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Founded on 6 March 1902 as the Madrid Football Club, the club has traditionally worn a white home kit since inception. The word real is Spanish for "royal" and was bestowed to the club by King Alfonso XIII in 1920 together with the royal crown in the emblem. The team has played its home matches in the 81,044-capacity Santiago Bernabéu Stadium in downtown Madrid since 1947. Unlike most European sporting entities, Real Madrid's members (socios) have owned and operated the club throughout its history.

The club was estimated to be worth €3.8 billion ($4.2 billion) in 2019, and it was the highest-earning football club in the world, with an annual revenue of €750.9 million in 2018.[6][7] The club is one of the most widely supported teams in the world.[8] Real Madrid is one of three founding members of La Liga that have never been relegated from the top division since its inception in 1929, along with Athletic Bilbao and Barcelona. The club holds many long-standing rivalries, most notably El Clásico with Barcelona and El Derbi with Atlético Madrid.