Real Madrid, the European soccer behemoth, closed in the United States-based Sixth Street investment firm, will buy a 30 percent stake in the team’s stadium operations.
The announcement Thursday came amid growing optimism among executives that Real Madrid, a 13-time European champion, could make Kylian Mbappé, one of the most sought after players in world soccer, as a free agent on a contract that could do him the highest-paid athlete in Real’s history.
Under the terms of the contract, Real, which strolled to a 35th Spanish championship this month, would have no restrictions on how it spends its money. Capturing Mbappé would be a coup for Real, which has failed to persuade his current club, Paris St.-Germain, to receive as much as $ 200 million for last summer’s postseason.
The deal between Real and Sixth Street, for which the team will receive about $ 380 million, also includes Legends, the American sports event management and hospitality company that is partly owned by Sixth Street. The partnership will last for 20 years and run through a joint venture that will include all of Real’s in-stadium income, with the exception of season-ticket sales.
The investment is the latest part of Real’s attempts to grow new revenue streams from its celebrated stadium, which is undergoing a $ 1 billion retrofit, after which games will be played on a retractable field.
“The transformation of the Santiago Bernabéu Stadium will be a turning point in the history of Real Madrid,” Real’s president, Florentino Pérez, said in a statement. “This agreement strengthens the club’s goal of continuing to increase the stadium’s revenues from both sporting and other types of events.”
While the Spanish Soccer League final is scheduled to take place in the world soccer landscape. Despite generating more wealth over a year than practically any other soccer team, the team has struggled to compete for the best talent with clubs supported by deep-pocketed Arab states and billionaires. Turning the Bernabéu into what club officials have likened to a version of Madison Square Garden may help maintain its muscle in the marketplace.
The agreement also bears some hallmarks of one Spain’s domestic league, La Liga, signed with another investment fund, CVC Capital Partners, that Real refused and is suing against. CVC agreed to be a member-owned Athletic Club from Bilbao for more than $ 2 billion in total , thought was too steep.
The Sixth Street arrangement, which also owns a portion of the NBA’s San Antonio Spurs, is limited to the investment fund’s sharing in profits, not revenue, from the venture.
“Real Madrid’s Santiago Bernabéu is hallowed ground in the world of football, and we are honored to be joining this partnership for an innovative, long-term strategic , who was founding partner and chief executive of Sixth Street.
Attending public stadiums was a benefit when the supporters were barred from attending public events. It returned to the arena this season even though construction work continues. The stadium’s refurbishment is expected to be completed in time for the start of the 2023-24 season.
The team’s finances are largely under control even though the stadium debt is almost $ 1 billion. Servicing costs about $ 40 million a year. The cash infusion from Sixth Street will mean the club’s short-term debt will be wiped out and replaced with $ 260 million available to spend.
Those finances could allow Mbappé. The striker said recently that he was close to announcing his plans for next season. PSG, his current club, has offered him a contract extension worth more than the offer from Real. But Mbappé has made several comments showing his desire to play in Madrid, a destination and a team that has been magnets for the game’s best talent.