Florentino Perez resigned as president of Real Madrid on Monday, leaving the club after spending millions to assemble a star-laden roster that has been unable to claim a major title in nearly three years.
The resignation came a day after Real Madrid was beaten 2-1 at Mallorca, leaving the club in third place in the Spanish league, 10 points behind front-runner and arch rival Barcelona.
Perez told reporters that the board had accepted his resignation -- effective immediately -- and that it had unanimously appointed Fernando Martin Alvarez as his successor.
"The club needed a change. We're not in the best shape," said Perez, who took over as president in July 2000. "We had tried changing coaches several times and that didn't seem to work, so the only other option left was for me to leave."
Besides the loss at Mallorca, Madrid was beaten 1-0 at home last Wednesday by Arsenal in the European Champions League.
"I have spent some of the most intense and best years of my life as president of the club," Perez said.
Perez said that during his presidency Madrid had become the richest club in the world and had become master of its own destiny, but had failed to secure the success on the field that the fans expected.
"This change can propel the club forward for the rest of this season and into the future," he said.
Perez, who is also president of construction giant ACS, took charge of the powerhouse after winning a poll of club members.
He set out to make the club a global brand, spending 415.3 million euros (US$492 million) on 17 new players, including a record 75.1 million euros to acquire French midfielder Zinedine Zidane from Juventus in 2001.
Initially using money from the sale of the club's training ground on prime real estate to the Madrid city government, Perez also acquired players such as England's David Beckham, Portugal's Luis Figo and Brazil's Ronaldo, earning the collection of superstars the title of "Los Galacticos."
The strategy resulted in increased financial success based on exploitation of Madrid's huge marketing potential around the world, especially in Asia.
The powerhouse recently replaced Manchester United as the world's richest soccer club according to an independent report released by accounting firm Deloitte.
Madrid increased its revenue by 17 percent to 275.7 million euros for the 2004-2005 season.
Madrid enjoyed initial on the field success under Perez, winning a record ninth European Champions Cup in 2002 and the Spanish league titles in 2001 and 2003 -- the latter for a record 29th time.
However, the team's performance declined following Perez's surprise decision a day after winning the 2003 title to sack Vicente del Bosque, the coach who had led the team to its most recent triumphs.
The next season, Beckham's first, Madrid failed to win a trophy for the first time in Perez's presidency and lost a club-record five straight to end the year.
Perez still secured a landslide re-election as club president in 2004, pledging to turn Madrid's Santiago Bernabeu Stadium into "the world's best."
The centerpiece of his project was to refurbish the 80,000-seat venue with a steel-and-glass sliding roof, which would be in place by 2008. A new training ground also was inaugurated east of the city, near Madrid's international airport.
The star-studded team's slump has continued unabated ever since, with Madrid unable to win a major trophy despite the appointment of six coaches in three years: Vicente del Bosque, Carlos Queiroz, Jose Antonio Camacho, Mariano Garcia Remon, Vanderlei Luxemburgo and Juan Ramon Lopez Caro.