Pellegrini was the surprise choice for Florentino Perez as the construction magnate returned amid much fanfare to the Madrid presidency in the summer of 2009. The South American had led Villarreal to second place in La Liga the previous season and was recruited on the advice of sporting director Jorge Valdano to lead a new project on the pitch.
Madrid were eager to react after fierce rivals Barcelona claimed the treble in 2008-09 under Pep Guardiola. Bernd Schuster had been sacked during that season, with Juande Ramos brought in until the end of the campaign. But the return of Perez meant changes. Big changes.
Pellegrini was unveiled as Real embaked on a spectacular summer sprending spree. The club twice broke the transfer record, first by bringing in Kaka for €65 million and then Cristiano Ronaldo for €94m. Xabi Alonso and Karim Benzema also arrived in big-money deals as Los Blancos built a squad to challenge Barca.
However, even in those early days there were problems. Pellegrini had been keen to keep Wesley Sneijder and Arjen Robben, but both were sold because they had been brought in by previous club chief Ramon Calderon. And despite the significant outlay, Real recruited only one defender: Raul Albiol.
"I wouldn't say coaching Madrid is an impossible job," the Chilean said this week. "It's an honour. But you have to realise when you take charge of Madrid, you have to accept that politics play a big role."
Pellegrini saw that from day one and admitted that the squad shaping was out of his hands, later claiming that the team lacked balance due to the scattergun approach in the transfer window in the summer of 2009.
"I didn't have a voice or a vote at Madrid," he later said in an interview with Chilean newspaper El Mercurio. And he added: "I can't get anything out of an orchestra if I have the 10 best guitarists but I don't have a pianist or a drummer. He [Perez] sold players that I considered important."
On the pitch, things started well but began to go wrong as early as October. Without Kaka and Ronaldo, although still with a strong side featuring the likes of Guti, Raul, Benzema and Rafael van der Vaart, Madrid lost 4-0 to Segunda B outfit Alcorcon in the Copa del Rey. That was on October 27 and Pellegrini would never really recover.
A press campaign against the Chilean coach soon started and he later revealed that the relationship with Perez turned completely cold during those months. In La Liga, meanwhile, Madrid kept pace with Barca until late in the season, but the writing was on the wall when Pellegrini's side crashed out of the Champions League in March - beaten in the last 16 by Lyon.
"We didn't win the Champions League because we didn't have a squad properly structured to be able to win it," Pellegrini said after he had left. Not that Perez saw it that way, of course. He had spent €254m on players in the summer and a second-round exit was simply not good enough.Florentino gave his coach an ultimatum after their European exit: either win La Liga or you will lose your job. And even though the Chilean led Madrid to their highest points total ever in the Primera Division (96), it was not enough to claim the title as Barca finished with 99.
Guardiola continued to accumulate silverware for the Catalan club and again, Perez reacted - this time by bringing in the one man he thought could bring an end to Barca's dominance: Jose Mourinho.
While Pellegrini had lost to Alcorcon in the Copa and Lyon in Europe, Mourinho had led Inter to the treble and capped it off by beating Bayern Munich in the Champions League final at the Santiago Bernabeu. And by then, he had already reached an agreement to manage Madrid.
Pellegrini played attractive football and his Liga campaign was strong, but he was not considered a winner like the Portuguese and despite winning three trophies at City, that assessment is probably correct.
In reality, though, the Chilean did not stand a chance at Real. Because he never had a proper say. When he left, Mourinho later took control of signings and dispensed with Valdano as well. He did it his way. For Pellegrini, that was never an option. He was merely a puppet at Madrid and the show was always destined for an unhappy ending.