Zidane got stuck with players he didn't really want like Bale and James. Possibly Isco as well. Then they missed out on Pogba as well.
Their midfield is good on paper but how many of those players are motivated at this point? Modric, Isco, Casemiro and Kroos have won everything there is to win and then some. It's only human nature to rest on your laurels when you've achieved so much in your career. Now it's time for hungrier players who want that success and will give 110% to achieve it. It's inevitable.
I wrote several times here last year about our club needing a pressure washing, and I've felt that Real Madrid need the same, albeit for partially different reasons. And the first two sentences of your second paragraph really do make me wonder about some sort of institutional problem that exists at their club. Think about it - when's the last time a player from Barcelona left the club citing either a "need for new challenges" or needing new motivation or such? Players leaving due to lack of playing time, of course, but that's obviously an entirely different animal. Fucking Ronaldo left the club due to spats with Perez and wanting a new challenge (well, "challenge" anyway) in Italy. I can't think of any Barcelona players who have done the same. Somehow, they keep winning the league every year, win the cup pretty much every year, make deep runs into Europe even when they don't go all the way, and the core of their squad doesn't suffer a loss from motivation. These guys - the club-trained ones and the purchased ones alike - are still motivated to go into the next season, even with their purported-to-be donkey of a manager, and win trophies.
When Ramos had the power to veto Conte being appointed as RM manager after Lopetegui got sacked, that told me all I needed to know about how the player power at that club has grown out of control and become a serious problem, and why, honestly, it might sound like sacrelige to a lot of Madrid fans out there, but if Ramos himself wanted to leave, that might not be a bad thing at all. An aging, reckless, egomaniac who might be the captain of the squad and might be said to have a strong winning mentality, but he must not be that great of a captain if he can't get all that winning mentality influence to translate onto his teammates. You'd think finishing behind Barcelona every season in La Liga, losing to Barcelona at home every time they play (five straight home defeats in league and cup play, being outscored 14-2 in those games) would be the kind of thing that would, you know, fucking bother a team, right? Getting clowned by their biggest rival year-in and year-out. Somehow, even if it is, it's not showing in their performances.
They had such a flashy transfer window for all of about one week, spending out their ass to get Hazard and Mendy and Jovic, but all they have now is an unbalanced squad that can't defend to save their lives and doesn't look like they're any sort of contender at all for any trophies this year. All with a manager that has quickly become a strong target of criticism for not being all that subtle in picking and choosing which players he likes and which ones he doesn't. They're in serious, serious trouble and it might be a while before they can dig themselves out of it. And until they do, as much as many of us hate it, Barcelona is going to run that league until then because their signs of distress and struggle are much less and really only confined to European play.
This is the first CL season in a long time where it’s really difficult to tell who the absolute top contenders are. The glamour of most of the usual suspects has worn off quite a bit. The spanish giants are not the same anymore and Bayern won’t win shit in Europe with Kovac in charge. PSG and Man City are absolute underachievers, Chelsea is trash. This could open up some space for Juventus but even they seem to be struggling right now. Don’t know about Liverpool, but from what I have heard they were pretty bad against Napoli. But I still expect some of those teams to knock out Juventus sooner or later.
Thinking myself that Man City is destined to break through one of these years, but Laporte's injury could make a serious mess of things for them. Their center half pairings are utter shambles without him. Definitely an opportunity for a Napoli or Atletico side to make a run this year, but as alluded to above, Liverpool are probably the favorites of them all.