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Florentino Prez: The Savior

Florentino Prez Rodrguez is a Spanish businessman, civil engineer, former politician, and current president of Real Madrid Club de Football, as well as ACS. He is most famous for ushering Real Madrid's period of Los Galcticos, a time in which he paid extremely high transfer fees for elite footballers. Florentino Prez first ran for the presidency of Real Madrid Club de Football in the 19 February 1995 election. He campaigned on the poor financial situation of the club and the alleged mismanagement by the board extensively, but lost to the incumbent Ramn Mendoza by 700 votes. Later in 1995, Current President Ramon Mendoza was forced to give up the presidency after admitting that the club had a debt of 14.000 million pesetas. He was succeeded by Lorenzo Sanz, who had been vice-president during his last term. Lorenzo Sans became chairman of Real Madrid on 26 November 1995 after Ramn Mendoza was forced to resign due to the economic, social, and sporting problems of the club. Sanz tried to turn the club around by bringing in star players like Davor uker and Predrag Mijatovi with his own money. This led to a long awaited European Cup victory, which Real Madrid had not won since 1966, as the club clinched both the 1998 and 2000 tournaments. However, the two UEFA Champions League triumphs were not enough to hide the financial problems that still plagued the club and in elections a few weeks after the 2000 final, he lost the presidency to Florentino Prez. FIRST TERM AS PRESIDENT His second attempt was more successful when he took over as president in 2000, but Prez's campaign, once again highlighting the financial problems of the club and claims of mismanagement by the previous boards. Prez's promise to bring in Lus Figo from arch-rivals FC Barcelona also played a decisive role in the elections. Changes that Florentino planned to Implement: The club had a debt of 270 million Euros when Florentino took over as president. His objectives were very clear. Florentino wanted to Impose Financial Discipline and limiting unnecessary Expenditure, Restructuring Club Operations and Hiring Practices, Improve the Teams Performance and Bring Professionals into the Management Team To achieve these objectives, he implemented a strategy knows as Zidanes y Pavon Strategy. After the purchase of Figo, for a world record transfer fee, Prez sought to buy at least one world-class superstar player (a galctico) each summer during the transfer season. A year later by the purchase Zidane from Juventus was bought as well. The galctico policy was initially called Zidanes y Pavones. The name came from Zidane and Francisco Pavn, a youth product from Real Madrid the idea was to sign one major superstar per year and promoted youth players from within. The best offensive Superstars were bought each summer which helped in increasing the clubs market value and increase the attacking capilities of the team but the defensive side of the team

Florentino Prez: The Savior


aimed at promoting players from the youth academy to take up these positions. This resulted in Real Madrid having a very strong offense but the defense was not up to the mark at all. The benefits that Florentino and Real Madrid received were the high revenues through sponsorships, merchandising and accessory sales. It gave the club instant international Recognition and helped to increase the Brand Value and Brand Awarness of the Club. The problem was that to buy these high profile offensive players the club needed to have a lot of money to pay for the transfer and after the transfer a huge amount of money was required to pay the wages of each of these players. The solution was very simple according to Florentino how to raise that much money. The club ceded part of its training grounds Ciudad Deportiva to the city of Madrid in 2001, and sold the rest to four corporations: Repsol YPF, Mutua Automovilstica de Madrid, Sacyr Vallehermoso and OHL. The training ground was sold for 500 Million Euros. Florentino now had a new plan of action after selling of the training ground facility for 500 Million Euros. He had a Plan of Action. He firstly erased all the Debts of the Club and made another training ground which was ten times bigger and had better facilities on the citys outskirts. He bought Big Names to the Club. The Payment of Wages was changed in the Contract system. These Big players were paid according to their performance and how many games they actually played for the club and did not receive a normal weekly salary. As the club now owned the players, a new clause was introduced in the contract. 50 percent of the Income generated from the Image Rights were being made by the players had to be paid to the Club by the player.

Florentino Prez: The Savior


The Galcticos' List
Below is the list of Galcticos. Galcticos were expensive, world-famous Real Madrid football players recruited during the "galcticos" policy pursued in the first tenure of Florentino Prez's presidency at Real Madrid, where he purchased at least one galctico in the summer of every year.

Player Luis Figo Zinedine Zidane Ronaldo David Beckham Michael Owen

Transfer Amount 38.7 million from Barcelona 46 million from Juventus 30 million from Internazionale 25 million from Manchester United 8 million from Liverpool

Year 2000 2001 2002 2003 2004

Conclusion: Immediate success followed, with Real winning La Liga in 200001 and 200203 and claiming the UEFA Champions League in 200102, with Zidane scoring the winning goal in the final. After winning the 200203 La Liga title, Real Madrid added another galctico - David Beckham from Manchester United. The galcticos' policy resulted in increased financial success based on the exploitation of the club's high marketing potential around the world, especially in Asia. Its economic model led it to finally overtake perennial leader Manchester United as the world's richest club by revenue in 200506. Real Madrid became the biggest club in the world due to the fame of its galcticos and the resources they generated.