Real Madrid has strengthened its ties with food, beverage, merchandise, retail and stadium operations giant Legends by agreeing a long-term deal with the US company for the commercial exploitation of the revamped Estadio Santiago Bernabéu, according to VozPópuli.
The Spanish newspaper said Real has agreed a 25-year contract with Legends through which the firm will be entitled to 20% of the profits from a new company managing the Bernabéu, subject to the delivery of certain income targets.
In the short term, Legends will reportedly inject some €150m (£124.9m/$167m), expandable up to between €400m and €440m, into the project subject to Real delivering on stadium-related targets. Legends is said to have outlined that the Bernabéu has the potential to generate around €400m to €440m per year in revenue through the staging of events and other commercial activities at the stadium.
This is a significant increase compared to Real president Florentino Pérez’s projections. Pérez has previously talked of the new Bernabéu’s potential to add a further €150m per year to its current income levels of around €200m.
Legends holds an existing relationship with Real. The club in July 2020 teamed up with Legends to launch a programme that included a new flagship store at the Bernabéu.
The omnichannel retail programme also included the relaunch of three official stores in Madrid and a new official online store. Legends, which has expertise across merchandising, sales, partnerships, planning, technology and hospitality, manages all merchandise operations.
The company has worked with Real since 2018, when it was appointed to provide strategic insight and guidance on optimising commercial opportunities during the redevelopment of the Bernabéu.
Real last month confirmed a second phase of financing for the redevelopment of the Bernabéu, stating the conditions it had secured represented the “best ever obtained” for a long-term arrangement in the sports industry.
The announcement confirmed earlier reports that Real had agreed a deal to raise the necessary funds to complete the redevelopment of the Bernabéu, and at a lower cost than the previous financing package it took out.
Real said it had signed an extension to a financial package taken out in April 2019 which will cover works not initially included in the Bernabéu redevelopment 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%. The loan also includes a grace period for the repayment of the principal, so that Real will not start repaying the loan until July 30, 2024.
The financing was structured by J.P. Morgan and Bank of America, and will be utilised to resolve 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.
It was revealed in May 2020 that Real Madrid’s transformation project for the Bernabéu would include the installation of a retractable pitch, with such a system aiding the staging of events such as concerts.
The redevelopment project is expected to be completed at the beginning of 2023, with the costs having increased beyond the originally intended budget to between €800m and €900m.
Image: Real Madrid