Florentino Pérez is not used to losing, at least not without a government bailout to soften his fall. The billionaire Real Madrid chairman had been a driving force behind the botched European Super League initiative, working with Spanish fund Key Capital Partners to negotiate £4.3 billion in financing from JPMorgan Chase and initially securing the participation of fourteen other elite clubs from Spain, England, and Italy.
“Football must evolve like everything in life,” claimed Pérez in a rare interview earlier this year — justifying the unprecedented power grab by pointing to declining television audiences as well as mounting club debts, which in the case of both Real Madrid and Barcelona top €900 million.
“This is a pyramid because if we big clubs have more money, it will flow to everyone,” Pérez continued, deploying his well-worn neoliberal talking points on trickle-down economics. Yet he had not counted on the scale of the fan revolt across Europe, which forced the “big six” Premier League clubs to announce their withdrawal from the proposed Super League on Tuesday evening. By Wednesday lunchtime all the clubs except Real and Barcelona had pulled out, with Pérez’s long-held dream of a Super League in tatters.
Reaction to the cynical venture, aimed at further concentrating football’s TV and advertising revenue in the hands of a few elite clubs, was much more muted in Spain than elsewhere — in part signaling the degree of influence Pérez yields amongst the country’s political and media elites.
Among the national daily papers, only El País’ carefully worded editorial condemned the move while Spanish Socialist Workers’ Party (PSOE) prime minster Pedro Sánchez has avoided making public comments, though his government did issue a statement rejecting the proposal. Soon after, however, #FlorentinoDimision (#FlorentinoResign) was trending on Spanish social media, with polls showing a sizable majority of Real fans also opposed to their chairman’s plans.
If the Super League controversy has brought Pérez into the international spotlight, his name at home has long been a byword for unaccountable economic power. Few others better embody Spain’s crony capitalist regime — a state-sponsored oligarch whose construction empire has been built on access to massive public contracts and profiteering off outsourced social services, all while pursuing a “secession of the rich” policy on taxation and civic solidarity. Beyond football, his lasting legacy is having played a vanguard role in the remaking of Spain’s state and economy through three decades of savage neoliberalization.
The Dominance of Construction
Pérez has led the construction firm ACS since its founding in 1997 — with initial financial backing from the Albertos and the March family (both of whom had close ties to the Francoist dictatorship, in particular the latter who were key in financing Franco’s 1936 coup). In the decades since, ACS has become one of the world’s largest construction conglomerates. Indeed, it is the largest in terms of international revenue generated outside of a company’s home territory.
Like a number of other Spanish construction and infrastructure companies, ACS was transformed into a global player thanks to state largesse during Spain’s pre-2008 boom years. After being elected prime minister in 1996, the right-wing José María Aznar initiated a reordering of Spanish capitalism — through a wave of privatizations, the expansion of domestic capital markets, and the shaping of a new growth engine for the economy, based around finance and construction.
But as sociologist Rubén Juste notes in his book IBEX 35, this was not simply a question of implementing a pro-market reform agenda. Rather Aznar’s ambition was to secure a permanent hegemony for his state project — one that would last “in the long-term, beyond his physical presence in government.”
To this end, he pursued a twofold strategy: on the one hand, seeking to generate a broad social consensus around a model which promised mass home ownership and individual prosperity while also organizing a new leading bloc within the capitalist class which would be centered around, and dependent on, the Popular Party (PP)’s patronage. For the construction conglomerates, in particular, this network of patronage meant access to two essential resources: public contracts and credit on tap (through Spain’s politically controlled regional savings banks known as cajas).
In the case of Pérez, the large-scale public works projects (motorways, airports, high-speed train networks) undertaken by the PP were a key source of revenue for ACS. At the same time, Caja Madrid — under the direction of Aznar’s lieutenant Miguel Blesa — bankrolled everything from his buy-up of millions of ACS shares (to become the company’s leading shareholder) to the financing of key Real Madrid signings, including a controversial €76 million loan to the club at the height of the financial crisis in 2009 to buy Cristiano Ronaldo. This was a moment when credit in the economy was frozen for the vast majority of small and medium-sized businesses.
And with Clece, ACS’s services division, no other company has benefitted more from the outsourcing and marketization of Spain’s public services over the last three decades. It has come to run public kindergartens, hospital cleaning and catering services, homeless and women’s shelters, street cleaning and bin collection services, day centers for disabled people, nursing homes as well as employing thousands of carers in its management of municipal home-help services in cities like Madrid and Barcelona. Its business model is clear: sacrifice working conditions (of the predominately female employees) and the quality of basic public services so as to extract massive profits.
By 2003, as Aznar entered the last year of his premiership, five out of the ten construction companies with the highest stock market capitalization in Europe were Spanish — with ACS leading the pack. In an increasingly deindustrialized economy, construction was a field in which Spain could project its power internationally — as was football. And in Florentino the two became intertwined into an irresistible force — with the presidential box in the Bernabéu stadium becoming one of the centers of power and influence in Madrid.
“Real Madrid is a Spanish brand standing above the [national] government,” Pérez is reported to have told Socialist Party politician Matilde Fernández – a dictum that seems generalizable for how he views his own position at the apex of the country’s ruling class. In theory Real is a fan controlled club, owned by more than eighty thousand socios [partners], but a clause stating any candidate for the chairmanship must deposit a guarantee totaling 15 percent of the club’s budget has allowed Pérez to dominate the club over the last two decades.
At times, it is hard to distinguish his personal business interests from those of the club. As a number of journalists and economists have investigated, the Real Madrid brand seems to have played an important role in securing overseas governmental contracts for ACS — with major international signings for the club, such as Columbian James Rodríguez, the Mexican forward Javier Hernández, and Costa Rican goalkeeper Keylor Navas coinciding with Pérez’s company winning construction deals worth hundreds of millions of dollars from their respective governments.
Yet probably the most controversial deal Pérez was involved in as chairman was the sale of Real Madrid’s training ground as a site for the city’s new financial district in 2001. It was a win-win scenario for Pérez: he would clear the clubs burgeoning debts with its €500 million cut from the deal, while ACS would, in turn, receive its share of the huge construction contracts for the project.
Yet it would also radically alter the city, deepening further geographical inequalities between the affluent north and working-class south of the capital, as well as also requiring a huge recreational area near the city center (that had been ceded to the club by the Francoist dictatorship in 1950s) be rezoned for business purposes.
With various administrations having resisted pressure from the club over the issue for decades, Pérez’s close ties to the PP regional and local governments in the city allowed him to push through the rezoning in a matter of months after taking up the chairmanship in 2000, ensuring a windfall for the club that would go toward financing its galácticos (or superstar) transfer policy.
“The city cannot be transformed just to pay the debts [of a football club]” insisted Matilde Fernández, who was then the Socialist Party spokesperson in the Madrid region. “You are talking about a powerful figure bypassing the democratically negotiated urban planning regulations only for his own particular interests.” Veteran sports journalist José María García goes further describing it as “the greatest sports scandal since the return to democracy,” noting the public land had been transferred to the club on the basis it would be used for “non-commercial purposes.”
The resulting soulless business center dominated by four giant skyscrapers, which are among the tallest buildings in Europe, has radically altered the urban fabric of city.
Even before the bursting of the housing bubble in 2008 shattered the popular basis for Spain’s pre-financial crash growth model, the forms of corruption and cronyism it had generated were eroding the public institutions of the state. The ex-Podemos MP and writer Manolo Monereo memorably described Spain’s form of crony governance as la trama (the plot) — analyzing how alongside outright corruption, a broader network of political favors, revolving doors, and shared class allegiances closely bound together PP and PSOE to strategic economic players like the construction magnets.
Such an economic regime leaves oligarchs like Pérez in a near untouchable position. “Florentino never loses” read one recent headline after the Supreme Court ruled last November that the state was liable for the €1.35 billion debt owed to the Spanish banks for the failed Castor gas project, a huge public private partnership with ACS.
Similarly a report published by Madrid City Hall during Manuela Carmena’s tenure as mayor uncovered billions of euros in unnecessary overrun costs on public contracts won by the major construction firms. With respect to remodeling of the M-30 motorway in Madrid, of which ACS was one of the three main contractors, the report found “overrun costs without any certificates or documents to justify them and millions of euros being paid for infrastructure and (maintenance) services that did not exist or were never completed.” Initially budgeted at €2.5 billion, the final cost came in at more than double that, at €6.5 billion.
The Super League saga has jump-started an interesting debate internationally around unaccountable power in sports, with its collapse striking an important blow to the hypercommercialized model of club football being push by the billionaire owners of the clubs. In Spain, however, Pérez and the wider entrenched bloc of economic power of which he represents remain beyond democratic reach.