Real Madrid Will Struggle With Stadium Plan, Ex-President Says

Real Madrid, the world’s richest soccer club by sales, will struggle to redevelop its stadium because of Spain’s faltering economy, ex-president Ramon Calderon said.

Real President Florentino Perez, chairman of Spanish builder Actividades de Construccion y Servicios SA, wants to add a hotel and shopping center to the Santiago Bernabeu stadium. Calderon, his predecessor, says investors are resisting the effort because of the country’s six-year economic slump.

“Real Madrid’s plan is paralyzed because nobody wants to invest in Spain,” Calderon said by telephone. The 4,000 luxury seats at the stadium are only half full this season, he said. “It doesn’t make sense to invest now.”

In September, Perez announced a shortlist of four architect firms including Norman Foster’s Foster + Partners to remodel the facade. Those companies have been asked to complete a viability study by mid-June, while the team makes its own calculations. Barcelona, the second-richest team by sales, canceled a redesign of its Camp Nou stadium in 2010 to reduce spending.

Real, led by former World Player of the Year Cristiano Ronaldo, will try to overcome a 4-1 deficit to Borussia Dortmund in tonight’s Champions League semifinal in the Bernabeu.

Perez used the 584 million-euro ($764 million) sale of Real Madrid’s training ground in 2001 to pay team debts and bankroll so-called “galactico” signings such as midfielders Zinedine Zidane and David Beckham. The additions helped boost ad revenue that pushed the club past Manchester United as the biggest team by sales in 2005 in Deloitte AG’s annual rich list.

Earlier Fundraising

Perez got permission in 2011 from the city to use public land where the arena faces Madrid’s main avenue, Paseo de la Castellana. European Union regulators are looking into allegations that the record nine-time European champion Real benefited from state aid under the deal, Antoine Colombani, a spokesman for the European Commission, said April 3.

An “outdated” shopping center at the back of the site has survived for years on passing business from the stadium, according to Luis Espadas, head of Capital Markets at Savills in Spain. Reyal Urbis SA (REY), a developer which sought bankruptcy protection in February, paid Real Madrid 1 million euros to lease the complex for the year through June 2011, according to a team statement. In 2011, Reyal Urbis extended the lease through July 2015.

Real Madrid can bring in sales from outside Spain to boost revenue and finance player signings, said Eugenio Martinez, a former HSBC Holdings Plc banker who sought to stand against Perez in 2009. Emirates airline said April 14 it’s in talks about a shirt sponsorship deal with Real worth about 30 million euros.

Look Outside

“The business isn’t in Spain, it’s outside” for Real Madrid, Martinez said in an e-mail. “The future is in Asia, Africa and Latin America.”

Real Madrid’s net income fell 23 percent to 24.2 million euros in the year through June 2012, according to an earnings statement on the team website. Sales increased sales 7 percent to 514 million euros.

Last December, the El Confidencial website reported that Real Madrid planned to issue 250 million euros of high-yield bonds backed to finance the redesign. Perez wasn’t made available to comment on the stadium plan.

Delayed

Viktoria Ruepke, a spokeswoman for Germany’s GMP Von Gerkan Marg & Partner, one of the other shortlisted architects, said by phone the announcement of the winning bid had been delayed, without giving a reason. A Foster + Partners official in Madrid declined to comment.

Spanish retail sales fell 10.9 percent in March, compared with a year earlier, the National Statistics Institute said yesterday. Even amid a slump, shopping center operators would be interested in running a complex at Real’s stadium, Espadas said. Perez may be able to carry through the plans because of his experience and the team’s cachet, he added.

“If someone can push it through, it’s him,” Espadas said. “There are a lot of shopping centers outside Madrid but not many with a prime location like this.”

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net

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