Well, this discussion has been going on for a few years now. At this point it would be hard to deny that there has been a general problem for PL teams in CL and EL. With the exception of Chelsea 2011-12, they often tend to get knocked out as soon as they face tough competition, if not before that.
It's a bizarre feeling when a few years ago you saw people saying "I hope we get drawn against Manchester United." That's not something you would hear 10 years ago. About any top PL team, for that matter.
I agree that most of the best players tend to gravitate towards the clubs he mentioned. In particular the Spanish ones.
Steven Gerrard said this in an interview:
"We had a private conversation and he said, 'Give us another season and wait for Barcelona, you are too good for Arsenal'.
"Last summer when he was out in the cold and training on his own that’s the conversation I had with him. I said, 'Don’t go to Arsenal’.
"I would have been really sad and disappointed to see Luis go to Arsenal. With all due respect to them, I said to him that he was too good for Arsenal. I said if you score 30 goals for us and win the PFA Player of the Year, the press Player of the Year – I knew he was going to win them – I told him Real or Barcelona will come for you.
"I think he got the wrong advice last year from people around him, from people saying he needed to play in the Champions League and it did not matter who it was for.
"I have experience of the Spanish clubs myself and I know if you play well they will come back and come back. I knew they’d be back for him as well.
"I just thought for his own sake, to get respect off the Liverpool fans, he had to give us at least one year. A lot of people might still think he should have given us one more, but my big dream was to play for Liverpool, and the foreign players’ big dream is to play for Real Madrid or Barcelona, that’s a fact."