The New Bernabeu

Better than having the stadium named Allah Bernabeu

AS has always been anti-Florentino and, usually, most of what they publish is garbage, but I'm afraid they have a point here.

If Florentino is really planning on burying the club under a mountain of debt for 35 years, I hope his plan gets rejected by the assembly.

Maybe he should think about strengthening the team instead.

About 4 years ago we reached a deal with an oil company from the middle east called IPIC to sponsor the construction deal. However with the multiple delays thanks to the municipality of Madrid, and seeing as IPIC was purchased by another company called Mubadala (owned by City owner) the deal was cancelled. So we are taking them to arbitration.

in the meantime, Perez wants the club to finance the deal by itself by taking a loan of 575 millions on 35 years to finance the rebuilding. So he will ask the general assembly to authorize the deal. Keep in mind that our revenues this year were 750 millions, with 30 millions in net profit, and this doesnt account for the amount of cash flow we have in savings. You can run the numbers but i dont see this as burying the club in a mountain of debt.

This is not my area of expertise but i would be curious to see how a club like Spurs built a billion dollar stadium. They took out a 400 mil pounds loan repayable in 5 years. the cost of the stadium has escalated but they still financed it through debt, sponsorship deals, etc...

This is how to deal with such a massive project, you take out a loan. And my sense regarding the length of such a long term loan (i dont even know which company would want to do it) is to make sure we are not cash strapped like Spurs were this summer where they could barely sign players.  

I also understand that the club has undertaken a new direction to push up their global marketing efforts over the past 2 months. They have hired a Canadian called Dave Hopkinson who was the major dealmaker of MLSE a group which owns the Raptors, Toronto Maple Leafs, and Toronto FC. They named him Global Head of Partnerships and his job is, i imagine, to get those massive sponsorship deals. He was credited with spearheading a $800 millions dollars deal between a top 4 bank in Canada (Scotiabank) and the arena where the Raptors and the Toronto Maple leafs play: $800 mil for 20 year.

I have no doubt you will see this type of massive deal announced for the new stadium, if not now, this is bound to happen, we are just too big a name but i have always felt like we were not doing enough to sell our brands worldwide, so hopefully this is a move in that direction.

I would love to hear what someone like Sports think about the types of moves Madrid are making. And i did not even discuss the new 70 millions euros year til 2021-22 with Fly Emirates which is coming, and the new deal we are negotiating with Adidas which will pay us over the 105 mil euros barca are getting with Nike.

edit: Last year, there are also some strong rumours that we signed an unannounced deal with a US equity fund which would land us 200 millions euros in exchange for them to participate in our future sponsorship deal in the next 4 years. there are not a lot of details about this though.

The journal AS has a very anti-Madrid editorship. They criticize absolutely everything this club does, and look to mock rather than to inform. I look at anything they post with a pinch of salt

I'm not being sarcastic, I loved your post.

My only issue with it is that your entire argument is solely based on deals that haven't been struck yet.

I have been hearing about the Adidas 100m deal for over three years now, but nothing official has been made. The same goes for the Emirates deal btw. It was first announced by Palco23, but I'm still failing to chance upon an official statement from the club.

i am very comfortable talking deals that have yet to happen in this context because, if we look at the shape of the club when Perez first came, and during his second term, we have never been healthier financially. the business side of the club i think is being handled extremely well within our means, aka club owned by socios and not club owned by a state like City or PSG who are using every money doping schemes in the books.

I think Perez knows what he is doing money wise. He has been successfully running a billion dollars business for years, and the way a paper like AS tries to belittle everything he does with the club is kind of insulting. I am not even the biggest of his fans, but there are things i dont really worry about when it comes to Perez.

AS has always hated Perez's guts so their constant cheap attacks shouldn't come as a surprise. It also goes without saying that the entire Madrid fanbase are extremely grateful to him for everything he has done for the club, both financially and sportswise.

Listen, in a way, I understand where he's coming from. He's trying to maximize Madrid's revenues to stay at the top, and this is simply not possible without the stadium renovation. I get that.

I just don't think Madrid paying for the project themselves is a good idea. So unless the deals you're speaking of become a reality, we really shouldn't even consider going through with this.

I tend to only believe things when they become official, but I'm really hoping with every fiber of my being that those deals take shape, not just for the stadium but also because I have always believed that our shirt deal with Adidas and sponsorship deal with Fly Emirates are way too modest for a brand like Madrid, especially when you take into account what other clubs are getting (who aren't nearly as popular or successful as Madrid).

I'm confident Perez knows what he's doing economically, i'm sure we will get some kind of sponsor and that we may put some of our own money to start construction but not pay the whole thing.

Even without a sponsor, taking out a loan to revamp the stadium is a viable way to do business. Having debt is not a bad thing, that's how businesses function. take debt, make money, repay the debt

http://www.marca.com/en/football/real-madrid/2018/09/17/5b9ec1f7468aeb55468b45aa.html

Plans will be presented next Sunday

Mr Nick09 wrote:Even without a sponsor, taking out a loan to revamp the stadium is a viable way to do business. Having debt is not a bad thing, that's how businesses function. take debt, make money, repay the debt

Assuming you're not depleting your operating budget to service the debt. If that's the case, you are sacrificing some of the short term for the long term.

Most times, sports teams use naming rights as a way to pay for the interest on debt to build a new stadium.... this way, the operating budget isn't impacted.

The general assembly approved the loan, 1097 votes in favour, 57 against.

someone asked perez to pay it himself since he is a billionaire Perez started laughing wasnt pleased with that question lol

Now that it's approved it's time for banks to fight for the loan: so far Bankia (madrid based bank) vs Caixabank (catalan bank) https://www.elconfidencial.com/deportes/futbol/2018-09-13/real-madrid-bankia-caixabank-credito-florentino_1615070/

Just for the record, I was part of the 1017!

Being reported that we reached a deal with JP Morgan and Merryl Lynch to finance the stadium. Perez preferred foreign investment to avoid picking favorites in Spain.