Atlético’s new owner also finances Real Madrid

With a capital of 78 billion and an annual income of 26,000, Apollo has tentacles in dozens of sectors and plays in the big leagues of global investment funds. Spain already has banking, real estate, hotel and logistics businesses, and more recently many of its activities have started to be related to sports. In April, it announced the acquisition of the Mutua Madrid Open tennis tournament along with the Miami Masters 1,000. Additionally, in 2023, together with MetLife, Northwestern Mutual, Aegon and Macquarie, it financed part of a 225 million loan to Real Madrid for the rebuilding of the Santiago Bernabéu. Paradoxically, Atlético’s new majority partner is one of the main creditors of its arch-rival.

They are by no means new players, but it is also true that they have never tried to become club owners, at least not directly. Carlos González, partner and CEO of BHI Capital, a sports investment advisory firm, told the newspaper: “Historically, they have been more of a lender and a granter of structured credit and loans than an equity holder.” “A few years ago, they tried to take control of parts of the Mexican League, in the style that CVC has done with La Liga. And now they have fully entered a big club like Atlético Madrid, which I believe also shows the before and after of capital entering Spanish clubs. This is a step forward that will not only transform Atlético, but also change the internal vision of the Spanish league.”

Apollo’s parent company was born in a New York skyscraper in 1990, grew through acquisitions and restructuring, and now manages more than 700 billion euros worldwide. Its offices are spread across various locations including London, Frankfurt, Singapore and Bombay. The founders were three American partners: Leon Black, Mark Rowan and Josh Harris. They remain at the top of the company, even though the majority of their shares already belong to other investment giants such as Vanguard (8.2%), BlackRock (5.9%) and Capital World (5.1%).

The company’s subsidiary, Apollo Sports Capital, was formed just two months ago to centralize the $17 billion already invested in assets related to the world of sports. Apart from taking over the tennis tournament, his most notable venture was at Nottingham Forest, where he gave them an £80 million loan to rebuild the organization. Al Tairis, the fund’s CEO and one of its three managers, is also a co-owner of Mexico’s Necaxa, along with several Hollywood stars. Tyris will share responsibility at Atletico with Lee Solomon and Rob Givone. Rob Givone is pictured in Madrid with Miguel Ángel Gil and Enrique Cerezo.

The latter appears to be the one who has been called upon to occupy a preferred seat on the board and henceforth authenticate Atlético’s account with his signature. This is despite the fact that both the current CEO and president will retain their positions after landing. It’s not such a strange decision. “This is a wise decision,” admits Pablo Burillo, a professor at the University of Europe. “Hill Marine and Cerezo are people who know the vision for the project. Their persistence ensures the continuity of ongoing projects. When making investments, it is important to have a vision and ensure continuity. “It makes more sense to retain the people who have achieved growth and success in recent years.”

“It’s very rare for a fund of this size to come in and generate a full return,” González corroborates. “Normally they are not disruptive. It makes no sense because in the end it will create an imbalance in the club. What they usually do is gradually strengthen the internal structure of the club with specialists who are familiar with the international market and allow them to open up new areas of business.

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The strategy stems from Atlético’s need to find funding for the development of the Ciudad del Deporte urban project on land adjacent to the Metropolitan Stadium. The new Red and White Sports City will be located on these 115 hectares and will feature a mini-stadium and high-performance center with a capacity of 5,000 spectators, several municipal sports areas and stadiums, as well as a university campus. But its biggest attraction will be the leisure area with a concert pavilion, a four-star hotel, a wave beach for surfing, a golf practice court, climbing…an undertaking that Atlético, with a total investment of around 800 million and exactly 200 million from the CVC, could not undertake alone. Apollo was one of the first doors he knocked on, and it was there that the Americans saw a window of opportunity in the project that was bigger than simple financing.

“It is clear that Sports City is the key. “This is a large, powerful and far-reaching project,” continues Gonzalez. “It’s not easy to make money just by investing in television rights or selling players. You need other vertical businesses, and that’s where the development of the Metropolitano environment all comes into play. The business model is completely different and much more diversified. There are also risks. There are no similar cases in Europe that are trying to achieve this kind of and that level of income. It’s a very American profile. “Try to reverse the curve and become less dependent on television rights.”

So it is clear that a fund of this size is not only involved in the success of the sport, but of course plays an important role in the equation. “They will definitely look to create value through better facilities, but so will success in sports and media personnel,” Burillo says.

There’s a lot of uncertainty hanging over the heads of mattress fans these days. Mattress fans have been accustomed to the now unstable “status quo” for the past 30 years. The Americans arrive, but no one knows what to make of them. There are questions about the time period the new owners have in mind. And whether the club will lose the identity it has built over more than a century. “Other funds have an exit period. Not here. It’s one of those so-called patient investment funds. It’s a long-term bet because there’s infrastructure involved and it takes time for returns to come in,” says Brillo, who disagrees with the widespread idea that Apollo will exit in five to seven years.

And when it comes to identity, González is also calm in his opinion: “Apollo can make Atlético climb the necessary steps to continue to fight for the Champions League.”The club now has its own identity, history and values. They have to take great care of it in order for it to remain more than just an asset, but an asset to the fans. “Let’s not let our fans notice the change.”

The answers to all these questions will begin to be resolved in the first months of next year. If the deal reached this week comes to fruition with the capital increase, Atlético’s value will increase to €2.5 billion, but according to Forbes magazine, Atlético is still outside the top of Europe’s ‘top 10’ list, ahead of Real Madrid (5.9 billion), followed by Manchester United (5700) and Barcelona (4900). These numbers are the goals Apollo would like to reach before considering an “exit.” It will double or triple your investment.

The only thing that is certain is that the step Atlético has taken is irreversible. The red and white club is destined to trade bait among other investment funds, Asian moguls and Arab sheikhs. “This is a wheel with very few actors able to take on that level of investment,” Gonzalez concludes. “But at the same time, they’re becoming increasingly specialized, specialized actors. “The real estate that’s coming up in the future is going to be ready for that as well.”