Where Real Madrid leads, other clubs tend to follow – both on and off the pitch. But for once it is their city neighbours Atlético who appear to be setting a trend.
Atlético last week completed football’s second-biggest sale to a single private equity company, with Apollo Global Management buying 55% of the La Liga club in a deal that valued Spain’s third biggest side at about €2.5bn (£2.2bn).
Real is now expected to follow suit. The club’s all-powerful president Florentino Pérez will present its 2024/25 financial accounts to members at the city’s basketball arena this Sunday, when he is expected to make a pitch to alter their 123-year-old ownership structure by opening it up to overseas investment.
Pérez has engaged Clifford Chance to examine the club’s options, and a source with knowledge of his plans told The Observer that the 78-year-old wants to sell 10% of Real to establish a precise equity valuation, with a view to making further sales in future. As the most successful president in Real’s history, who has delivered 37 titles including six Champions League trophies in the last 11 years, it is perfectly possible that even the club’s conservative fans will accede to his wishes. A positive response this weekend would lead to Pérez calling a vote of all members at an extraordinary general meeting.
With annual revenues of more than €1bn, by the far the highest in world football, Real would not struggle to find private equity funds keen to invest, particularly as the club just completed a €1.9bn redevelopment of the Bernabéu Stadium, which hosted an NFL game for the first time last weekend between Miami Dolphins and Washington Commanders.
But one potential barrier to private equity investment is Real’s refusal to grant external parties voting rights, although the NFL have used similar structures to keep franchise owners in control of their teams while bringing in extra capital.
In the case of Atlético, club president Enrique Cerezo and chief executive Miguel Ángel Gil Marin have retained their minority stakes and will remain part of the management team in the short term, with most of Apollo’s stake being bought from Ares Management, who have made a significant return on the €180m they paid for 34% of Atlético in 2021.
Ares’s bet on the growth potential of elite football has paid off, with Apollo banking on their far bigger punt doing so even more spectacularly. Private equity interest in Spanish football is longstanding, with CVC Capital Partners paying €2bn for an 8.2% share of La Liga’s broadcasting and commercial income four years ago, although buying a controlling interest in one of European football’s biggest clubs represents an investment of a different magnitude entirely.
The received wisdom in football has been that Apollo picked Atlético as they were the biggest club available, given Real and Barcelona are both members’ clubs seemingly locked into fan ownership models, although that may not always be the case.
In addition to CVC and Apollo, other firms such as RedBird Capital, Silverlake and Sixth Street are increasingly looking to invest in football, and are open to buying stakes in clubs or leagues.
The Women’s Super League in England is understood to have piqued interest after they commissioned Goldman Sachs and Deloitte to explore ways of raising additional funding, although the WSL Board has yet to decide whether to sell a stake in the competition or take on additional borrowing.
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