Real deal keeps analysts guessing

When he took over last year, Perez pledged to rid the club of its debt problems and secure Real's place at the top of European football. Few expected him to do it so quickly.

In May the construction magnate tied up a property deal which, when completed, should wipe out the club's debts. Perez has reached an agreement with the City of Madrid and the regional government to sell 20 per cent of a 110,600 square metre site it owns in the financial district. Currently the site hosts training pitches, a pavilion and other sports and social facilities. The city council are prepared to change their planning law to allow developers to build four 215m-high office blocks on the land.

The club have received six offers following a two-month tender process and are expected to make a decision in the next 10 days. Analysts believe it could raise more than £200m, allowing the club to cover their debts and much of their transfer spending.

The remaining 80 per cent of the land will be given to the city council to develop as a public park and a 20,000 seat sports pavilion that would be a centrepiece of Madrid's planned bid for the 2012 Olympic Games.

"With the sale of our sports grounds, we will cancel our debts for good," said Perez. "This will allow Real Madrid to live under normal economic conditions for the coming decades."

The proposed deal has had its critics, however. The socialist opposition in the city council is against it, mainly because they oppose the area being developed for commercial use. Others complain that the public administration is helping the club overcome their financial problems.

UEFA, European football's governing body, are also watching closely as they consider ways of making the game's financial practices more transparent.

Perez says that the deal has been one of the most above-board transactions in the history of football and Madrid urban development.