Florentino Perez - man of mystery!

This summer Flo has surprised all of us.

Always known for signing a Galatico, this year he turned down the one opportunity he had because of cost (rumored to be more the wage demand and what it would do to team salary ladder than signing fee(s)). In fact this summer which was wildly projected to be the busy ever has turned out to be by far the quietest ever in Perez' years. The only signings are reaquiring our own players.

and in addition, there is the looming two year transfer ban. Seems Flo is just in denial firmly believing his appeals (especially the 2nd to TAS) will overturn any such ban???

It just seems when we win the CL, everything is great and when we lose, everything has to be changed. It's like he didn't watch the first half of the season nor accepting the amount of luck we had along the road to the CL final. And even there if it wasn't for such a lousy penalty GK for Atleti, we wouldn't have claimed that trophy.

Perhaps all these GL posts of not wanting changes got to him!!!

I don't know about you guys, but I am at a lost to try to understand the rationale of the man.

You say this but you're forgetting one thing: We are the greatest team in europe both historically and right now. We are what every rival wishes to be. We are the reigning, defending champions of the UEFA Champions League. Transfers here, transfers over there, and transfers across of rival teams are due to them playing catch up with us. We don't really need reinforcement bar a backup for Casemiro and Marcelo. We are fairly stacked as it is. and it seems both Zidane and flow understand this and thus in no real rush to do anything if there is anything to do. we got the academy if the worst comes to pass. I am not concerned.

Having said that though, it is most certainly quiet here. even the spanish papers are quiet regarding real madrid bar one or two mentions (alaba lol). Can't complain.

@Turok_TTZ: Let me first, before going any further, say that even though I completely disagree with you, I respect your opinion. Still, let me, If I may, show you where my disagreement lies.

Turok_TTZ wrote:You say this but you're forgetting one thing: We are the greatest team in europe both historically and right now.

Historically, maybe, although there are many other great clubs out there who share an equally prestigious history. But right now? Are you seriously going to stand there and say with a straight face that right now we are the greatest team in the world?

That title, in my humble opinion, goes to Barça. 5 years separating two trebles, 3 CLs in 7 years, 5 league titles in 7 years. They dominated both Spain and Europe while playing some of the best football I've seen in my lifetime. Since 2009, they have been by far the greatest team in the world.

We are the reigning, defending champions of the UEFA Champions League.

So? Chelsea was also the reigning, defending champions of the UEFA Champions League in 2012, it doesn't mean they were the best. And I hope you do agree with me that even though we won this year's CL, there were at least, at the very least, two other clubs better than us in the competition, and if it wasn't for the draw, we would've probably been knocked out earlier. We beat a horrendous Roma without impressing. We knocked out Wolfsburg thanks to Ronaldo's individual brilliance, we barely scraped past City, and we beat Atlético on penalties. That's hardly how "the greatest team in the world" wins the CL.

Please don't misunderstand what I'm saying or accuse me of being a Madrid hater. I acknowledge the fact that by beating Atlético we proved that we can wrestle with the best. I remember many people saying that we'd get murdered by Atlético because we got to the final through relatively easy teams. But we have to be frank with ourselves and also acknowledge the fact that we're not the greatest team in Europe right now.

The best way to get rid of your weaknesses is to acknowledge they exist, then work on fixing them. Burying one's head in the sands and pretending they don't exist certainly isn't the way to go.

Honestly, League + CDR > CL to me.  League is just as prestigious as CL imo so CDR becomes the clincher.  

Whether you start fast or finish fast...  it doesn't matter.  It all comes down to the trophy count at the end.  At least for a club like Madrid it does.  We're not an underdog team in any competition we play obviously.

If you finish strong, you may feel some moral victory as opposed to finishing worse than you started... but you know what they say about moral victories.

halamadrid2 wrote:Everyone can call their team the greatest Club but you have got to show it with the trophies you have won. We didnt have the greatest start but we finished the strongest and won the coveted trophy. If only the first half season matters then Barca werent the best Club 2 seasons ago because we were so dominant in the first half season (roles reversed last season) the only difference was the gap was too big in LL and we got struck off the Copa. I'd rather have a shit 1st half of a season and finish strong than the other way round and i am pretty sure most fans if most clubs will agree with me

But did we really go God mode or was it simply the result of a favorable draw?

Not to mention that the reason we won on penalties was Oblak is pathetic against penalties!

We may be the greatest of all time (I certainly could argue that point), but there is no way we can say that about last year. We had a very very poor team the first half, still remember the absolute ridiculous distance between our lines!. Then we had increible luck in getting to CL final, a game that was a fairly even matched game and then we go to penalties against a GK that can only stop a shot if it hits the post or player misses net. THe team did improve dramatically after Zidane took over, making us at least competitive, but to say we were or are the best team out there! You need to give your head a shake.

I was just kidding when I said maybe the GL posters who don't want changes got to Flo, but maybe that is the reason for this inactivity!

Mentioned it in the transfer thread...  Real Madrid is not a for-profit entity.  It can't "retain" the cash on its books unless it's earmarked for a project or if it's required for working capital.  So the extra money has to be either spent on something or distributed to the socios.  This was one of the major reasons Real Madrid spends like it does.... because there is no sporting benefit to keep it.  Is Flo preparing a distribution to the socios?

Was not aware of that, sports. Thats a rather troublesome note. you mean to tell me we cant have a war chest like bayern munich?

Barcelona and Bayern are our inferiors. Do not forget as it seems to escape some of ye, that we actually beat barca last season and that we bested atletico out of a cl title. the same atletico who knocked out bayern who wasnt gonna do anything special anyways. You punks overrate our competition of last year. Carlo Ancelotti may be at bayern now and the advantage may be with them but I feel our chances of retaining the CL is very good and Bayern's individuals are not of the same quality as ours. Every other team isn't worth mentioning. If I were to be concerned, it would be only by Bayern Munich who has the greatest coach right now.

With regards to the league, we wont have Rafa benitez messing things up like last year. last was an unusual year. we may be missing some of the BBC but we're good enough to make a good start. I expect a strong start for us this time around and neither atletico or barca have become significantly stronger through transfers. umtiti is troublesome if he plays to potential but we've the best strikeforce around. Gameiro is but one player and atletico were never that good attacking anyways.

I give zero shits with regard to the CDR.

The hell are y'all on that you have lost confidence in this great team of ours? I thought this was the Real Madrid section, not the "we lose once again fc" section.

Real Madrid are not actually a profit making company like a Manchester United. The socios (members) "own" the club and there are 85.000 socios.  The governance is democratically, elected as we well know by vote of the socios.  As it stands, if the club is more profitable than the annual budget more than an allowable percentage, those additional funds must go towards an allowable activity.  By "allowable" I mean something that is acceptable to the Spanish government for this type of corporate entity.  I'm not even sure the club can distribute to its socios because that wouldn't make it not-for-profit.

That's why you never really see Madrid be that profitable.  We run at a very modest profit every season... to remain within the allowable range.

He's the bench coach, not the trainer.

@hala, sometimes it makes sense to sit back. madrid have lost lots of ucl games due to taking the gong-ho approach with little sense in being defensively sound, a little cautious, and working as a unit at the back. i reckon zidane knows this all too well, he's been on madrid sides that lost games due to the defense acting like its brain was using dial-up internet.

as far as the argument here, we won the biggest title but let's not act like our shit doesn't stink. i'd like a league title, you need peak level of consistency to win that, and the ucl, as great as it is, sometimes little things can fall in or away from your favor.

we won the finals, we were happy as we ought to be, but it was more nerve-racking than it needed to be. all due respect to atletico, with our personnel and style of play (not a possession based team, which suits atleti), losses or tough games against atletico shouldn't be happening

as far as florentino, its simple, nobody has caught his eye, and the talent pool is so slim that its too difficult to make moves for those he might like cos they are probably also on big clubs and extremely irreplaceable considering the very slim talent pool. the biggest name out in the market is pogba, flo isn't spending a hundred and twenty million on a central mid. we were quiet last summer too probably because of the same reason, last summer it felt like the big sides barely made any major moves to be honest. strong talent concentrated in few clubs, and everybody else is asking for forty-five million for their garbage, that's enough to keep flo quiet.....for now. there's still a couple weeks for him to resort to his madness

Well Sports is sure persistent with his theories no matter how half baked they are. As to this surplus that he says will be distributed to buddies!!! He's forgetting there is a gigantic stadium renovation planned that isn't funded yet? Like any large corporation, there are always projects out there that can be funded when funds are available.

As to the vacancies, I have listed the plan umpteen time and yet it seems everyone is in absolute denial. You may not agree with them but they are what the club has done.

Flo and Zidane went into this off season saying they were looking at filling the vacancies (backups at CF, DM and LB) plus they had these "dreams" (Pogba, Lewandowski, Alaba) and they would be pursued only if the current club was willing to sell at a reasonable price.

The first has been accomplished with Morata, Coentrao / Nacho and either using Kroos / Modric as alternatives or by promoting Marcos Llorente.

The second just didn't pan out, not necessarily on signing price but reportedly what the demanded salary would do to the carefully constructed salary ladder.

And the other thing we expected was the upcoming transfer ban. Flo remains firm that his appeals (2nd is to TAS) will be successful. The only move he has made is adopted a new philosophy re cantera development and that is by loaning out talent that are better than 3rd level futbol to allow them to better develop (plus they can be recalled during any ban if needed).

However the FIFA appeal is being heard on August 11th. If he loses that and his confidence dwindles , he still would have a couple of weeks to make some last minute deals (aka Alaba)

Bill...  you have an annual budget and special projects budgets that are approved prior to the year and prior to kicking off a project.  You can't just randomly allocate funds to whatever you want.  The stadium project's funds have already been allocated from what I read in the last annual report (or I think it was the one from 2 years ago).  

This isn't a mom and pop shop.  And it's not a for-profit entity.  Real Madrid enjoys very significant tax and government benefits for being not-for-profit.  You need to follow the rules.

If you want the freedom... then you just become a regular entity and then it's no problem at all. the socios change from being members to regular shareholders then. Changes everything.

sportsczy wrote:Bill...  you have an annual budget and special projects budgets that are approved prior to the year and prior to kicking off a project.  You can't just randomly allocate funds to whatever you want.  The stadium project's funds have already been allocated from what I read in the last annual report (or I think it was the one from 2 years ago).  

This isn't a mom and pop shop.  And it's not a for-profit entity.  Real Madrid enjoys very significant tax and government benefits for being not-for-profit.  You need to follow the rules.

If you want the freedom... then you just become a regular entity and then it's no problem at all. the socios change from being members to regular shareholders then. Changes everything.

Now you are trying to tell me about corporate governance?

Just to be clear, a corporation has two budgets, one is called operating budget (in this case players salary are part of this) and the other is a capital forecast (or budget). In this case are player acquistion costs plus capital expenditures such as stadium renovations.

As to changes in budgets, for operating budget, changes are rare and variances need to be explained and usually offset by something else. However in capital forecast, changes happen all the time as equipment changes can be delayed in equipment lasts longer than expected or the reverse can happen. However as capital forecasts look at a 3 to 5 year horizon and substitutions (basically changing timeframes and amounts) happen regularly.

Keep trying Sports, better luck with your next half baked theory.

You're missing the point.  This isn't a corporation.  It's more like the EU or the UN in terms of similar organizations.  You have members, not shareholders.  Socios cannot buy each other out which could lead to someone getting a "controlling interest".  Each member has one vote and can only have one vote.  If a member wants to leave, then his member share and vote must go to a completely separate person or become vacant.... just as an example.

It's not governed by the rules and regulations of for-profit corporations.  It's a not-for-profit communal entity.

Real Madrid is an organization whose purpose is to serve its fans.  It's like a government serving its citizens, not a corporation maximizing shareholder value.  Its goal is not to create wealth.  Flo is running RM like a business as much as possible... but still within the confines of the institution.  

You're comparing apples and oranges.

In any case, if there is a surplus at the end of the year, RM can use it to pay down its debt since it has plenty of debt.  So using the funds won't be a problem as that is allowed for not-for-profits according to my friend (he's a chartered accountant)...  so there's no issue with not spending.

I just hope that's what happens with the surplus.  Will be interesting to see in the financial report assuming we do nothing in the mercato of any note AND with two transfer ban windows coming up.

You're so full of it Sports. Non profit or not it is a corporation and run basically same way in regards to budgets. The capital budget or forcast is essentially assets and like your friend said a surplus can be used to pay off debts (or liabilities), but also can be used for alternate capital expenditures by altering timeframes.

But you have essentially changed your bocus premise in excepting your friends explanation.

What's odd is that we generally buy 1-2 players we don't even need. Now that we need a couple extra bodies, we have made 1 signing- and it was a buy-back..

I'll just let it go after this because you're missing the point and becoming defensive, per usual.

Mission is what distinguishes nonprofits from their for-profit cousins: Nonprofits have missions instead of owners or shareholders. While the prime directive for board members of for-profit organizations is to ensure the highest possible value for owners, by contrast, nonprofit board members’ prime directive is mission fulfillment.  There's also a distribution constraint, where a nonprofit organization uses its surplus revenues to further achieve its purpose or mission, rather than distributing its surplus income to the organization's shareholders (or equivalents) as profit or dividends.  The budgets are approved annually as are special projects.  The allocations to the new stadium are already approved and budgeted, as an example.

So what is Real Madrid going to use the unused surplus?   That's my question.  It has to be spent somewhere and it's a big number.  The simplest is to pay down debt.  But I'm going to pay attention in detail to the financial statements because I'm curious to see where all this money will go since Real Madrid cannot spend money in the next two transfer windows either.

Barca intentionally ran a budget deficit before the ban.  They spent 167 mil euros in transfer fees alone that summer and a net 90.  We've spent a net 20 so far (30 out for Morata and 10 in).

sportsczy wrote:I'll just let it go after this because you're missing the point and becoming defensive, per usual.

How so? Just because you come up with these half baked theories to a mostly young audience that have little or no business / finance knowledge. Seems you have very thin skin and obviously little to backup your ridiculous statements. You, my friend are an agenda poster (now - you weren't this way a couple of years ago). When your agendas don't come to fruition, you resort to these wild ass theories about politics, corruption, etc etc.

A few weeks ago you went on about Zidane unhappy and in conflict with unnamed Perez' cronies. You even changed the story at least 5 times in your long pursue of the theory.

This time, it was again a shot at Perez. Here's your exact statement that started this theory.

sportsczy wrote:

we all know that Flo wants to retire from Real Madrid soon.  I wouldn't be at all surprised that Real Madrid start investing in and sponsoring projects that benefit the people who have supported him over the years.  That's how it works.  Maybe that's why we're being conservative with our transfer spending suddenly.

You then go on to say, because it is set up as a non profit corporation (that by the way is valued more than most profit corporations), they have to spend the budgeted money somehow. This despite the fact we are talking about capital, not operating budget. Then suddenly you talk to someone that does know something about finance and find out you are wrong (but of course you will never admit that, nor retract your original statement of Perez' corruption).

So tell me again why this is defensive or somehow I am missing the point.

You're separating capital expenditures from an expense which is fair enough.  Typically, the fee spent on players is amortized over the term of their contract.  So you don't take the full impact of cash outflows on the P&L immediately.  It's the difference from cash basis and accrual basic of accounting.

That doesn't change the fact that budgets look at both.  They approve cash allocations for each year as part of the budget approval...  Basically, there's a projected financial statement that's approved that includes balance sheet, P&L and cash flow statement.  

You're making a valid distinction... but one that is irrelevant to my point.  What is Flo and BOD going to do when massive cash allocations aren't disbursed as per the budget?  Will that money go towards paying down the debt or something else?

I was just hypothesizing that, in the world of politics, you generally get votes for favors.  It happens even with the most "honest" politician.  So what has Flo promised... that's my question.

While I am being delightfully educated on the practices on certain accounting practices Madrid may or may not be doing, I'm not sure how that explains the club's lack of transfer activity.

As Deez rightfully wrote, we have signed many unnecessary signings over many seasons. This season, where even those unnecessary signings can be needed, we are awfully quiet.