Real Madrid Scraps $1 Billion U.A.E. Soccer Resort PlanAlex Duff and Zainab Fattah
Real Madrid canceled a planned soccer-themed resort in the United Arab Emirate of Ras Al Khaimah after the project’s organizer defaulted on payments, the club said.
The licensing accord with RAK Marjan Island Football, the Luxembourg-based organizer of the project, was scrapped after it defaulted on payments and “didn’t provide guarantees,” Real said in its financial report distributed in Madrid today.
Louis-Armand de Rouge, chief executive officer of RAK Marjan Island Football, didn’t return calls made by Bloomberg News.
The world’s richest soccer club said last year it was lending its name to a resort that includes a 10,000-seat stadium, a marina, homes, a shopping mall, a football training academy and a 450-room five-star hotel. The development was set to be completed by 2015 on the 40-hectare (99-acre) artificial Marjan Island. The resort was announced in a highly-publicized ceremony attended by Ras Al Khaimah ruler Sheikh Saud bin Saqr Al Qassimi and French soccer star Zinedine Zidane.
RAK Marjan Island Football assumed all the financial risks of the project, Real Madrid said in its report. The soccer club, which agreed to a 22-year license, said it will search for alternative projects in the U.A.E., without giving more details.
Real Madrid posted a net income of 36.9 million euros ($50 million) for the year through June 2013. That’s 52 percent more than the year earlier period after prize money from competitions and exhibition games climbed, according to the annual report. Sales rose to 520.9 million euros, a 1.3 percent increase.