DBRS Morningstar issued a report on the club’s solvency on the ground of a control chain akin to German model 50+1
Florentino Pérez, the head of Madrid-listed contractor ACS, will act as the chairman of Spanish iconic sports club Real Madrid until 2029 (see here the press release).
In late 2024, Pérez said he was willing to change the club’s shareholding structure. Spanish sport clubs FC Barcelona, Athletic Club, Club Atlético Osasuna, and Real Madrid belong to members and not to institutional investors.
“Real Madrid must have an organisational structure that protects its institution and members. We will do everything necessary to ensure that this club continues to belong to them, as it has done during our 122-year history, so that no one can take away our economic heritage. Therefore, I confirm that at the next members meeting we will submit a proposal for the reorganisation of the club’s corporate structure that will clearly guarantee our future, protect us from the threats we are experiencing and, above all, ensure that we will preserve the rights of the true owners of our club and its financial assets (see here the press relase)”, Pérez pointed out.
A recent report of DBRS Morningstar (available here) assumes that the new board of Real Madrid may implement a structure akin to 50+1 German model and convert the club into a corporation while remaining under the control of the members.
In 1998, Deutsche Fußball Liga (DFL – the German Football League) allowed traditionally non-profit clubs to convert into for-profit companies, allowing investors to rejoin the shareholding structure while members held 50 per cent plus one of the voting rights. This system helped clubs to attract investors resources while granting fans-members with relevant governance rights. Bayern Munich, the most successful club in the German Bundesliga, attracted the investments of large companies such as Adidas, Allianz and Audi (8.3%), while the shareholders own 75 per cent of the club. In 2023, Bayern Munich fans expressed dissent over the controversial sponsorship agreement with Qatar Airways. Their protests led to the non-renewal of the partnership and the club set up a Fan Services Department to simplify relations and satisfy members.
DBRS Morningstar report says that the 50+1 model would preserve the governance rights of del Real Madrid. The impact on the club’s future revenue growth, financial sustainability and credit profile could be positive, the rating agency said. Furthermore, Real Madrid’s financials are already very good. “This year [2024] we have reached an unprecedented milestone. Real Madrid has become the first football club to exceed one billion euros in revenues. We reached exactly 1,073 million euros in revenues, which is a significant increase of 27 per cent year on year. The financial results for the 2023-2024 season underline our position as one of the strongest and most successful clubs in the world of sport.”, Pérez said in November2024.
Forbes previously reported that Real Madrid’s enterprise value amounts to 6.1 billion (5 billion of equity value). If the club decided to sell a 25% stake, as Bayern Munich did, it could fetch 1.7 billion in increased capital. Such proceeds could support the club’s growth or repaying outstanding 1.2 billion liabilities and improve its net cash. Real Madrid raised debt facilities for financing the Santiago Bernabeu stadium renovation project. Both options would strengthen the club’s credit profile, said DBRS Morningstar.
