and individual club autonomy. La Liga's power to sell broadcast rights as a collective should benefit the league as a whole, allowing smaller clubs to share in the revenue generated by global brands such as Real Madrid and Barcelona. With 38 of the 42 clubs in Spain's top two divisions backing the deal, this raises the question of whether the refusal of a few clubs – mainly Real Madrid, Barcelona and Athletic Club – should be enough to block the deal.

However, Florentino Perez's concerns about autonomy do have some validity. Forcing clubs to sell a share of broadcast rights without their consent sets an arguably dangerous precedent for Spanish football. Real Madrid and similar clubs argue, as usual, that they contribute disproportionately to the value of La Liga and should have the final say over their assets.

At the heart of Perez's story at this weekend's General Assembly is a proposal to change Real Madrid's structure into a sociedad anonima deportiva (SAD). This change will reportedly protect Real Madrid's fan ownership model. Let's take a deeper look at what this means.

The introduction of the SAD structure in Spain in 1990 was a response to the poor financial condition of many professional sports clubs, especially football teams, in the 1980s. At the time, Spanish football clubs were generally organized as member-owned entities (clubes deportivos), without shareholders or external owners. While this model promoted a strong sense of community and fan involvement, it also left clubs vulnerable to poor financial management and unsustainable debt.

In the late 1980s it became clear that many clubs were struggling to balance their books. The popularity and commercialization of football had grown significantly and clubs were under increasing pressure to compete on the European stage. This led to reckless spending on player salaries and transfer fees, often without the necessary financial planning. As clubs built up large debts, some clubs were at risk of bankruptcy. Furthermore, the lack of standardized financial controls made it difficult to regulate the sport or hold club directors accountable for mismanagement.

In response to this growing crisis, the Spanish government, led by the Ministry of Education and Culture (responsible for sports at the time), decided to intervene. The solution was to implement the SAD structure through the Ley del Deporte (Sports Law) of 1990. The law aimed to professionalize the management of sports organizations by transforming clubs into joint-stock companies. This would ensure greater transparency, introduce corporate governance and establish financial accountability mechanisms.

Under the new system, clubs in the two top tiers of Spanish football (La Liga and Segunda Division) had to become SADs unless they could prove they were financially solvent and well-managed. A handful of clubs, including Real Madrid, FC Barcelona, ​​​​Athletic Bilbao and Osasuna, met these criteria and were allowed to keep their traditional structures. However, most other clubs have switched to SADs, with ownership shifting from fans to shareholders.

This was a turning point in Spanish football. On the one hand, it imposed financial discipline on clubs, preventing insolvency and encouraging better management practices. On the other hand, it also marked a shift towards the commercialization of sport, with clubs increasingly seen as businesses rather than community-owned organisations.

Perez has interpreted the recent debates over changes to the club's structure as a necessary defense against 'external threats' such as the controversial La Liga-CVC deal. According to Perez, these changes would prevent La Liga president Javier Tebas from selling Real Madrid's share of the competition's broadcast rights to CVC without the club's consent.

Currently, Real Madrid is a socially owned club, meaning that the club is fully owned by its members. Perez's proposal is intended as a protective measure, but it is still unclear how exactly it would protect the club's broadcasting rights more effectively than the existing model. In fact, Real Madrid's membership structure has arguably been a bulwark against external pressures, including the CVC deal.

Perez promises that the new SAD structure will still be 100% owned by the society, with shares tied exclusively to current members, but the lack of details on this plan leaves room for doubt. Even if his promises hold, the transition to a SAD could open the door to third-party investment in the future, especially in times of financial instability – a risk Perez has not yet fully addressed.

The prospect of switching to SAD is not necessarily bad. Clubs such as Bayern Munich and Benfica have successfully implemented hybrid models where fans retain majority ownership while allowing private investment. Such a system could help Real Madrid raise capital and remain financially competitive without sacrificing its identity. However, Perez's approach was anything but transparent. By framing the discussion solely around the CVC deal and external threats, he avoids having an honest conversation about the long-term implications of such a structural overhaul.

The socios and fans of Real Madrid deserve more than vague promises and a narrative designed to gain easy approval. A detailed and transparent plan detailing how the proposed SAD structure would function, how it would protect member property, and even how it might evolve under future leadership is fair and necessary to make a well-informed decision can take. The real question may not be whether Real Madrid needs to modernize its structure, but whether this transition is handled with the transparency and accountability that the Real Madrid community deserves.