Spanish football club Real Madrid will increase the size of its structured finance deal with JP Morgan and Bank of America by 225 million euros ($255 million) to complete the renovation of its emblematic Santiago Bernabeu stadium, sources familiar with the talks said.
The initial deal agreed in 2019 was worth 575 million euros and allowed the club to start transforming the stadium from a purely soccer venue into a 365-day-a-year event center and attraction.
The club later decided to expand the renovation, adding a state-of-the-art retractable hybrid pitch so that the central venue can be used for more purposes, generating additional revenue.
The project is expected to boost the club's revenues from the Bernabeu operation alone to 400 million euros a year from 150 million euros now, according to a club source.
In a meeting with a group of club members on Wednesday, Real Madrid President Florentino Perez said the cost of the new loan could be below 2%, a cheaper interest rate than in the initial operation, a source present at the meeting told Reuters.
Real Madrid has increased its revenues by seven times in the last decade, and they were nearly 800 million euros in 2019. The club closed 2020 wit ha surplus despite the COVID-19 pandemic.
The club's assembly is due to vote on the new deal on Saturday, one of the sources said. A second source said Real Madrid, which has created a wholly owned subsidiary to operate the renovated venue in a "professional" manner, would announce the deal on Sunday.
JP Morgan and Bofa declined to comment. The club did not respond to various requests for comment.
