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The new Galacticos
by Paul Kennedy, July 31st, 2009 12:47PM

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TAGS:  international, soccer business, spain

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North American fans were to get a sneak preview of the new-look Real Madrid with superstars Cristiano Ronaldo and Kaka when the Spanish club faced MLS clubs Toronto FC and D.C. United in early August.

The economic crisis has hit Spain hard with its unemployment rate nearing 19 percent in early summer - the highest in the European Union - but you would never tell by the way Real Madrid has been spending money.

In the space of a week in early summer, the legendary club introduced its two newest signings, first Brazilian Kaka and then Portuguese Cristiano Ronaldo. The cost of signing the pair of superstars was $223 million - $132 million to buy Ronaldo from Manchester United and $91 million to acquire Kaka from AC Milan.

Those sums don't include what it will cost Real Madrid to pay their salaries. Their salaries will be an estimated $32 million a year - $18 million for Ronaldo and $14 for Kaka - pushing the overall cost of the deals over the lives of their contacts to more than $400 million.

As soon as the second deal involving Cristiano Ronaldo was announced, the critics pounced.

"We make Ballon d'Or winners," sniped Joan Laporta, president of rival Barcelona, "and others have to buy them."

Forget that both teams have produced five European Players of the Year, and the closest any of them on either team was to being homegrown was Luis Suarez, signed by Barcelona at the age of 19 from Deportivo Coruna. Everyone got Laporta's point.

Spain President Jose Luis Zapatero chimed in, saying Cristiano Ronaldo's transfer fee was "excessive."

"To be honest, I don't like it," added Zapatero, a Barca supporter.

The deals were financed by bank loans obtained by Real Madrid president Florentino Perez, who recently returned to power and has close ties to Spanish banks through Group ACS, the giant construction company of which he is chairman and its principal shareholder. Caja Madrid and Banco Santander are reported to have loaned Real Madrid more than $200 million, prompting one senator, the Catalan Josep Maldonado, to call it "immoral" that banks would freely loan to Real Madrid but not to the many Spanish citizens who were no longer able to get loans during the credit crunch.

Real Madrid has always had support in high places.

In the early 1950s, the Franco government intervened to block the Argentine great Alfredo Di Stefano's transfer from Millonarios to Barcelona, and he ended up - conveniently - at Real Madrid, which he led to five European Cup titles.

When Perez returned to power in June, Real Madrid's debt was approaching $800 million, but no one was stopping Perez. Unlike Manchester United, whose Glazer family unloaded Ronaldo to pay down part of the loans it took out to buy the club earlier this decade, Real Madrid is a non-profit sports organization that depends on the sympathy of its creditors. Don't expect them to be tearing down the White House any time soon.

Heavy spending is nothing new for Perez. During his first tenure as president, Real Madrid twice shattered the world record transfer fee, buying Luis Figo from Barcelona for $56 million in 2000 and Zinedine Zidane from Juventus for $87 million a year later. (Real Madrid financed the purchase of the Galacticos by selling Ciudad Deportiva, the sports complex located on the Paseo de la Castellana, on the outskirts of Madrid, in a real-estate deal that netted the club $600 million.)

"The cheapest player I ever signed was Zidane," Perez boasted, insisting the money he spent on the Frenchman was merely an investment.

Real Madrid estimates Zidane brought in $70 million a year in additional revenue, while his cost - spread over his five seasons - was $50 million a year, meaning he contributed $20 million a year in profits to Real Madrid.

Perez likes to call players like Zidane and David Beckham, signed in 2003, "investment players" - players who were signed because of the money they could make for Real Madrid.

Perez's hope is that Cristiano Ronaldo and Kaka will be the money machines that Zidane and Beckham were for Real Madrid.

But many Real Madrid fans fear that the club will do better at the bottom line than on the field, much like during the Galacticos' era. Madrid won La Liga titles in 2001 and 2003 and its record ninth European Cup title in 2002, but there were no more major championships during the first Perez era.

MADRID'S ALLURE. There was no doubt that Cristiano Ronaldo was happy with the move.

"A childhood dream has come true for me, to come to Real Madrid," said Ronaldo, clad in Real's traditional all-white uniform - hence its nickname, the Merengues - and his new No. 9 shirt, at his presentation to Real Madrid fans in early July. "It's incredible that the stadium is full just for me."

And then to the cheers of 80,000 adoring fans at Bernabeu Stadium, Ronaldo showed off his juggling skills for photographers.

Ronaldo's move to Madrid was more than a year in the making. Former president Ramon Calderon tried to pry the 24-year-old Portuguese away from Manchester United last summer but Manager Alex Ferguson wouldn't budge.

Ronaldo was coming off a 46-goal season in 2007-08 during which he led United to the Premier League and Champions League titles, but his stock would fall as the 2008-09 season went on. Ferguson was concerned about Ronaldo's attitude and his influence on some of the club's younger Portuguese and Brazilian players.

When it came time for Ronaldo to leave, United fans were surprisingly indifferent to the departure of their young star.

Kaka's move to Real Madrid sparked some outrage from Milan supporters - not at Kaka so much as at Milan management. When Milan opened training for the 2009-10 season - that included a four-game tour of the United States - fans protested and threw smoke bombs outside Milan headquarters.

Faced with its own financial issues, Milan received a lucrative offer from Manchester City for Kaka in January, but the 27-year-old Brazilian refused to pull the trigger.

"In January, Milan opened the doors to negotiations for the first time," he said. "I thought that it was not the time to leave. Then at the end of the Italian season, they called me and said there were offers for me. I always said that if one day I left Milan I would like to play at Madrid, because everyone who has played here has told me great things about the club.''

NO JEALOUSY. How will Cristiano Ronaldo and Kaka get along? Both are players who like to attack from anywhere on the field.

"It will be a privilege to play alongside him," Kaka said at his presentation that drew 55,000 fans at the Bernabeu Stadium. "There won't be any rivalry with Cristiano. We are compatible on and off the field. We are experienced players and there is no room for jealousy."

The Brazilian said talent wasn't enough.

"There are many talented players who have won nothing and others with less ability who have been successful," he said. "It is good to have talented players but they have to sacrifice themselves for the team."

Who would be playing alongside Cristiano Ronaldo and Kaka remained a matter of speculation. Real Madrid followed up on its signing of Kaka and Cristiano by acquiring French striker Karim Benzema and Spanish defender Raul Albiol, bringing the cost of Perez's summer spending spree to about $280 million, and the club was in the market for a defender and central midfielder.

Thirty players were in the Real Madrid squad that began summer training outside Dublin in mid-July - and that didn't include the Brazilian and Spanish internationals - including Kaka and Raul Albiol - granted time off because of their earlier Confederations Cup commitments.

PRESEASON PRIORITIES. Perez said least 10 Real Madrid players could be gone by the time La Liga season starts Aug. 29. The names most often mentioned were the club's Dutch internationals. Six Oranje stars were under contract, and the most likely to go were strikers Ruud van Nistelrooy and Klaas Jan Huntelaar.

Jorge Valdano, Real Madrid's director general, said the club needed to raise money for its pursuit of other players.

"We need money to continue being active in the market," he said. "And at the moment to get money, we have to sell players. We need to trim at least five players from the squad."

He added that the priority was to sell players, not buy them.

"We need two players for each position," he said. "There are some positions where we have four players and others where we have one."

The person whose job it will be to pick the players who will start alongside Cristiano Ronaldo and Kaka is Chilean Manuel Pellegrini, brought over from Villarreal.

He hoped to use the preseason games against Toronto FC and D.C. United in early August to give as many players as possible a chance.

"No player is assured of a starting spot," he insisted. "We look for the best form and the players will have to prove their worth every week. As coach, it's up to me to choose the most appropriate team for each match."

 

(This article originally appeared in the August 2009 issue of Soccer America magazine.)    

 

 



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