Real Madrid: The real culprits of the current transfer market inflation

It’s almost the 70s. Nixon is about to be the president of the United States of America. It was not a good time to take over the reins of the nation. After all, Nixon would be inheriting a recession that was a repercussion of his predecessor Lyndon Johnson’s lavish spending on the Vietnam War.

When he was elected as the president of the USA, people saw him as a fiscal conservative. However, just two years into his tenure, he imposed wage and price controls—turning a 180 on his supposed ideals. Initially, they worked. But as time went, they soared the inflation rate to double digits.

While it is true that after a few years, things began to stabilize a little bit, the inflation never really ceded. The rate might have slowed down, but deflation never happened in the long run.

Madrid’s Galacticos

Figo being presented as a Real Madrid player (Pic credit: Reuters)

Marketing is a very intriguing aspect of life. In truth, one can sell even bowels if it is marketed properly. In this regard, Florentino Perez is one of the kings. He knew that he wasn’t the favourite to win the election for being the president of Real Madrid in 2000, so he sold a dream and people bought it.

Back then, Luis Figo was the captain of Barcelona and their heartbeat. Not even in anyone’s wildest dreams could they envisage him donning the White shirt of Madrid. So when Florentino Perez promised that he would bring the Portuguese to Madrid should he be elected or else provide free tickets for the whole season to the socios (members of the club), they voted for him and made him the president.

You see, Perez’s dream was not only bought, they took it and made it their own vision. Otherwise, there is no other explanation for the fact that someone who wasn’t even the favourite to win the election won it by a margin of 100 votes.

A few days after the construction magnate was elected as the president, Real Madrid triggered Luis Figo’s release clause, which Barca had to accept. Figo, however, wasn’t bound to follow suit—but actually he had to.

"It was a surprise Florentino won. There were two or three days with a lot of confusion. Veiga (Figo’s agent) tried to give back the money [to Perez]. Veiga had a big penalty clause so he said to Figo, 'If you don’t accept this, I’m going to be bankrupt. I can’t pay. I’ll be ruined.' I imagine it was like that." – Former Real Madrid president Ramon Calderon, who also worked as a director under Florentino Perez in his first tenure.

In short, if Figo refused to join Real after Perez won the election, his agent would have had to pay around £22 million to the Spaniard as a penalty. Even before Florentino Perez decided to drop his name for the presidential campaign, he had contacted the Portuguese’s agent and made an offer: if he wins the election, Figo joins Madrid and if he doesn’t, they keep the bonus of £1.7 million (which he paid at that time itself) and the former Portugal captain stays at Barcelona.

Since nobody thought he would win, they accepted it.

Zinedine Zidane and Luis Figo of Real Madrid

But we are digressing here; the point is, Real Madrid paid £37 million for the former right-sided midfielder who won the Ballon d’Or for that year (2000). Before him, Hernan Crespo was the most expensive player at £35.5 million, who was tailed by Christian Vieri at £32 million.

Both Crespo and Vieri were bought by Italian clubs. Indeed, before the signing of Figo, Real Madrid never broke the transfer record even once, while Barcelona did it thrice and Real Betis once among La Liga outfits.

It was the deal that broke the shutters for Real Madrid, but given that it only broke the transfer record by £1.5 million, it was very normal on a global scale. The Galacticos were still going with the tide and were doing nothing out of the ordinary.

A year later Zinedine Zidane was bought for £46.6 million. Since Zidane was already a Ballon d’Or winner, breaching the transfer record by £9.6 million can’t really be considered as ground-breaking. Also, the fact that it took another 8 years for the barrier to be broken once again also works as a testament to the earlier claim.

After the relatively failed Galactico project, Perez resigned from presidency. However, he made a comeback in 2009 and once again repeated history by breaking the transfer record. Ricardo Kaka, who won the Ballon d’Or for the year 2007, was bought for £56 million.

Kaka and Cristiano were the beginners of the second phase of the Galactico era

Once again, the record was broken by £9.4 million and, more importantly, for another Ballon d’Or winner. In the same window, Cristiano Ronaldo was signed for a world record £80 million by the Merengues.

A lot of questions were raised about the deal. Some were even worried that it might cause a hyper-inflation in the market. However, looking back now, it wasn’t the deal that triggered the market to be where it is now.

For starters, the Portuguese had won the Ballon d’Or, maintaining the trend of breaking the deadlocks for only the winners of the highest individual honour. Secondly, it took another four years for the record to be broken. And let's not even talk about his performances because that is irrelevant to the topic at hand.

In the middle, not a single player was bought for a price anywhere near Cristiano Ronaldo’s. Fernando Torres’ £50 million deal to Chelsea in 2011 was the nearest any player had gone for in those four years. Meanwhile, both Edinson Cavani and Radamel Falcao made moves for £55 million and £52 million, respectively, but it happened in 2013.

And in 2013, everything changed—and Florentino Perez was the person responsible for it.

A display of power blew everything

Gareth Bale officially unveiled at Real Madrid

After pursuing Neymar for an elaborate amount of time, Real Madrid lost him to eternal rivals Barcelona. This was something that hurt the pride of the millionaire Spaniard. Now, he had to make a statement at any cost.

He had to exert his power.

Once, Ivan The Terrible—the former King of Russia—heard of a rumour that a town named Novgorod were plotting a rebellion against him. Just a rumour, mind you. So, as result, he not only killed every single person in the town, he also sewed up the town’s archbishop into a bearskin.

Yes, he did that. Just to showcase his power.

While Florentino Perez’s madness was nowhere near Ivan The Terrible’s, it did actually smash the transfer market to pieces… perhaps forever.

In the very summer of 2013 when Neymar joined Barcelona from Santos, the Bernabeu outfit bought the then Premier League Player of the Year, Gareth Bale, for £86 million. That was it—that broke the shackles of the transfer market to make it what it is today.

While the Welshman was having the time of his life at Tottenham, breaking the hurdles for a player that never reached the top three in Ballon d’Or rankings—let alone win it—opened a can of worms. All the days prior, clubs could actually finger out the fact that only the Ballon d’Or winners broke the transfer record in this millennium.

But with the signing of Bale, everything changed.

The signs were there. Luis Suarez joined Barcelona for £75 million the following season, which was also accompanied by James Rodriguez’s £63 million deal to Real Madrid. And then in 2016, it happened—Paul Pogba became the first player born in the 90s to break the transfer record when Manchester United bought him for £89 million.

£89 million for a then 23-year-old with only about four seasons of experience in the top-flight. That deal really marked the essence of how big a role Bale’s transfer played in beginning the madness that we know of today.

Ever since that deal, four players have gone for more—which will be five after Kylian Mbappe makes his switch to Paris-Saint Germain permanent—and none of those players have won the Ballon d’Or, with only Neymar reaching the top three podium in his career thus far.

Everything that happens is an effect of a cause; a root of sorts. In this millennium, until the Gareth Bale deal, clubs were afraid to break the barrier for any player that had not been awarded the best individual accolade.

Now, however, any player worth his salt could break the transfer record—with Harry Kane being touted as the next to crack the dam open.

And it all started with Florentino Perez’s madness in 2013, like it did on the American economy with Nixon’s decisions in the 70s.