Real Madrid Secures $380 Million From Sixth Street


The Spanish soccer giant has agreed to a joint venture with the investment firm Sixth Street in which profits from the Santiago Bernabéu Stadium will be shared.

Real Madrid, the European soccer behemoth, closed a deal in which the investment firm Sixth Street, based in the United States, will pay about $380 million for 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 complete a deal to sign Kylian Mbappé, one of the most sought after players in world soccer, as a free agent on a contract that could make 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 been chasing him since failing to persuade his current club, Paris St.-Germain, to accept as much as $200 million for him during last summer’s postseason.

The deal between Real and Sixth Street also includes Legends, an American sports event management and hospitality company that is majority owned by Sixth Street. The partnership will last for 20 years and be run through a joint venture that will contain 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 significantly increase the stadium’s revenues from both sporting and other types of events.”


While Real remains the dominant player in Spanish soccer and will compete in the Champions League final once more next week, it has been facing pressure to keep up with changing forces in the global soccer landscape. Despite generating more wealth year over year than practically any other soccer team, Real has struggled to compete for the best talent with clubs backed 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 it maintain its muscle in the marketplace.

The agreement also bears some hallmarks of the one Spain’s domestic league, La Liga, signed with another investment fund, CVC Capital Partners, that Real rejected and is suing against. CVC agreed to part with more than $2 billion in return for almost 10 percent of the league’s broadcast income for 50 years, a price that Real — and the league’s other best-supported team, Barcelona, as well as member-owned Athletic Club from Bilbao — thought was too steep.

Real officials have pointed out that unlike that deal, the arrangement with Sixth Street, which also owns a portion of the N.B.A.’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 to invest in the innovative, long-term strategic vision that has guided the club’s consistent success over its storied history,” said Alan Waxman, a founding partner and the chief executive of Sixth Street.

Real benefited from the pandemic by moving to its training stadium at a time when 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 Real to add reinforcements should it manage to secure Mbappé. The striker said recently that he was close to announcing his plans for next season. P.S.G., his current club, has offered him a contract extension worth far more than the offer from Real. But Mbappé has made several comments indicating his desire to play in Madrid, a destination and team that have been magnets for the game’s best talent.


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