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Florentino Perez: How to Make Millions From a Football Club

Florentino Perez is perhaps the most famous president in Real Madrid's history. He is power-hungry, ruthless and, above all, desperate for success.

by Fran Alameda
27 May 2016, 11:39am

Reuters/Sergio Perez

Florentino Pérez cannot be understood without Spain, and the country itself cannot be understood without people like Florentino Pérez. The president of Real Madrid has reached the pinnacle of the footballing world thanks to being a skilled businessman, a cautious diplomat and, more than anything, incredibly well connected.

"Spain works via the telephone" a prestigious Spanish writer once said. By taking heed of those words, Florentino has become one of the most important characters in Spanish football – and, by extension, in Spanish society as a whole.

But where did Florentino Pérez come from? And how did he become president of Real Madrid? Despite his notoriety, very few people are aware of his background. Florentino studied civil engineering at the Polytechnic University of Madrid, and worked for the government in his early years. He flirted with politics, before turning all of his attentions to business.

Pérez started out working for Madrid city council, where he initially had a minor administrative role; he was tasked with overseeing a less-than-exciting project on Spain's public roads. Soon enough, he was offered a position in the Ministry of Public Works and Transport. He was already climbing the greasy pole, though he still had a long way to go to reach the top.

A young Florentino Perez // Via Wikipedia

In spite of his promotion, Florentino was far from satisfied. It was then that the young engineer decided to venture into politics, and was elected as the general secretary of the newly founded Democratic Reformist Party (PRD). He didn't last long in his new career; after the 1986 Spanish elections, the PRD was dissolved. The party didn't receive enough votes to earn themselves a representative in parliament, and Pérez decided to pursue his ambitions elsewhere.

Florentino made a bold decision; he jettisoned a life in politics for an even more cut-throat existence. He chose to enter the world of business, and take on a whole new challenge. With a small group of friends, he purchased a small, bankrupt construction business called Padrós and managed to make it profitable. Though he might not have known it at the time, he had laid the first stone of what was to become a multinational corporate empire.

Pérez spent the following years growing his business, exploiting Spain's booming construction industry and procuring numerous contracts for his new company. For better or for worse, that company has been one of the driving forces of the Spanish economy over the past few decades.

In 1993, after merging Padrós with another large company, Florentino became a major player in global business. It was then that he created ACS – now one of the biggest construction companies in the world.

In light of his financial successes, Pérez decided to throw his hat in the ring for the vacant presidential position at Real Madrid. It was 1995, and incumbent president Ramón Mendoza was under massive pressure after disclosure of the club's extensive debts. Unfortunately for Pérez, his first attempt to wrest control of Real failed. An election was held, and Mendoza won by 699 votes. Accordingly, Pérez turned his attentions back to ACS. Nonetheless, his thirst for power was anything but quenched.

All in all, then, Florentino began his career in the public sector, tried and failed to move into politics, and finally succeeded in the world of business. He'd had limited success in public life but, ironically, he was about to propel himself to fame and fortune on the back of public funds.

Even after his initial attempt to take over at Real had been rebuffed, Florentino continued to flirt with power. In both business and football, his hunger for prestige and influence was insatiable. In 2000, whilst still in charge at ACS, Pérez decided to go for the Real Madrid presidency once more. It was then that he made the boldest of gambles; the move which would make him famous, and see him fulfil his dreams of grandeur.

That gamble was, of course, the transfer of Luis Figo.

Figo signs for Real Madrid // Reuters/Desmond Boylan

It was the summer of Euro 2000, and Figo was at the peak of his career. He was Barcelona captain at the time, and an icon at the Camp Nou. With complete disregard for all this, Florentino announced that – should he become president – he would sign the Portuguese midfielder from Real's great rivals.

Behind the scenes, Florentino struck a deal with Figo's agent. He sought assurances that Figo would consent to the move, while the details of the transfer were tacitly thrashed out. If Pérez should lose the presidential election, it was agreed that Figo would receive generous compensation. Thinking that Pérez had no chance, Figo's agent agreed to his terms.

When Pérez announced his intention to sign Figo, Real Madrid fans ­– feeling something between excitement and disbelief – voted for him in their thousands. He won the election against Lorenzo Sanz, and immediately met Figo's transfer clause. Barcelona were helpless to intervene and – for around €50m – their talisman moved to Madrid. Pérez had checkmated all his opponents at once, and he had only just made his first move.

When Florentino took charge of the club, he inherited serious money problems. Real Madrid were in debt to the tune of €300m; a solution needed to be found, and quickly. Pérez was able to save the situation, though he had to revert to drastic measures. He made some controversial decisions in his efforts to rid the club of its financial burden – decisions which are still questioned in some quarters today.

Perhaps his most contentious decision was the sale of land owned by Real Madrid in La Castellana Avenue, very near the heart of the city. The club sold this plot of land for approximately €500m, after it had been conveniently acquired from Madrid city council.

With lots of new money and fresh ideas – all the players' image rights were transferred to the club, for instance, which ensured some seriously hefty income for Madrid – Pérez was able to enact his infamous 'Galácticos' policy, which lasted from 2000 to 2006.

David Beckham became a Galáctico in 2003 // Reuters

The 'Galácticos' team – Ronaldo, Zinedine Zidane, Roberto Carlos, Luis Figo, David Beckham and the rest – brought major silverware to the club, including two La Liga titles and two Champions League triumphs. Meanwhile, Real Madrid grew exponentially off the pitch. The club was commercialised at every level, and marketed to the extreme.

To understand Florentino, one must understand his way of thinking. Though he had brief encounters with centrist political parties like the DRP and UCD – both of which have now been dissolved ­– he has always had links to the Christian conservative Partido Popular (PP). The PP is associated with both the Spanish right-wing and the elite. Pérez's ideology can be summed up in three words: business, money, and power.

Florentino's relationship with the PP has got him into trouble on more than one occasion, although no illegal dealings have ever been uncovered and he has never been charged in a court of law. Nonetheless, his relationship with the PP can be summed up by a judge's statement from a court case related to Operación Púnica, one of the largest corruption cases in Spain's recent history.

Pérez was summoned to appear in court, on the grounds that mysterious payments were made from Real Madrid to a small company which managed social networks. Unfortunately, that company was owned by a man with strong connections to the PP – a man who was later found guilty on corruption charges.

Florentino admitted to knowing about these payments, but told the court that they had nothing do with the PP. Shortly after, Real Madrid cut ties with the business and signed a new deal with another company – a deal worth a hundred times more than the original.

"There is something I can't put my finger on here", the judge was reported to have told Pérez. That certainly seems to be the general feeling about Pérez's political dealings, though it's hard for anyone to say any more than that.

The network that connects Florentino to the upper echelons of the Spanish establishment may be hard to put one's finger on, but that doesn't mean it isn't entirely tangible. Take a quick glance at Real Madrid's presidential box, and one sees a multitude of bankers, politicians and businessmen. Men like this attend games every couple of weeks. Pérez likes to surround himself with important people.

Florentino greets former Spanish president José María Aznar // Via YouTube

It must be said, though, that the people who visit the VIP areas of the Santiago Bernabéu are not always respectable. As well as outspoken journalists such as Eduardo Inda, high-profile judges like José Manuel Siera Míguez and even ex-presidents – José María Aznar, for instance ­– Real's presidential box has also hosted dubious characters like Gao Ping, a major player in Spain's Chinese mafia.

Pérez's relationship with the media is another key to his success. Journalists are usually rather pleased to get an invite to presidential box at the Bernabéu; Florentino spends a great deal of his time chatting with them, and is not above leaking sensitive information to keep them onside. In return, he will quietly censor bad news. Reports tend to flatter Real accordingly.

Florentino's influence has grown to such an extent that he has boasted – amongst friends – about the changes he's been able to make to the draft of the Ley Mordaza, one of the most controversial recent laws in Spain. Florentino can even claim to have a law named after him; a change to the rules of corporate governance was practically tailored for Pérez back in 2011, allowing him join the board of directors at Iberdrola, one of Spain's most powerful energy companies.

At Real Madrid, Florentino's power is now absolute. He has complete control over all of the club's media outlets, and runs a well-oiled propaganda machine. Thanks to his extensive contacts in the industry, he makes sure that journalists tow the party line. He surrounds himself with hacks who adore him, and ostracises all those who have the audacity to criticise – or even question – his methods.

Florentino doesn't like people who challenge his power, hence his fractious relationship with Jose Mourinho // Pool Pix

Pérez has even managed to twist the electoral procedure at Real Madrid to his advantage: those running for presidency now face absurd requirements, such as vast financial guarantees, more than twenty years of club membership and a massive amount of personal wealth. Pérez has made certain that only he can win an election, though the façade of democracy remains.

The only fans who dared to question Florentino's regime were Ultrasur, a group of radical – and occasionally violent – supporters. These ultras were opposed to his autocratic management of the club, and disagreed with many of his decisions regarding the team. They were even known to boo him at matches, though such shows of discontent are hardly uncommon at Real Madrid.

Nevertheless, Florentino didn't take too kindly to the criticism. He used a couple of violent incidents as the pretext to ban the group from home matches. Similar incidents hadn't seemed to bother him before, but all of a sudden Ultrasur's violent fringe became public enemy number one. It wasn't enough to simply ban the ultras; he took away their power by disassociating them from the team. The Spanish football community admired the move, and gave Pérez their full support.

Florentino had come out on top once more.

Pérez is a man who is used to getting what he wants // Reuters/Sergio Perez

Using all means necessary, both by flattery and by force, Florentino Pérez has become the undisputed ruler of one of the largest, most powerful football clubs in the world. When his personal influence hasn't cut it, Florentino hasn't hesitated to use his money. In the end, all of his rivals have either sided with him, or been destroyed.

Pérez summed it all up himself when he said: "I am powerful inasmuch as I am president of Real Madrid". The president of Real Madrid is a very powerful man, and Pérez most powerful of all.

@Fran_Alameda

Translated and edited by Andreu Navarro López and Ross Skilbeck