Spanish team around Madrid swimming butterfly (3,7)
I believe the answer is:
red admiral
'butterfly' is the definition.
(red admiral is a kind of butterfly)
'spanish team around madrid swimming' is the wordplay.
'spanish team' becomes 'Real' (Real Madrid).
'around' is an insertion indicator.
'swimming' indicates anagramming the letters (letters swim around into a new order).
'madrid' anagrammed gives 'dadmir'.
'real' going around 'dadmir' is 'RED ADMIRAL'.
(Other definitions for red admiral that I've seen before include "of interest to entomologists?" , "Tiny flier" , "Winger" , "Russian sailor" , "Beautiful creature" .)