Finance

Renovated Real Madrid stadium is considerably more expensive, but it will come

Real Madrid must take out an additional loan of 255 million euros from investment banks JP Morgan and Bank of America to complete the large-scale renovation, Reuters news agency reported, citing sources within the club.

800 million

That amount comes on top of the original loan of 575 million euros that the club had taken out in 2019 for the renovated Estadio Santiago Bernabéu, which will therefore cost a sloppy 800 million euros. The extra money is needed, among other things, for an ingenious system with which the turf will soon disappear under the stadium.

The renovated Bernabéu will be much more than just a football stadium. Concerts, conferences, tennis tournaments and basketball matches will be possible from the end of 2022. Since March 2019, Real Madrid has been building its new home base, which will accommodate around 85,000 people during football matches. The project should increase the stadium revenue of the Spanish club from 150 million euros to 400 million euros per year.

New Feyenoord stadium

It is visitor numbers and income that they dream of in Rotterdam. There, the intended construction of a new football stadium for Feyenoord on the Maas foundered last week. This after it turned out that the construction costs at construction company BAM turned out to be around 180 million euros higher than budgeted. The new stadium, part of the Feyenoord City urban development project, was to have 63,000 seats.

The difference with a European top club such as Real Madrid and Feyenoord is simple: the Rotterdam club cannot borrow, let alone pay for the higher construction cost of the new stadium. “The project has not yet been officially shot down by the Rotterdam city council, but it is as dead as a door,” says sports marketer Chris Woerts.

He thinks that is the best thing that could have happened to the club. “Feyenoord does not have the money and, moreover, has no guarantee that such a new stadium will contribute to the original goal: a higher player budget. The new stadium would increase that budget from 10 to 27.5 million euros, but that was further weakened. Until they said at the last meeting: as long as the players’ budget doesn’t get any less.”

Scarlet numbers

It also seems like a bad time for such a large investment. Feyenoord wrote deep red figures in 2020 with a loss of 17 million euros, caused by lack of transfers and empty stadiums. Compare that to Real Madrid, which, despite a substantial loss of around 300 million euros, was just able to write black numbers. Partly thanks to players who agreed to a salary cut of 10 percent, 874,000 euros remained below the line in Madrid.

Woerts is in favor of renovation of the current Feyenoord stadium, which is popularly known as the Kuip. “That is the only remaining option. A renovation plan of 200 million euros was ready in 2015, but that did not go through. If they had opted for that at the time, the renovated stadium would already have been ready.”

It is impossible to estimate what a possible renovation of the Kuip would cost, according to the sports marketer. “No company is going to guarantee you a price because of the lower construction margins now that raw materials and transport costs have risen. Everything has become more expensive, and will remain so for a while.”

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