LaLiga giant, Real Madrid, have agreed a 25-year deal with American sports and events company Legends worth €400 million a year and cumulating to €10billion.
According to Voz Populi, the deal will see Legends acquire a 20-per-cent stake in a new company that will manage Real Madrid’s revamped Estadio Santiago Bernabéu.
The stadium is already designed to be used for football, but also the women’s team and basketball.
The deal guarantees Real Madrid €250 million more on annual basis vs the figures they were bringing in from Santiago Bernabeu in the pre-pandemic environment. The US-based firm believes they can guarantee the figure because they expect profits for over €400 million a year.
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Legends is owned by Sixth Street, which holds a stake in the NBA basketball team, the San Antonio Spurs. It is reported that NBA games could be held at the Bernabéu, which is in the midst of a major redevelopment project that is due to be completed next year.
The American company will pay a total of €10 billion to be able to hold different events at the new Santiago Bernabéu.
The revamped Bernabéu will include a roof and a retractable pitch, which will open up the possibility of the stadium hosting other events such as music concerts. The stadium work, which forced Real Madrid to play home matches at the much smaller Estadio Alfredo Di Stéfano, home of its reserve and women’s teams, is reportedly costing between €800m and €900m.
Legends has projected that the revamped stadium could bring in between €400m and €450m per year, it is claimed.
This is not the first deal between Real Madrid and Legends. The US company already has an agreement in place to oversee the retail and digital strategy of the club and will launch a new club store as part of the Santiago Bernabeu renovations.
Legends is a company that has worked with the New York Yankees and the Dallas Cowboys and is owned by an investment firm, Sixth Street, who were early investors in AirBnB. Both Real Madrid and Legends work together to “create innovative, profitable and fan-focused experiences ”. One of the club’s highest priorities for the new stadium is to create an immersive experience that draws consumers and generates income outside of the general matchdays.
In December 2021, Real Madrid agreed on a second phase of financing that will allow for the completion of the Bernabéu redevelopment.
The club signed an extension to a financial package taken out in April 2019, albeit on significantly improved terms. The new package finances facility work not initially included in the project through a new loan for a total amount of €225m, with a term of 27 years and a fixed interest rate of 1.53 per cent.
The financing was structured by J.P. Morgan and Bank of America and will be directed towards resolving the challenges of accommodating a retractable pitch system in the new-look Bernabéu, ensuring that the stadium can fulfil more of a multi-purpose remit.