Real Madrid Seeks €370 Million Loan for Santiago Bernabeu Renovation
Real Madrid’s board of directors is planning to ask club members to approve a new €370 million loan to cover additional expenses in the ongoing renovation of the Santiago Bernabeu stadium. The total cost of the redevelopment project is now expected to reach at least €1.4 billion. The board has outlined its plans in a document sent to members ahead of a general assembly scheduled for November 11.
The need for additional funds arises from “price revisions,” “unforeseen works,” and the inclusion of “improvements and complementary facilities” in the stadium redevelopment project. This will be the third loan sought by Real Madrid’s leadership, and it is highly likely to be approved by a majority of club members. In a previous loan request for Bernabeu works in 2021, there were 1,582 votes in favor, 16 votes against, and 37 abstentions. The second loan, amounting to €225 million, was used to finance the construction of a new retractable pitch system, which was not initially part of the original redesign. The first loan of €575 million was obtained in 2019.
While the interest rates for the first two loans were considered favorable by industry experts (2.5% and 1.53%, respectively), it is expected that the interest rate for this new loan will be higher. Despite these additional costs, Madrid sources claim that the borrowing will not burden the club’s finances. In their latest official accounts for the 2022-23 season, the club states that a “growth in net cash flows” related to the stadium renovation will enable them to amortize the investment and continue to grow and compete in an increasingly challenging international football landscape.
The renovated Santiago Bernabeu will feature an increase in capacity by approximately 4,000 seats, bringing the total capacity to around 85,000. The VIP area will also be expanded, and Real Madrid plans to utilize the new stadium as a venue for non-football events, such as hosting concerts. For example, they have already secured a leg of Taylor Swift’s The Eras Tour in May next year, which is expected to generate additional income for the club.
The construction works began in 2019, and according to Madrid’s latest accounts, the “essential part” of the project is expected to be completed by the end of 2023. However, the total cost has now increased to €1.4 billion. Despite the cost overruns resulting from the second and third loans, Real Madrid remains confident that the redevelopment investment will be financially sustainable in the long run.
The Santiago Bernabeu renovation project aims to modernize and enhance the iconic stadium, providing an improved experience for fans and generating additional revenue streams for the club. With its increased capacity and expanded facilities, the new Bernabeu is set to become a world-class venue for football matches and other events.
In conclusion, Real Madrid’s board of directors is seeking a €370 million loan to cover further expenses in the ongoing renovation of the Santiago Bernabeu stadium. The club members are expected to approve this loan request, as they have done in the past. Despite the increased costs, Real Madrid remains confident in its ability to manage the financial implications and continue to grow and compete in the international football arena. The renovated Santiago Bernabeu will not only provide an enhanced experience for fans but also serve as a multi-purpose venue for non-football events, contributing to the club’s revenue diversification strategy.