FIFA banned Real Madrid and Atlético Madrid on Thursday from signing players in the next two transfer windows for breaching rules when registering players under the age of 18.
The Spanish clubs can still sign players in the current transfer window, but then won't be able to register anyone until after the 2016-17 season. The teams can reach agreements to buy players but cannot register them to play until then.
FIFA also issued reprimands to both clubs and gave them 90 days to regularize the situation of all minor players.
"The two clubs were found to have violated several provisions concerning the international transfer and first registration of minor players as well as other relevant provisions with regard to the registration and participation of certain players in competitions," FIFA said in a statement.
Both teams released statements saying they will appeal FIFA's sanction, and the Spanish league has come out defending the local clubs and their history of protecting the rights of underage players.
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"Our club does not agree with the sanctioning ruling from the international football body and is studying the documentation received to lodge an appeal," Atlético Madrid said.
Real Madrid said the FIFA's ban was not justified.
The club said it never used foreign underage players without registering them with the Spanish soccer federation, as claimed by FIFA, nor signed them without complying with the required procedures established by the governing body. The club added that it has always informed the local federation about all the players on its youth academy, another alleged breach of regulations by the club, according to FIFA.
"Real Madrid will appeal to all levels of sporting courts because it considers this decision inappropriate," the club said.
"Spanish football, through their clubs, supports the policy of protecting minors, and the concern for their development and for their training," the league said in a statement in response to FIFA's ban on Thursday. "The conduct of Real Madrid CF and Club Atlético de Madrid have been always in favor of the respect, the interest, and the training of the child."
The league said "after learning the sanctions to Barcelona, Real Madrid and Atlético," it concluded that the current regulation "does not really protect the child."
"La Liga has conducted analysis on the adequacy of the rules of 'protection' under FIFA, as well as the different standards of the European Union, the Swiss state and Spain, and based on the same, will denounce to the appropriate bodies, the current part of the regulation for the transfer of players under age which does not conform to the law of the protection of minors," the league said.
Last year, the club called reports of a possible ban "false" and said it had "always scrupulously adhered to the FIFA regulations." It also mentioned "its absolute commitment to the defense, protection and the correct and healthy development of minors."
Spanish media said that among the youngsters involved in irregular signings by Real Madrid were the sons of former player and now coach Zinedine Zidane.
Madrid was not negotiating any new signings but the ban could force president Florentino Perez to scramble to bring in new players. Atlético Madrid, the Spanish league leader, also was not working to add any players to its squad in this window. Both clubs may negotiate deals to bring back players that were on loan to other clubs. The teams can also sell players if wanted.
Barcelona served a similar sanction for 2015 after stalling the transfer ban to enable them to sign players in the 2014 window, including Luis Suarez, Ivan Rakitic and Claudio Bravo. The Catalan club signed players such as Arda Turan and Aleix Vidal after the ban took effect again, but couldn't register them until this month.
FIFA said the latest wave of punishments — which include fines of 900,000 Swiss francs ($900,000) for Atlético and 360,000 Swiss francs for Real Madrid — highlight the success of efforts to protect the rights of underage players.
"The provisions relating to the protection of minors need to be strictly applied," FIFA said. "Opening up the door to exceptions beyond those carefully drafted and included in the regulations would unavoidably lead to cases of circumvention of the rationale for these provisions."
The players at the heart of Madrid cases were featured in games between 2005 and 2014, according to FIFA.
The Spanish league also strongly defended Barcelona when it was banned, saying the club and "the rest of the Spanish professional football clubs" have always been in "favor of respect for minors and their interests."
The Spanish soccer federation was fined 500,000 Swiss francs ($495,000) for violating rules related to the registration of minors in the Barcelona case, and it could be punished again this time.
"Disciplinary proceedings involving the (federation) were opened in relation to the Atlético de Madrid and Real Madrid cases, but were then suspended pending the outcome of the (Court of Arbitration for Sport) proceedings in which the (federation) was the appellant in relation to the Barcelona case," FIFA said.