The Board of Directors of Real Madrid Club de Fútbol announced that this Tuesday, January 7, the electoral process that will define the presidency of the club will begin before the end of the month. The process could be short if, as expected, Florentino Perez is the only candidate standing. The strict conditions that a candidate must meet in order to run, together with the good institutional, economic and sporting health of the sports club, make it very difficult for there to be a real alternative.
In 2021, Perez was re-elected after a procedure that lasted just 13 days, marking a significant difference with the more extensive processes of the past, which lasted up to three months. On this occasion, the dynamics could be repeated, consolidating the club’s tendency to shorten deadlines to avoid interruptions in its operations.
One particularity of the Real Madrid elections is that the incumbent president is not obliged to resign while the process is underway. This allows the institution not to be paralyzed at any time, even if the transfer market is open or if the team is in full competition, as is the current case: if Real Madrid reaches the final of the Super Cup in Saudi Arabia, Florentino Perez will be present in Jeddah.
REQUIREMENTS TO ASPIRE TO THE PRESIDENCY
Real Madrid maintains strict requirements for those wishing to run for the presidency, highlighting its so-called ‘anti-sheikh’ approach and defense of the member-ownership model. Applicants must be Spanish nationals, members of the club for at least 20 years and have the ability to guarantee 15% of the annual budget in a Spanish bank.
This guarantee, which amounts to 163 million euros according to the club’s latest budget, represents a significant filter. This measure ensures that the candidates have a strong financial and personal commitment to the entity, keeping away possible external investors without roots in the club, although it also avoids national ‘rivals’ who may have great business and sporting audacity (even if they do not amass a large fortune or have such a high guarantee).
REFORM AND 60,000 EUROS PER SHARE
Real Madrid defends its model of a club owned by its members, something increasingly unusual in the European football scene. This system contrasts with clubs financed by large fortunes or states, reaffirming the identity and autonomy of the entity. However, during his next term of office, he intends to carry out an important reform of its statutes that would allow an injection of capital from its members (regardless of its origin).
Florentino Pérez proposed in the last assemblies an ambitious corporate reform to transform the club’s structure. The proposal seeks to convert the nearly 100,000 current members into shareholders of the club, at an estimated cost of more than 60,000 euros per share.
In a first phase, a constitutional reform would be voted on that would allow members to become owners of the club by owning a share. In addition, the new structure would open the door to external investors, although always under the premise that the Real Madrid Foundation retains the majority of shareholder control, guaranteeing the continuity of the current model.
IPO?
The plan also contemplates a possible IPO of 10% of the club’s capital, with an estimated valuation of 1 billion euros for that package, positioning Real Madrid at a total market value of 10 billion. During the first few years, the shares could only be transferred to family members or to the Real Madrid Foundation, which would act as guarantor of the institution’s management and legacy.
The entry of an investment partner would not exceed the Foundation’s shareholding, which would allow Florentino Pérez, as a lifetime trustee, to maintain significant influence over the club’s strategic decisions forever.
