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AEG, Billionaire Batista to Manage Rio’s Maracana Stadium

Maracana Stadium is seen in an aerial photograph taken in Rio de Janeiro on April 24, 2013. Photographer: Dado Galdieri/Bloomberg
Maracana Stadium is seen in an aerial photograph taken in Rio de Janeiro on April 24, 2013. Photographer: Dado Galdieri/Bloomberg

May 10 (Bloomberg) -- Anschutz Entertainment Group Inc., the operator of the Staples Center in Los Angeles and London’s O2 arena, teamed up with billionaire Eike Batista and Brazil’s largest construction company to run Rio de Janeiro’s Maracana stadium for 35 years.

Brazilian media, including Globo, reported today that a Brazilian judge had suspended the agreement pending an investigation into alleged irregularities during the bidding process. The official announcement of the deal was made yesterday.

The arena, which last month held its first test event after being shuttered for a three-year, $500 million renovation, will host next year’s soccer World Cup final and the opening and closing ceremonies of the 2016 Summer Olympics.

The group, known as Consorcio Maracana SA, is led by Odebrecht SA, Brazil’s biggest construction firm, and includes Batista’s sports and entertainment vehicle IMX along with Los Angeles-based AEG, whose holdings include Major League Soccer’s Galaxy and the Staples Center, home of the National Basketball Association’s Lakers.

‘Entertainment Hub’

“The consortium is committed to promoting an international management and ensure the modernization of the complex to consolidate it as the entertainment hub of Rio de Janeiro and Brazil,” Consorcio Maracana said yesterday in an e-mailed statement.

The agreement needs to be ratified by Rio’s state government. Judge Gisela Guida said the concession contract could only be signed after Brazil’s public prosecutors’ office probes the tender process, Globo said.

Prosecutors allege Consorcio Maracana was given an advantage because IMX had been chosen to provide a feasibility study into the stadium’s use, the newspaper added. An after-hours call to the Rio state government, which is responsible for the stadium, went unanswered.

If the deal goes ahead the group would pay 5.5 million reais ($2.7 million) annually for the concession, or 192.5 million reais in total. Odebrecht holds a 90 percent stake in the venture, with IMX and AEG controlling 5 percent each. Consorcio Maracana said it planned to invest 594 million reais on the complex.

Privatization Protests

The Maracana’s reconstruction has been criticized for cost overruns, delays and the Rio state government’s plans to put the stadium in the hands of private operators.

Protestors criticized the privatization at the April 27 re-opening, at which a reduced capacity of around 30,000 invited guests, including construction workers and Brazil’s president Dilma Roussef, watched a soccer exhibition game.

The stadium, which now seats 78,000, was designed for the 1950 World Cup, the only occasion record five-time world champion Brazil hosted the most-watched sports event.

The Maracana is part of the country’s sporting lore after the host nation lost the World Cup final to Uruguay in front of 173,850 fans. The game, for which organizers had made winners’ medals for the Brazilian team in advance, is still described as a national tragedy.

Because the re-opening was delayed by four months to rebuild the roof, a June 2 exhibition game between Brazil and England will be the only fixture with a capacity crowd played at the Maracana before next month’s Confederations Cup, a warm-up event for the World Cup.

London Bid

AEG, whose owner Phil Anschutz stopped seeking a buyer for the unit in March, last year failed in a bid with English Premier League soccer team Tottenham to run London’s 2012 Olympic stadium.

AEG has contracts to manage three other venues in Brazil -- Arena da Baixada in Curitiba state; Sao Paulo’s Nova Arena, which is scheduled to open in November; and the Arena Pernambuco in Recife state.

Billionaire Batista in 2011 founded Rio-based IMX, a joint venture with IMG Worldwide Inc., to expand into sports and arena management in Brazil. The company manages a portfolio that includes the Ultimate Fighting Championship and sailing’s Volvo Ocean Race. It also has ventures with Cirque du Soleil and Rock World SA, which organizes the Rock in Rio music festivals.

To contact the reporters on this story: Tariq Panja in London at tpanja@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

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

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