I planned to write this piece shortly after receiving confirmation the youngster signed with Real Madrid, but the insatisfaction surrounding the transfer by Manchester City fans made it seem pointless at the time. Now the fire is gone and it's time to explain the transfer using my privileged view, my source, like any other, is safeguarded by the international confidentiality laws. It's important to add that part of the article is a product of common sense, for example: if Pellegrini asked for Isco and Manchester City employees traveled to Spain it's obvious the club started working on it.
I was able to confirm Manuel Pellegrini was set to be the next Manchester City manager and his interest in bringing Isco along on May 12th. The club agreed and started working on it, travelling to Spain to negotiate with Málaga, talks continued for two weeks. Up to this moment no other club showed concrete interest on the young midfielder. Real Madrid sounded Málaga and met with his father at the Bernabéu, showing their interest and questioning if the player had any interest in joining the club. Manchester City took notice of it, but neither club submitted a formal bid.
Isco declared in a public interview he considered Pellegrini a second father, making the move more likely, pushing Manchester City to inform Málaga their they could pay the 35m release clause, starting direct talks with the player entourage, Isco made clear his interest of going with Pellegrini to Manchester, but that was only going to be decided after he finished representing his country at the U21s.
Isco couldn't wait, agreeing terms with Manchester City on June 15th, 3 days before the U21s final. The transfer was as good as done and both clubs waited for his return to announce the deal, in the meantime City used the opportunity to pressure Málaga for a lower transfer fee, below the full release clause.
Florentino Pérez discovered the deal, calling Málaga showing their willingness to cover the release clause immediately if Isco went to the capital, but talks with his father were unproductive for the next few days, club couldn't guarantee regular playing time, something certain at Manchester City. In a last ditch effort Zinedine Zidane personally traveled to Israel to deal with Isco, proving he could start for Real Madrid and his magic worked, the player now considered the possibility of playing for Los Blancos for the first time.
Málaga's vice-president said in a press conference selling Isco wasn't necessary and if the right offer didn't arrive he wasn't going to leave the club. Behind the scenes leaked information showed Málaga knew Isco was good as gone and counted on his transfer fee to cover more debts. Soriano and Pérez backed off, refusing to pay the full release clause and now Isco had agreed terms with both teams. The only differential was Pellegrini and he was on vacation.
Real Madrid reached an agreement with Málaga before Manchester City: 27m euros. The english team made an equal offer, but Málaga's owner favored keeping the player in Spain. Málaga agreed his sale to Real Madrid. Isco was still undecided, his quotes slamming Real Madrid appeared on the cover of a local paper in Valencia to make things worse and Florentino Pérez hurried to persuade his father, offering 8m euros if his son signed with Real Madrid.That's the difference between 27m euros and the 35m release clause.
Manchester City didn't offer any money to the player entourage, deciding that keeping the current 30m bid was the best course of action. Isco was announced by Real Madrid days later and Pellegrini arrived in Manchester to discover Isco had a change of heart.
The first transfer saga that I had many details behind the scenes, proving once again how negotiations are volatile and unpredictable, tables are turned and it's all about the money in most cases. An interesting exception is Real Madrid trying to sign Neymar offering a insane amount of money, reported sums reached 150m euros, but his wish to join Barcelona was vital until the very end. The Catalans had to pay 40m to intermediaries, only spent less money and used similar methods. Both had to pay intermediaries.
Manchester United missed out on many targets throughout the years by refusing to pay intermediaries, most recently Lucas Moura and Eden Hazard, but it's a common practice in the market unavoidable if the club desires to bring specific players.
I hope this post will help football fans understand some of the complications regarding transfers, unfortunately it's only the tip of the iceberg and I look forward to making posts similar to these.
Special thanks to the person that checked the details for me all over again and opened up the possibility of writing this text with solid information in the last two months.