Let's travel back to the summer of 2021. Your favorite club had just lifted the La Liga trophy, yet suddenly found itself in a financial crisis. The stadium stood empty, and the heavy debt from the 2018 relocation to the dreamlike Metropolitano Stadium weighed heavily on the club. These two mountains of pressure resulted in an annual loss of nearly 90 million euros, with the risk of asset-liability imbalance looming large. This was the predicament Atlético Madrid faced in the summer of 2021.
Faced with this storm, Atlético turned to the Gil family's traditional ace: issuing new shares. To improve the team's financial situation and maintain competitiveness, the club proposed at the shareholders' meeting to raise 180 million euros through a share issue (972,082 new ordinary shares, equivalent to about 22.7% of the club's pre-increase shares, with a face value of 8.5 euros and a premium of 178.6 euros per share). This would be the largest capital increase in the club's history.
At that time, Quantum Pacific, controlled by Israeli billionaire Idan Ofer, had increased its stake to 32% after acquiring Wanda's 17% share in 2018. Of the remaining shares, CEO Enrique Cerezo held 51%, President Miguel Ángel Gil Marín held 15%, and the remaining 2% was scattered among 7,000 small shareholders, much like the red and white ocean in the stadium.
During the capital increase, existing club shareholders had priority subscription rights. However, Idan Ofer did not subscribe to the new club shares in proportion to his holdings, reducing his participation in the club from 32% to the current 27.8%. Considering he had actively acquired Wanda's shares in 2018, the cruise tycoon's refusal to subscribe was somewhat surprising.
To achieve the capital increase target, Cerezo and Gil had to find another way, and thus Atlético HoldCo was born.
For Cerezo and Gil, establishing Atlético HoldCo was a masterstroke. Through this holding company as an investment tool, they consolidated their original 66% club shares, making Atlético HoldCo the largest controlling shareholder of the club. By then holding a majority stake in Atlético HoldCo, they gained more solid and broader control rights with less capital, further strengthening their control over the team.
This typical equity control chain is like Russian nesting dolls: Atlético HoldCo controls Atlético Madrid, while Cerezo and Gil control Atlético HoldCo. Many clubs with multiple shareholders adopt similar ownership structures.
Moreover, separating the club from the holding company allows the latter to focus on capital operations, introducing capital more flexibly and adjusting investment strategies according to the market. This includes making significant investments in other industries, projects, and infrastructure (such as Atlético's sports city) without worrying about affecting the club's core business. Meanwhile, the club can focus on football operations, improving operational efficiency while isolating financial and legal risks.
Consequently, Atlético HoldCo successfully attracted professional investors like Ares Management. They may not necessarily care about Atlético Madrid's sporting performance as a team, but they see potential in the long-term investment returns of Atlético HoldCo, as well as Atlético Madrid's brand value and scarcity. This is also the reason behind the high premium of Atlético's new shares.
Finally, in September 2021, Ares Management, through Atlético HoldCo, subscribed to 642,849 new Atlético Madrid shares, equivalent to 15.3% of the club's pre-increase shares, with a face value of 8.5 euros and a premium of 178.6 euros per share. This gave them a 33.96% stake in Atlético HoldCo. As a result, Atlético Madrid received a capital injection of about 120 million euros, allowing them to weather the post-pandemic crisis while also securing the budget to sign De Paul, laying a foundation (albeit not entirely solid) for the team's future development.
Unlike Quantum Pacific, which has a seat on the club's board, Ares Management only has a board seat in Atlético HoldCo and does not directly participate in club decisions. However, as a significant minority shareholder, Ares Management may have certain advisory or veto rights in financial and strategic investment matters, depending on the terms of the shareholder agreement.
Understanding the ownership structure changes that occurred in 2021 makes it easier to comprehend the source of Atlético's funds for the 2024 summer transfer window. This summer, Atlético once again embarked on a fundraising journey. This time, the club raised about 70 million euros by issuing new shares, using the same valuation ratio as in 2021: a face value of 8.5 euros and a share premium of 178.6 euros. Both Atlético HoldCo and Quantum Pacific subscribed to the new shares according to their respective shareholding ratios, with Atlético HoldCo subscribing 49.83 million euros and Quantum Pacific 19.69 million euros.
Through this capital increase, Atlético Madrid was able to rejuvenate its aging squad in the 2024 summer transfer window. This is a typical behind-the-scenes story of modern football: the intertwining of money, power, and passion. Football is no longer just about on-field competition; every change in shareholding structure and every capital injection relates to the team's future fate, influencing player transfers, club development, and the right to cheer (or breathe) every weekend.
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