For the second straight year, Real Madrid and Barcelona arrived in the Champions League semi finals with illusions of an all Spanish Clásico final, only to find themselves disappointed. Real Madrid almost completed the unlikeliest of comebacks in the final minutes against Borussia Dortmund as the legendary Estadio Santiago Bernabéu was raging. Los Blancos will rue their early missed chances, coming up just short against a Dortmund side that was ultimately the better team for most of the two legged tie. Barcelona, on the other hand, were without a fully fit Lionel Messi and were absolutely steamrolled by Bayern Munich, who are the likely favorites to lift the big-eared trophy at Wembley on May 25th.

Dortmund’s meteoric rise and Bayern’s emphatic victory are clear signs that the balance of power in Europe’s premier competition has shifted away from La Liga and towards the Bundesliga. Having led the pack in infrastructure, attendance, and low ticket prices for quite some time, the German first division can now genuinely claim to house the two best squads in world football. Bayern Munich look to only get stronger going forward, with Pep Guardiola replacing current coach Jupp Heynckes at season’s end. It also was revealed just before the semi finals began that Bayern activated the 37 million euro release clause in the contract of Dortmund star and full German international Mario Götze. It was a crucial blow for Bayern, scoring an incredible young talent and weakening their biggest domestic rivals in the process. Dortmund were able to overcome the ill timing of the news and even held off Madrid without Götze for most of the second leg. They might find it harder to maintain their success beyond this season, with Götze already heading for the exit and Europe’s wealthiest clubs hoping to swoop in and sign their other top players. Marco Reus, Robert Lewandowski, Ilkay Gündogan, and Mats Hummels are rumored targets for Manchester City, Manchester United, Real Madrid, and Barcelona, respectively.

Whether the fates of Bayern Munich and Borussia Dortmund head in different directions is a story for the future. At present, they will battle it out in the first all German final in European Cup history. But while the German clubs’ futures will have to wait to be discussed, the semi final exits of Madrid and Barcelona mean that questions surrounding them will be raised now. For Barcelona, they were utterly outclassed without Lionel Messi, doing nothing to disprove the notion that they are a one man team. Real Madrid were exposed for lacking of a system that can dictate the game against strong opponents, and have been consistently frustrated trying to break down organized and compact defenses.

So what does the future hold for the Spanish giants? If José Mourinho’s post-match comments on Tuesday were any indicator, Madrid’s future will likely be without the Special One at the helm. Potential replacements who’ve been mentioned by the Spanish media include Heynckes and PSG boss Carlo Ancelotti. Less likely candidates are Dortmund’s own Jürgen Klopp and Spurs manager Andre Villas-Boas. Of course, there is still the possibility that Mourinho will sit down with club president Florentino Pérez and decide to remain at the Bernabéu. Whoever is in charge next year, it is of utmost importance that Madrid establish a strong sense of identity and unity, along with a coherent style of play.

A season without a Champions League or La Liga trophy represents a failure for Real Madrid, and failures generally lead to new Galácticos wearing the all white kit the following season. It’s been widely reported that PFA Player of the Year Gareth Bale is the primary target for Pérez, but Tottenham will not let go their star go without receiving a hefty sum in return. What is certain is that this year Madrid needed another reliable scorer to take the load off of Cristiano Ronaldo, and that was lacking in some key games. Bale has 24 goals in all competitions this season for Spurs, including several big game winners. Gonzalo Higuaín’s performance on Tuesday did not bode well for his future in white, and Madrid have been linked with a whole host of top forwards along with Bale. Among those linked is Robert Lewandowski, who obviously showed Madrid first hand the damage he can do around the goal, but is also reported to be a top target for Sir Alex Ferguson. Other names mentioned are Sergio Agüero, Edinson Cavani, Luis Suárez and, less likely, Radamel Falcao. Of that group, Agüero could be the most plausible acquisition; he has had a much tougher season this year than last, struggling with injuries, and City already have a number of forwards and are looking for more. Agüero began his European career with neighbors Atlético Madrid and reportedly desires a move back to the Spanish capital. If City bring in another big name forward this summer, they may be content to let Agüero leave.

While the forwards will probably garner all the Galáctico headlines, perhaps most important for Madrid to resolve is the situation with Xabi Alonso. The former Real Sociedad and Liverpool man has not indicated that will renew his contract when it expires in the summer of 2014. If Mourinho leaves as expected, Alonso may even wish to follow him to his next destination. The club must now decide whether to get something back for him this summer or look him leave for costless the next. Alonso had two uncharacteristically terrible performances against Dortmund, as Jürgen Klopp’s tactics effectively stifled the Basque passing maestro. Dortmund’s own Ilkay Gündogan, mentioned above as a potential target for Los Blancos, outplayed Alonso in a similar position in the center of the park. If Alonso goes, possibly along with Mourinho or for a Liverpool return, Gündogan could find himself on Pérez’s radar soon. PSG’s Marco Verratti and Sevilla’s Geoffrey Kondogbia are two other players linked to Madrid. If Ancelotti takes over this summer, Verratti might be easily convinced to join him in trading the French capital for the Spanish one.

Another name being touted as an Alonso replacement is Sociedad youngster Asier Illarramendi. A swap of Alonso for Illarramendi would be very intriguing, especially with La Real in position to secure Champions League football for the upcoming season. Madrid would get a promising young talent in exchange for the man who has been their engine in midfield for the past four seasons, while Alonso would return to the club where he made his professional debut. There would hopefully be the added pleasure of Alonso orchestrating La Real’s first Champions League campaign since the 2003-2004 season.

It is also possible, especially if Madrid spend big on forwards, that Pérez will determine that the players needed to replace Alonso are already with the club. Luka Modric was signed just last summer for 33 million pounds, and current Dortmund loanee Nuri Sahin is still on Madrid’s books. Then there are promising Castilla players Casemiro and José Rodríguez waiting to step up in the future. If there is no room in the first team when they feel they are ready, they will be looking for new clubs in due time.

One position where an upgrade is unquestionably needed is right fullback. Michael Essien performed admirably in that role a few times this season, but he is a natural midfielder and only on loan for the season from Chelsea. If Mourinho goes, Essien will almost certainly not be back. Álvaro Arbeloa is a good player, but lacks skills going forward, and Los Blancos have no quality replacement when he goes down injured. Madrid would do well to exercise the buyback option on former canterano Dani Carvajal, who has gotten the high-level playing time he needed at Bayer Leverkusen this season. Current Castilla defender Nacho is also an option at fullback, but prefers to play in the center of defense.

Madrid must get rid of some deadweight (Kaká, Ricardo Carvalho) and possibly a few others rumored out (Higuaín, Fabio Coentrão, Pepe), resolve the Xabi Alonso situation, and bring in a world class finisher, and they should be right back where they have been the past three years, with a very good chance to advance to their first final since they lifted the cup in 2002. Canteranos must be promoted or solid depth bought on defense, especially at right back. If the injury bug bites the back line again, squad players must be able to fill in. In order to have a shot at taking down Bayern Munich or a fully fit Barcelona, or solidly outplaying a Dortmund, Manchester United, or Juventus as they believe they should, Madrid must develop a better sense of identity and style of play. They must embrace the high pressing game, using their speed and physicality to out-hustle the opposing team. At every competition exit in the Mourinho era, and the several La Liga games that ending up costing them titles, Los Blancos have looked disjointed, lacking ideas, and been unable to finish when needed. In order to lift La Décima, Madrid must be able to impose their will on any opponent.

Turning to Barcelona, it is evident that change is also needed. Messi was not fit against Bayern, but even with La Pulga at full force, the Blaugrana would have been hard pressed to match Bayern’s intensity and physicality. The team clearly needs another attacking player to take the load off of Messi, preferably one comfortable out on the wing. Alexis Sánchez looks good against lesser La Liga sides, but has failed to prove he belongs with Barcelona in important matches. David Villa has not been the same since breaking his leg at the Club World Cup in 2011 and could sorely use a change of scenery. Potential summer acquisitions for the Catalans include Brazilian rising star Neymar, along with the likes of Agüero, Suárez, and Cavani. All would be interesting options and could add a new dimension to Barça’s already potent attack.

Fantasizing of Neymar playing alongside Messi is certainly fun, but where Barcelona need help most is at the back. With club icon Carles Puyol struggling for regular fitness, and two very attack-minded fullbacks in Dani Alves and Jordi Alba, the Barça back line was consistently exposed by top quality opposition this year. Gerard Pique seems to have regressed, and appears not capable of being the vocal leader in a central defensive partnership, like Puyol was for Barça and Sergio Ramos now is for Spain. Marc Bartra has shown promise, but was not ready for the biggest stage. After buying players at every position but center back the last several years, Barça must ink a player like Mats Hummels or Vincent Kompany. Puyol may play again for Barcelona, but his days as a regular are clearly numbered, and a long-term replacement must be found.

After yesterday’s loss to Bayern, Tito Vilanova insisted that Barcelona do not need a lot of changes, but he may find himself on the outs after failing to live up to Pep Guardiola’s lofty standards in his first season in charge at the Camp Nou. If the club does decide to retain Vilanova, he must do a better job of rotating his squad. The Blaugrana came into the tie with Bayern Munich in bad shape physically. Messi and Sergio Busquets were too injured to make an impact, while Xavi and Andres Iniesta looked clearly worn out and not at their masterful best. Alex Song was bought to spell Busquets, but spent far too much time on the bench all year. Cesc Fàbregas, also linked with a return to Arsenal in recent weeks, has not had sustained success as a forward, and should have been used along with Thiago in a better rotation with Xavi and Iniesta. The core players in this Barcelona side have all played a tremendous amount of games over the past 5 years and are obviously burned out.

Another thing Barcelona may consider is adopting a more defensive formation. They have scored plenty of goals this year but have also conceded way too many. With a fit Messi they might have scored against Bayern, but overcoming a 7 goal difference is a tall order even for the diminutive Argentine. If Barça come across their old leader Guardiola’s new team in next years Champions, they will need a different game plan, and that could maybe include two defensive midfielders. If they cannot part with the 4-3-3, and don’t bring in top class wide forward, Jordi Alba could be brought up the left wing, with another fullback like Adriano or perhaps Eric Abidal sitting behind him and helping the central pairing on breaks. Even Neymar and Hummels might not be enough against Bayern or Madrid if the fullbacks are consistently in a position to be exposed.

In the end, talk of Barcelona’s demise is exaggerated, and with a few good signings, better squad rotation, and most importantly, a fit Lionel Messi, they should be one of the favorites to win the Champions League again next year. Some players must be let go, like Alexis, Villa, and maybe even Cesc, and the proper reinforcements brought in. The jury is still out on whether Tito Vilanova is the right man to lead the team. He didn’t get a very fair shake this year with his health issues so it would be a bit of a shame to see him let go. The business of football is often not fair, though, and Barcelona have also been linked with outgoing Bayern boss Heynckes.

Both Real Madrid and Barcelona are still very good teams, and do not need complete overhauls as much as slight tweaks to return to the summit of European football. Bayern Munich are certainly not going away and should only continue to improve. Borussia Dortmund may be raided yet again this summer, but have a strong system in place to remain perpetually competitive. The English clubs will all be looking to come back stronger, and Paris Saint-Germain and Juventus have laid the groundwork to be competitive in the Champions League for years to come. No one is rolling over and letting the Spanish giants have their way, so they must make smart decisions in order to return stronger next season.