Florentino Pérez has plans for Real Madrid. According to the New York Times, the football club’s President wishes to open up the ownership – from the founding (1902) in the hands of socios (club members) – to outside investors.
Although no other club generates annual revenues in excess of $1 billion, Pérez feels that the old-time ownership structure hinders Real Madrid’s potential in a world where others enjoy backing from sovereign wealth funds and rich private investors.
Just how old-time is it?
Any new socio must be either the child or the grandchild of another socio. As far as we can determine, about 2 percent of the hundred thousand or so socios are, on election every four years, elevated to the status of socios compromisarios (delegates). These are granted entry to the annual meetings and a vote.
In 2012 the club amended it statutes to require every candidate for the Presidency to have at least 20 years’ standing as a socio and to provide a bank guarantee for 15 percent of the annual budget. For 2024-25 that guarantee, as the Times calculates, would have been worth €165 to €170 million.
Socios, by the way, are distinct from madridistas, as members of the triple-tiered fan club are called.
Potential proposals
At last year’s annual general assembly Pérez floated the idea of a referendum on changes to ownership, and now, according to the Times’ anonymous sources, he will be presenting a plan at the next general assembly, probably by the end of November.
One possibility, apparently, is to split the club in two, with the socios retaining ownership of the football concern and outside investors purchasing shares in the rest. Another is to adopt the 50+1 model of Germany’s Bundesliga, where, again, the current owners would retain control.
Four of the 20 teams in LaLiga – Real Madrid, FC Barcelona, Athletic Bilbao and Osasuna – are owned by members. The rest vary in ownership – private investors, corporate investors, families – and in this respect resemble the teams of such comparable leagues as the English Premier League, Bundesliga and Italy’s Serie A.
These four exceptions were in fact dispensed from abiding by a Spanish law enacted in 1990 (10/1990, of Oct. 15), which established a new corporate structure – the sports corporation, or Sociedad Anónima Deportiva (SAD) – and required sports clubs to adopt it.
Extant outside investment
Real Madrid has already drawn on outsiders but yet not in exchange for equity. One occasion was the rebuilding its stadium, Bernabeu, which cost €1.8 billion. An American investment firm, Sixth Street (San Francisco), stepped up with €360 million for the purpose in May 2022.
Sixth Street, incidentally, figures on the NFL’s list of approved firms for private-equity investment and is at present seeking a 3 percent stake in the New England Patriots.
Back in 2017 the club established a media partnership with Providence Equity Partners (Providence, Rhode Island). In exchange for €200 million up front, according to various reports, Real Madrid ceded for the next decade its online media rights, worth an estimated €500 million.
Providence is an investor also in Topgolf Callaway and Learfield Sports (management of multimedia rights) and owns VivaGym. It sold Ironman to China’s Wanda Group in 2015.
