The real dealer
Running Real Madrid is just a hobby for Florentino Pérez and he strives to be a 'normal guy'. As if...
John Carlin
Sunday June 22, 2003
The Observer
It has been customary since Roman times for wealthy individuals to promote talented artists. Florentino Pérez is perpetuating the tradition. Lavish patron of the football arts, the Real Madrid president is building a collection at the Bernabéu to rival the Prado's. At Spain's most extravagant museum you can peruse the works of Goya, Velázquez, Tintoretto, Rubens, Titian, El Greco; on exhibit just down the road at Spain's most mythical football stadium are the six great contemporary masters, Raúl, Roberto Carlos, Luis Figo, Ronaldo, Zinedine Zidane and - the freshest acquisition -David 'el Inglés' Beckham.
Not that Pérez has spent one penny of his own money. He could, easily. He is a genius in the world of big business and the Spanish press puts his personal fortune at hundreds of millions. What he has done instead during his three remarkable years at Real Madrid is donate his drive, single-mindedness and business cunning to what, for him, is the unmatchably enjoyable mission of assembling what could turn out to be, by the time he's finished, the most thrilling football team ever.
He is the commanding figure in world football today. Everybody wants to watch the Real Madrid team that Pérez built ( 'el Florentin' , they call it in Spain). And all the world's best players are queueing up for the privilege of playing in it. Ronaldo asked if he could. So did Zidane. And Beckham. Ronaldinho would go like a shot.
All that glamour is backed by shrewd management. Pérez inherited a financial basket case when he was elected in the summer of 2000 but a few weeks ago World Soccer magazine reliably pronounced Real the world's richest club, leapfrogging Manchester United. Yet the beauty of it all is that, as Pérez reveals in an exclusive interview with The Observer, running Real is his 'hobby'. Despite that, or perhaps precisely because of the fans' passion for the game, he is so good at what he does that none of his competitors in European football's executive divisions appears to be in the same class.
Otherwise, how did he manage not only to prise Figo from Barcelona, Zidane from Juventus and Ronaldo from Internazionale, but to turn each of these expensive purchases into almost instant profit? How did he pull off last week's double daylight robbery: the 'easy' acquisition of Beckham from under Barcelona's noses, and from a purportedly marketing-savvy Manchester United, at a price that, from Real's point of view, was laughably low?
Pérez is far too shrewd and too respectful of Manchester United to confess his glee at paying under the odds for the biggest individual brand name in sport. To talk, as people do, of the devalued state of the football market today is to miss the point, to set Beckham's price as if he were just another footballer, while failing to factor in the vast riches his celebrity reaps.
Zidane cost nearly twice as much two years ago. And while, in the estimation of some, Zidane may be twice the player, Beckham will provide Real Madrid with a lot more than twice the income the Frenchman does. From the night Beckham's transfer was announced, Real's commercial department has been flooded with telephone calls from all over Asia and Europe. The club's marketing people have never known such pandemonium. But what they do know is that companies seeking to make sponsorship deals will have to pay appreciably more for the privilege of basking in Real's spotlight with Beckham in the team. Which is precisely why Pérez's transfer philosophy is always to pay top whack for the players with the biggest names: they always return the investment.
'The star players generate the greatest profits,' explained Pérez on Thursday, still purring with delight at the acquisition of Beckham. 'A player of Beckham's quality makes any team shine. An individual like Beckham, with a presence so great beyond the world of sport, with such international resonance, reinforces our club's objective, which is to project Real Madrid as a universal phenomenon.'
Where do the profits actually come from? How does the addition of a star player like Beckham translate into hard cash? 'We have a saying here in Spain: "What's expensive is cheap." Let me explain. When I arrived three years ago Real Madrid was bringing in a regular, working income of €115 million [about £80m]. Next season we shall be bringing in more than double that: €240m. So, what difference do all these star players make in real-money terms? The answer is: something quite extraordinary. A massive phenomenon. So massive that five years ago Real Madrid never once filled the stadium and now, for each game, we have 200,000 requests over and above the Bernabéu's capacity. We used to take in less than €30m in ticket sales, now its nearer €70m. Now everybody knows the passion for Real Madrid extends beyond Spain to the whole world, the big companies are coming to blows for the privilege of advertising their products with us, or to associate their names with Real Madrid.'
If less than a third of the money comes from ticket sales, where does the rest come from? 'Thirty per cent audio-visual rights. And 40 per cent from everything relating to marketing. Everything. Merchandising. The deals with Adidas, Siemens, Pepsi, and the Real Madrid image rights sold all over the world. Marketing is today the chief source of income for Real Madrid, which was not the case when I arrived.'
In fact the income from marketing, he said, used to be 'pitiful'. 'I don't deserve any special credit. The brand was already there. What we have done is dust it down and place it at the level where it belongs, that of the best team in the world. It doesn't matter if you go to Africa, Asia, the Americas or wherever: everybody recognises that Real Madrid is the top brand. I understand that people might say this sounds arrogant. But I believe it is the simple truth. I say it with all humility: Real Madrid is the best brand in the world.'
And it is the best brand because it has the biggest players. Which is why, in turn, Beckham, Ronaldo and other top players wish to join Real Madrid. 'Naturally. When you achieve that balance between the magnitude of the club and the magnitude of the players, the effect is frightening, isn't it?'
Real Madrid's rivals in Europe would not disagree. Pérez himself is not frightening at all, though. Nor is he remotely disagreeable or haughty, as one might expect of a man worshipped by Real Madrid's fans and respected the world over. Yet that is the least of it. Compared to his day job, Real Madrid is small potatoes.
A member of the political team that oversaw the delicate and successful transition from dictatorship to democracy upon the death of General Franco in 1975, he quit politics for business 20 years ago, purchasing a bankrupt construction company, ACS, at a price of one peseta (then about half a penny) per share. Today, aged 56, he presides over the biggest construction company in Spain and the third biggest in Europe. Turnover is €12bn. The company employs nearly 100,000 people and operates in 70 countries. 'That's my job,' he says. 'Real Madrid is my hobby.'
We sit at a round table in a large, air-conditioned room on the solemn, hushed executive floor of ACS headquarters in Madrid, 10 minutes' drive from the Bernabéu. Pérez is not solemn at all. We had never met before but, as relaxed as if he were inviting a friend into his home, he instantly adopts the familiar 'tú' form in conversation, instead of the distant 'usted' . He is never less than courteous, in an old-fashioned Spanish sort of way. At the end of our hour-and-a-half together not only does he escort me to the lift, but when the doors open he reaches inside to press the ground-floor button, as if this were an indignity to which his guests should not be expected to stoop.
We begin talking about his childhood going to watch the Real of Ferenc Puskas and Di Stefano at the Bernabéu with his dad, who owned two perfume shops. 'He's still working at 86. Doesn't know what else to do with himself, poor chap.'
Pérez admits that he might well say the same thing of himself. A brutal capacity to work days, nights and weekends is one quality he inherited from his father. Another is what he calls 'being normal', a virtue that, as Pérez is in the habit of saying, he prizes above all others. 'It means being like other people. A regular person. It means never losing your common sense and never, ever believing yourself to be so important that you forget to keep your feet on the ground.'
In his habits Pérez, who is married with three children, must be the most self-denying multimillionaire alive. A far, far cry from Beckham, he does not even own a car, and always - without exception - he goes out into the world wearing a dark suit and a blue shirt.
Always blue? 'It's a colour that goes with everything.' Sort of... why complicate your life? 'Exactly.' And you don't drink either? 'No. I am completely abstinent.' And is it true that you're not interested in food? 'Regrettably, I have not had that good fortune, I have not known how to enjoy eating. I have friends who enjoy it a lot and I see them and think, "Wow, look at these guys!" Me? No. Decidedly not.'
His favourite dish is fried egg and chips. As for hobbies beyond football, he likes films, painting and sailing. And dogs. 'Yes. I've got three dogs. I love my dogs. I love them so much that I sometimes find it embarrassing to admit it, but they do actually condition my life. There are times I won't go out so as not to leave them alone. I won't go on a trip so as to not to leave them alone... and when I return from a trip it's always a joy. There they are waiting for me.'
So, Perez is not as tough a cookie as he would seem to be. He is ferociously ambitious, otherwise he would not have got to where he is. He is ruthless in pursuit of commercial goals, otherwise he would not have been so economical with the truth two months ago when he ruled out any notion of signing Beckham. He says in his defence that there was no 'strategy'; that that was the truth then, but it changed when United put him on the market. One might also note that had he said, 'Yes, I fancy Beckham,' he may well have scuppered any possibility of ever getting him.
But there is a sentimental side to Pérez, not only as seen in the affection he feels for his dogs but in his relationship with the game of football. He is as sentimental, it turns out, as he is pragmatic. As quixotic - preferring always to buy attackers to defenders - as he is cold and calculating. Real Madrid is the outlet for the wild inner man: it is the bright pink shirt, the three-star Michelin meal, the premier cru that he never allows himself in real life.
If the construction business is the prose in his life, I put it to him, football is the poetry. He smiles, as if found out. 'All of us who love the game have a poetic, romantic connection with it, I would say. And for me football's always been a passion since I was a little boy playing every day in the school yard, watching Madrid play at weekends.'
Watching games like those between Real Madrid and Manchester United in the Champions League is, for Pérez, what football is all about. 'What a magnificent couple of games! Eleven goals! Amazing! And how great that the two biggest, most charismatic clubs in the world should play in that spirit! Yet it couldn't be any other way. They thrill the world because they play quality football, constructive football, football to win - not the destructive football which is all about not losing, which is something else altogether.'
Pérez adds, rather surprisingly, that he would like to propose that the fans of Manchester United be awarded the Prince of Asturias prize, a sort of Spanish Nobel awarded every year. Why?
'It's hard to come across fans like that. Truly. First, how they support their own team. But then they are also so generous in recognising the merits of their rivals. I saw not only the entire stadium but also the chairman, Martin Edwards, and his board of directors, applauding Ronaldo off the pitch. In the same way that Ronaldo said afterwards he would never forget it, I won't either. That's the kind of thing that encourages you to keep going in football, because football is rivalry, it's passion, but it's also about the exaltation of those great human values the game brings out in people.' Hearing Pérez talk of 'moral values and exaltation' you can see why, for him, Real Madrid cannot be a privately owned business, why it remains a club owned by its members. 'No one believes in plcs more than I do. I've got one that is very big in the stock market. But football, when you really come down to it, belongs in the sphere of human emotions. Real Madrid is a kind of religion for millions all over the world. You can't have that in the hands of one individual. It's as if the Catholic church belonged to one person. It wouldn't be right.' Nor does he see himself as Real Madrid's pope. However extraordinary his achievements at Real and in the world of business, he is decidedly not what Sir Alex Ferguson would call 'a big-time charlie'. On the contrary, he keeps a lower profile than almost any other club president in Spain. 'I don't like to give the impression that I am the main man here, because I decidedly am not. I am not the owner. The owners are the club members, who are the fans.' If not the owner, what is the word to define him? 'As the person who interprets the wishes of the members. Every four years you've got to submit yourself to the vote. I have to connect with the ordinary fan. There will be an election again next year. I can't lose touch with the fans. Otherwise they'll throw me out.' Sure. And if you believe that you will believe anything.
PS. Del Bosque and Hierro can probably testify to this harmless, purist of a fan.