(Photo by Michael Steele/Getty Images)
"It's like deja vu, all over again"
Redundancy aside, we can all share in Yogi Berra's sentiment. You have no doubt heard the news. In a repetition of last week, Real Madrid has signed one of the world's best players for a staggering fee.
Cristiano Ronaldo and Kaká will be wearing white next season, and that privilege has cost a combined €160,000,000. The world record transfer fee has been shattered once more, and the top four transfer fees on the list have all been paid by Real Madrid.
Astonishing, but they are not finished yet. Flonentino Pérez, Real Madrid's returning president announced they "will be signing five or six players" this summer. All told, they are rumored to possess a war chest of 300 million euros.
All this at a time when the world economy is in recession. While most industries are tightening their belts, and many individuals and businesses are being denied credit, Madrid keeps on spending.
Many will rightly be scratching their heads wondering how Real Madrid can afford it. Do they really have 300 million euros sitting in a bank account somewhere?
Not exactly.
Mr. Pérez is regarded as a wizard of finance, but his strategy is not overly complex. A look back at his first term as president is revealing.
Florentino Pérez: Part 1
Fresh from winning a record eighth European Cup, the second in three seasons, Lorenzo Sanz looked certain to win re-election to the presidency of Real Madrid. Pérez won a surprise victory, promising a to erase the club's debt and sign Luis Figo.
He did both.
And he paid for it by arranging the re-zoning and sale of the club's training ground for 500 million euros.
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