They were slaves to their politics, they couldn't sell Bale the same year they sold Ronaldo (and as much as we all agree that Ronaldo made that team better, in order to rebuild those wages +117M were the best option for Real) and after scoring 2 goals in the UCL final, especially the wonder goal.
It's a shame though. If Madrid thought of this before offering a contract it wouldn't have ended like this.
They could try to rebuild faster past year, god knows why they didn't try, but Isco, Bale or Modric were at their hottest market value past summer and they didn't take advantage, probably because having an awful year after selling so many fan favourite players could've costed Florentino his chair, even if it was the right move in the long run.