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INTRODUCTION: LA DÉCIMA

ON THE COOL EVENING of Saturday, May 24, 2014, Real Madrid’s soccer players walk onto the field for the 2014 UEFA Champions League final and look up at a screaming full-capacity crowd of 65,000 in Lisbon, Portugal’s Estádio da Luz (“Stadium of Light”). The world’s most watched annual sporting event is about to air in more than 200 countries, drawing an estimated global audience of 400 million viewers. (To put this into perspective, only an estimated 160 million people worldwide watched the 2014 Super Bowl, 114 million of them in the United States.) The Real Madrid players are dressed in their traditional gleaming white jerseys, the front of which are adorned with “Fly Emirates,” a Real Madrid sponsor’s logo. On the upper-left front of their jerseys, over their hearts, is the club’s famous emblem with a royal crown on top. On the upper-right front is the logo of Adidas, another Real Madrid sponsor. The crest on the left sleeve shows the number of European Cups won by Real Madrid. With the temperature hovering around fifty-nine degrees Fahrenheit, some of the players have chosen to wear long-sleeved jerseys.

The tournament is referred to as the UEFA Champions League (previously known as the European Cup until it was renamed in 1992) because it is a tournament of the soccer teams that finish in the top few teams of their country’s respective soccer leagues. Real Madrid had last won the competition—their ninth title—in 2002. After over a decade of chasing La Décima (“the tenth”), Real Madrid is ninety minutes away from realizing that goal. Their opponent in the final is cross-city rival Atlético Madrid, wearing their traditional red-and-white striped jerseys. There had been two teams from the same country in the Champions League finals before, but there had never been a Champions League final between two teams from the same city. There was such high demand from Real Madrid’s club members for the tickets the club was allocated by UEFA that the team had to award the tickets by means of a draw. In addition, Real Madrid sold out its 81,044-capacity home-city stadium, Bernabéu Stadium, to Madridistas (a nickname for people who support Real Madrid) to watch the game on big screens.

With a tenth European trophy for Real Madrid or a first for Atlético Madrid at stake, the Madrid versus Madrid battle for the title of best team in Europe—which generally translates as the best team in the world—is historically earth-shattering even before the prime-time kickoff.

Real Madrid’s team of galácticos consists of amazing star players, including Portuguese forward Cristiano Ronaldo,8 who is considered one of the two greatest soccer players in the world (along with Argentine forward Lionel Messi, who plays for rival club Barcelona). Ronaldo’s jersey number is 7, and he is sometimes referred to as CR7. During the 2013–14 season, Ronaldo had truly established himself as one of Real Madrid’s contemporary icons, along with previous galácticos like Zinedine Zidane, Raúl González, and Luís Figo. Ronaldo finished at the top of the Spanish La Liga season’s goal-scorers list with fifty-one goals in forty-seven games—more than one goal per game average is an astonishing statistic. Though it is often overlooked, Ronaldo also contributed nine assists that season to add to his impressive stats. Beyond his good looks, his sculpted body reflects the incredible winning mentality and hard work that he puts into striving to be the best and to set an example for his teammates.

Ronaldo has a fearsome scoring partnership with Welsh winger Gareth Bale and French striker Karim Benzema. Benzema joined Real Madrid in July 2009, one month after Ronaldo, when Real Madrid paid a €35 million ($49 million) transfer fee to French team Lyon, with the fee rising to as much as €41 million ($57 million) including incentives. Before the 2013–14 season started, Real Madrid had paid English team Tottenham €91 million ($120 million) for Bale. The three star players were nicknamed the “BBC” by the Spanish media—for Bale, Benzema, and Cristiano.


The starting lineup of the Real Madrid team that won the 2014 Champions League final. Back row (left to right): Casillas, Ramos, Varane, Khedira, Benzema, Ronaldo. Front row: Di María, Bale, Coentrão, Carvajal, Modrić.

Despite the perception that Madrid simply buys its star players, the goalkeeper for this epic game is Spaniard Iker Casillas, who started his career at the age of eleven in Real Madrid’s youth academy, which is sometimes referred to as La Fábrica (“The Factory”). In 1999, at age eighteen, he was promoted to the first team.9 As the longest-serving member on the team, Casillas was automatically appointed captain during the 2010–11 season. As a product of the Real Madrid development academy, he knew and exemplified the ethos of Real Madrid. In fact seven out of the twenty-five players (28 percent) on the first team in the finals are graduates of the academy. Together they share the spirit, expectations, history, and essence of Real Madrid with the new players.

Real Madrid’s coach that season, Carlo Ancelotti, is well suited to manage their superstars, not only because of his calm temperament on and off the field but also because of the respect he commands as a former star player and winning coach. Ancelotti likes to stretch the game and take advantage of open spaces, but Atlético’s coach, Diego Simeone, has proven enough times that he is a tactical genius and will not be overwhelmed by the occasion.

The media has marketed the game as David vs. Goliath. Real Madrid generated €550 million ($726 million) in revenue during the year, compared to Atlético’s €170 million ($224 million). Real Madrid paid their players an average of $7.6 million compared to Atlético’s $2.6 million. Real Madrid has a powerhouse balance sheet, probably one of the strongest in all of sports, while Atlético had such serious debt problems three years prior that they fell behind in their tax payments. Although any link between winning in sports and profitability has been disproven in several studies (see sidebar below), the media has been speculating that an Atlético win would increase the value of their brand and profitability. The media seems to have forgotten that, after winning the Champions League in May 1998 and May 2000, Real Madrid was close to bankruptcy by 2000.

Most Soccer Teams Lose Money

Simon Kuper, writer for the Financial Times, and Stefan Szymanski, former professor of economics and current professor of sports management at the University of Michigan, made the argument in chapter three of their book Soccernomics (New York: Nation Books, 2009) that most soccer teams lose money. According to the authors, the buyers of soccer teams are wrong if they assume that if they can get their teams to win trophies, profits will inevitably follow. The authors analyzed the Premier League from 1992–93 to 2011–12 and discovered that even the best teams seldom generate profits. They also detailed how unprofitable the overall industry is. In addition, they showed that there was little correlation between success on the field and making money. Instead, Kuper and Szymanski found that most teams didn’t care about profits. They were spending what they believed it took to win games. The majority of teams even paid players more money than they had or could produce, so the teams would borrow money, and most had a precarious amount of debt.

In a 2008 unpublished MBA thesis at Judge Business School in Cambridge, Francisco Cutiño showed that winning games doesn’t necessarily help soccer teams make profits. Rather, the effect works the other way. If a team finds new revenues, those revenues can help them win games because they can help buy/retain better players:

But contrary to the common idea that good [on-field] performance will drive good financials, there is evidence that better revenue-generating structures can have a significant impact in the performance of the team . . . only with good financial results clubs can buy and retain good players and create good teams.

Therefore, a team should develop a sustainable economic-sport model to make profits to buy/retain better players, which leads to better results.

In Winners and Losers: The Business Strategy of Football (New York: Viking, 1999), Szymanski and researcher Tim Kuypers analyzed ten years of the English Premier League (1990–99) and discovered that the one variable with the highest correlation to winning is: the teams that pay the highest salaries for the best players win the most often. It probably doesn’t take a lot of classes on data analytics to figure that out. I believe in a competitive industry with competitive owners who have lots of money to spend, a team needs a distinctive competitive advantage to maximize the performance of these best players as well as to help generate more money to pay the salaries.

The game ends Real Madrid 4–1 Atlético Madrid. It’s Real Madrid’s tenth Champions League trophy, their first since 2002, and they couldn’t have won it in a more dramatic fashion, coming from behind to tie the score in the ninety-third minute and forcing the game into extra time (for more details, see “Play-by-Play of La Décima” sidebar on page xxvii). To add to Real Madrid lore, the team won the game utilizing one of its core values: never giving up, which means competing until the final whistle. Real Madrid was 150 seconds away from defeat, yet they never gave up hope and played as hard as they could until the very end. Putting aside the rivalry or La Décima, what makes the evening so special to Real Madrid’s management is that the players lived up to the community’s expectations.

On Sunday morning, the team arrived at Madrid’s Plaza de Cibeles with the trophy. There were still tens of thousands of Real Madrid fans in the square after celebrating throughout the night. “Thank you for waiting,” Captain Casillas told the supporters and then added the obvious, “It’s time to think about the Eleventh (La Undécima).”10 Vice-Captain Sergio Ramos, with the second-most seniority on the team, spoke into the microphone: “This is dedicated to Pitina, who helps us from above.11 Hala Madrid!” “Hala Madrid” is difficult to translate exactly. It means something like “Go, Madrid, Go!” or “Forward, Madrid!”

Real Madrid define themselves by results, and in particular by their performance in the Champions League. Anyone who plays for or manages Real Madrid is left in no doubt about the top priority every season.12 The pride of the community at the team’s record number of wins is matched only by their passion for doing it in their own unique way. In Lisbon, the team’s players felt the full weight of the community’s expectations, which went beyond simply winning. There is an intense sense of responsibility and pride that comes with representing what the community is and the values they stand for. Real Madrid’s secret to dominance on and off the field is the passion and values of their community members.

Play-by-Play of La Décima

Exactly 19:45. It is time for business. The atmosphere is electric. Real Madrid gets the ball first and kicks it from left to right. Atlético is defending deep, as expected. In the ninth minute, Diego Costa, Atlético’s leading goal scorer, jogs off the field, injured. Since he isn’t carried off, the announcers speculate that he hadn’t torn his hamstring again, like he did in the semifinals against Barcelona, but clearly he knows he can’t carry on. The announcers speculate whether Costa will be sidelined by injury, and, if he is, the gamble that playing him could cost his team one of only three valuable substitutions allowed very early in the game.

Real Madrid continues to control the ball, but Atlético is so well organized on defense that Real Madrid can’t develop any serious threats. As excellent as Atlético has been defensively, however, it has been ineffective going forward. At thirty-two minutes into the game, Real Madrid gets their best chance to score when Bale takes advantage of an Atlético midfielder’s careless pass. Space opens up, and thirty yards out the Welshman uses his world-class speed to sprint toward the goal. Bale fights off a sliding tackle (had Bale gone down, he might have drawn a penalty) and perhaps is somehow distracted enough that he then pokes the ball just wide of the post from twelve yards. Bale throws both hands over his face. The magnitude of his regret over the missed opportunity highlights how rare scoring opportunities are in soccer and how precious the ability to finish and score is.

Only four minutes later, Atlético responds. An Atlético corner is headed away by Real Madrid, then an Atlético player heads the ball back into the penalty area. There seems to be little threat, but Real Madrid goalkeeper Casillas sprints off his goal line into no man’s land. Atlético’s center back rises above a Real Madrid defenseman near the penalty spot to head the ball over the out-of-position goalkeeper who is too far off his line. Casillas is already desperately retreating, realizing that he misjudged his ability to reach the ball. He manages to get a hand on the ball heading toward the empty net, trying to claw it back, but to no avail. The ball crosses the line. GOAL! The goal scorer is tackled by his teammates on his celebratory run and ends up under a mass of Atlético players. Even though Real Madrid had seemed to be in control for most of the first half, they are losing. To make things worse, all Atlético has to do now is sit back, clog things up, eliminate space between players, and defend—which is what they are most comfortable doing.

As halftime approaches, Real Madrid players seem increasingly frustrated by Atlético’s defensive approach, which is tactically designed to break up Real Madrid’s typical beautifully fluid attacking play. Real Madrid looks like they need a break to regroup.

Halftime: Real Madrid 0–1 Atlético Madrid. During the fifteen-minute break, an announcer on one broadcast makes the point that Ronaldo and Benzema barely touched the ball near the Atlético goal area during the first half. Bale only had one real opportunity, which he missed.

When the second half begins, there is a desperate air to Real Madrid’s attacks. Atlético has moved more players to defense, which continues to frustrate Real Madrid, but Real Madrid is advancing the ball deeper and getting a few more opportunities to score. A Ronaldo free kick is deflected by the Atlético goalkeeper and off the bar at fifty-four minutes. A Ronaldo header glances wide at sixty-two minutes. And after an exhilarating sprint, Bale’s shot tamely goes into the side netting at seventy-eight minutes.

After eighty minutes, Atlético players seem like they are on their last legs, tired of chasing after and closing down on Real Madrid’s players and passes. Atlético uses their third, and last, substitution at eighty-three minutes. It seems Atlético can’t clear the ball out of their own third, never mind their own half. The pressure seems to be escalating to an explosion.

At eighty-nine minutes into the game, the Atlético coach implores the fans to cheer his team to the finish. At the ninety-minute mark, the referee decides to add five minutes of stoppage time. Three minutes into stoppage time, a Real Madrid corner kick by Croatian midfielder Luka Modric from the right swings toward the penalty spot. Sergio Ramos gets clear of everyone and powers a masterful header into the far corner of the net. GOAL! English TV commentator Ray Hudson, known for his descriptive color commentary, screams, “. . . magisteeerial . . . the corner kick sails in . . . and Ramos leaps . . . like a fresh salmon from a summer stream . . . it’s an exquisite header . . . with power and accuracy measured down to a pixel!”

The moment the ball swishes the back of the net, a man in a conservative blue suit leaps in front of King Juan Carlos of Spain in the center of the stadium’s VIP suite. The typically levelheaded and controlled Florentino Pérez, president of Real Madrid, raises his arms in celebration. Realizing that his passion is getting the best of him, he quickly pulls his arms down, wipes his glasses, straightens his suit jacket, and sits back down. He is trying to be sensitive and respectful to the president of Atlético Madrid, who is sitting near him.

A TV announcer screams, “We are heading for extra time!”

During the break before extra time, which is divided into two fifteen-minute halves, Atlético’s exhausted and disheartened players stretch out on blue mats laid out on the field, while Real Madrid players gather in a huddle to motivate themselves.

The first fifteen minutes of extra time is sloppy. When the second half of extra time begins, it’s still Real Madrid 1–1 Atlético Madrid. Atlético’s players’ minds now seem as tired as their bodies, and they start making mental errors.

GOAL! Gareth Bale had missed a few opportunities, but in the 111th minute he scores. Real Madrid’s Ángel Di María uses fancy footwork to surge down the left side between two or three weary Atlético players and flicks the ball toward the goal with his outside foot. The Atlético goalkeeper makes an incredible save with his left foot, but the ball still deflects toward the far post. Bale reads the trajectory and spin of the ball and maneuvers his body to head the ball at an acute angle from very close range just inside the top right post.

Ray Hudson jumps off his chair, screaming, “. . . it’s as electrifying as a hair dryer thrown into a bathtub . . . look at the balance . . . the timing . . . he’s like a master thief stealing the silverware in the dark night . . . the galácticos are gladiators tonight . . . and Gareth Bale is Spartacus!”

Looking for an equalizer, Atlético starts to attack harder than they have throughout the game. Their aggressiveness leaves them vulnerable to counterattacks. GOAL! In the 118th minute, the big-haired Brazilian Marcelo takes advantage, driving a low shot right through the left arm of the plunging Atlético goalkeeper. Imagine Andrés Cantor, the Argentine-born Spanish-language sportscaster, yelling his familiar, “Goooooooooal,” with the “o” stretched out over fifteen seconds—and then repeating it.

To make matters worse for Atlético, two minutes later, a tired Atlético player accidentally trips Ronaldo in the penalty box, and Ronaldo is awarded a penalty kick. GOAL! With a right-footed shot, Ronaldo puts the penalty into the back of the right corner of the net with precision and power. Ray Hudson describes the moment: “. . . absolute precision from the Dark Invader . . . this one is a death-ray hit from Real Madrid’s glamour boy . . .” It is Ronaldo’s seventeenth goal of the tournament, a record at the time.


8 There is debate in the media about whether Cristiano Ronaldo or Gareth Bale holds the world record for the highest transfer fee ever paid for a player, both by Real Madrid. Ronaldo joined the team in 2009 for what was reported at the time to be a €94 million ($131 million) transfer fee, while Bale’s fee was originally reported to be €91.5 million in 2013. However, because Bale’s fee was to be paid in installments, the total resulted in around €100 million. Spanish newspaper Marca reported that Ronaldo’s contract also had installments and the total amount was actually €104.7 million, which would make Ronaldo the world’s most expensive player.

9 The first team is the main, upper level team that plays in the first (top) division and major competitions.

10 Rob Hughes, “The Never-Ending Job at Real Madrid.” New York Times. http://www.nytimes.com/2014/05/28/sports/soccer/the-never-ending-job-at-real-madrid.html?_r=0.

11 Ramos was referencing the beloved Pitina Sandoval, Florentino’s wife of forty-one years and mother of their three children, who died in May 2012.

12 Michael Owen, “Champions League final 2014: Real Madrid ruled by Europe so they dare not lose to Atletico Madrid.” Telegraph. http://www.telegraph.co.uk/sport/columnists/michael-owen/10852545/Champions-League-final-2014-Real-Madrid-ruled-by-Europe-so-they-dare-not-lose-to-Atletico-Madrid.html.

The Real Madrid Way

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