Kylian Mbappe has been on Real Madrid's wish list for several years now. Photo: Getty Images/Anadolu
Florentino Pérez, the grand old man of Real Madrid, left little unsaid when he laid out his worldview at the club's general meeting, which – as happens with people of a certain age – turned into a list of people and things that he doesn't love.
UEFA, Javier Tebas, La Liga private investment deal with CVC, referees, Var, new Champions League format, Tebas again. They are all subject to the wrath of the 76-year-old, who has ruled European football's most successful club for 20 of the last 23 years but has recently been unable to withstand huge changes in the financial situation. The European Super League was Perez's last card and he played it poorly. Yet he still holds it, bent and worn, hoping that one day it will be part of a winning combination.
Perez is so opposed to UEFA that he likened it to European football's “unprecedented institutional crisis.” in his opinion, this is Kodak's commercial obsolescence. “The Super League,” he said on Saturday, “is needed now more than ever.”
He believes the European Court of Justice will rule on December 21 in favor of UEFA opening up its competition and licensing the Super League, although not everyone shares that view. The club reported a profit again this month, but its balance sheet is buoyed by huge sales of future earnings – the infamous financial leverage, or “palancas” as they are called in Spain.
Another attack by Perez on the status quo from a club that was once the establishment. What's going on here? Perez knows he has some tough decisions to make. Not least what will happen next summer, when it finally becomes clear that the main prize that Real Madrid have been striving for for so long – Kylian Mbappe, arguably the best footballer in the world – is out of contract. This is the moment Real Madrid have been waiting for, and yet everything seems simple.
For Florentino Perez, nothing seems simple. : Shutterstock /Fernando Alvarado
Last Saturday, a simply strange official statement was made by the club, in which Real denied the start of behind-the-scenes negotiations with Mbappe's team. Considering that this was due to dubious reports that regularly appear in the Spanish media, it could easily have been ignored.
This week, radio station Cadena Ser, not known for rocking the boat, solemnly reported that Mbappe might not be joining Real Madrid after all. His salary demands, the report says, would be too high. Meanwhile, in an interview, Paris Saint-Germain president Nasser Al-Khelaifi, himself recovering from surgery, spoke optimistically about Mbappe and his “legacy” to PSG.
Mbappe could still leave, perhaps even to Real Madrid. He may extend his contract with PSG. A decision will most likely be made in the spring. Everyone seems to agree that Mbappe will go where he believes he has the best chance of winning the Champions League. He would love to be part of the first team to do so at PSG, but if that seems unlikely, he will leave and it won't necessarily be a move to Real Madrid.
Subject to free agency, salary requirements , will probably be around the euro. 70 million a year, few could afford Mbappe, even in the Premier League. As for Real Madrid, this question is even more relevant.
The club are not the biggest payers in European football, as they were when they disrupted the transfer market at the turn of the century, during Perez's first spell as president. Jude Bellingham's first contract did not make him the club's highest paid player, although his second certainly will. Mbappe's wage demands will put extreme pressure on Real and force Bellingham to raise their demands. And all this at a time when their finances are already on the verge of collapse.
Real Madrid didn't sign Mbappe, but they have Jude Bellingham in their ranks. Photo: Getty Images/Helios de la Rubia
The AGM voted to grant another loan of €370 million and, with debt mounting, Perez now appears to be proposing huge changes to the club's 121-year-old member-owned constitution. Few details are given, but he mentioned a corporate restructuring in which Real would likely secretly privatize itself by selling off parts of its IT division as subsidiaries, just as Barcelona did.
It is significant that one of the first questions at the general meeting from a YouTube blogger concerned the 70 million euros (£61 million) from player sales included in the club's financial forecasts for next year. The warning, leaked ahead of Saturday's meeting, has become a source of concern for Real Madrid's legion of online fans who have done their best to ignore the club's financial realities.
This was one of many signs indicating financial strain. Last summer, Real Madrid sold 30 per cent of the proceeds from the redeveloped Bernabeu stadium for €360m (£306m) over 20 years to US investor Sixth Street. Previous agreements for the sale of future earnings, concluded in the 2017-2018 financial year, were entered into with another US investor, Providence. The club accounts for this profit as income, and UEFA treats it as debt.
The Telegraph reported in July that €122m (£103m), 20 per cent of Real's costs, were not included in last year's financial results. The club has always refused to clarify what these expenses are used for, the subcategory “other operating expenses”, and specifically whether this is a repayment on the sale of future revenue streams.
Debt The stadium renovation project is an additional cost and amounted to 1.2 billion euros, of which only 800 million euros are covered by the initial financial commitment. In May, Real lost an arbitration in Paris with Abu Dhabi energy giant Mubadala over a €400 million stadium naming agreement from 2014 that the club had tried to secure. The amount is almost equal to the 370 million euros in new loans that members are being asked to approve.
For many, the size of the debt is too large to even contemplate. The numbers don't mean much, but everyone is noticing the impact they can have on a club's transfer summer, especially when it comes to Mbappe.
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