Are Atlético over valued?

One branch of my family now lives in Spain, but unfortunately none of them are interested in football.   That would be a lot to ask of my great-granddaughter who is three, but I have watched the older pupils from her school (boys and girls) enjoying a kick about in the village square.

From his Zurich fastness, the Swiss Ramble has been casting his eye over the finances of Atlético Madrid.   Much more detail and analysis are available on his Substack page.   Some highlights follow.

Private equity firm Apollo Sports Capital became majority shareholder in Atlético Madrid last November, buying a reported 55% stake. Following this deal, Quantum Pacific, founded by Israeli billionaire Idan Ofer, is the second largest shareholder with a stake of roughly 25%, while American investment firm Ares Management now has 5%.

Gil Marin has seen his stake reduce to 10%, though he will remain as CEO, while club president Enrique Cerezo is down to 3%. Apollo’s investment valued the La Liga club at around €2.5 bln, which is equivalent to an eyebrow-raising 6x revenue multiple, based on current figures.

That might seem pretty steep, though the investment thesis has surely been driven by the major developments taking place in Madrid. The club has already moved to a splendid new stadium, but the jewel in their crown is the Sports City project, which will transform the club’s finances.

Breaking the duopoly

Atlético are the only club that has managed to break up the duopoly of Real Madrid and Barcelona in this period, which is pretty impressive, given the enormous financial advantages enjoyed by Spain’s Big two.   In fact, they have finished in the top three in La Liga in 12 out of the last 13 seasons, thus ensuring qualification for the lucrative Champions League. They have twice been runners-up in Europe’s most important club tournament, while reaching the semi-finals on two other occasions.

Atlético’s revenue broke through the €400m barrier for the first time in 2024/25, rising €21m (5%) from €395m to €416m, while profit on player sales was also up €21m from €27m to €48m and other operating income increased €6m (24%) from €25m to €31m.

However, the impressive revenue growth was more than offset by higher operating expenses, up €30m (7%) from €444m to €474m, and net interest payable, up €3m (29%) from €21m to €24m.   In addition, exceptional items swung from an €18m credit to a €4m charge.  As a result, they made a small €6m loss before tax, compared to a €1m profit the previous season.

Revenue growth driven by commercial

Atlético’s revenue growth was almost entirely driven by commercial, which shot up €19m (19%) from €97m to €116m. The other revenue streams were also up, but only slightly higher, as broadcasting rose €1m to €223m, while match day increased €1m to €77m.   For many years, Atlético’s revenue had hardly grown, but they now seem to be on an upward path. Indeed, they are budgeting for a further increase this season, looking to get close to €500m.

Despite the growth, Atlético are stuck in a slightly awkward “inbetweener” position in Spain, as their €416m revenue is miles below the two Spanish giants, Real Madrid €1.2 bln and Barcelona €916m, but is at least €250m more than the rest of the league.  If we compare Atlético with Real Madrid, they earn a lot less in all three revenue streams, though the major differentiator is in commercial, where their €156m is only around a quarter of their rivals’ €594m.

In fact, the €707m gap between Real Madrid and Atlético is the highest difference between the first and third ranked clubs in any country, even more than the €648m in France and €564m in Germany. The gaps in Italy (€136m) and especially England (€14m) are considerably smaller.

Atlético have earned an impressive €404m from European competition in the last five years, which is only €38m less than Barcelona €442m, but nearly €200m behind Real Madrid €603m.

Sports City

The development in the area around the stadium will include improved facilities for the team (a 6,000 capacity mini stadium, state-of-the art training centre and a residence for players).

Significant revenue growth will be generated by a new concert venue, a hotel, gym, restaurants, shops, a metropolitan park and even a water park. In addition, Mahou-San Miguel have already been signed as the first Sports City sponsor.

The cost is estimated at €350m, but the club expects revenue to increase by more than €200m by 2033, though the improvement in profit would be a fair bit smaller, due to a rise in associated costs.  There will be strong competition in Madrid after the opening of the refurbished Bernabeu, but Atlético’s project is clearly an important factor in Apollo’s investment, 

Atlético’s wage bill rose €12m (5%) from €268m to €280m, a new high for the club. This has risen €35m (14%) since 2022/23, having broken out of the fairly narrow range over the previous five years.

Atlético’s gross financial debt increased from €429m to €487m, so this has more than doubled from €218m five years ago. Indeed, it was only €70m as recently as 2015. The club said that the growth was related to funds required for the construction of the Metropolitano stadium, as well as investment in the squad.

This included a refinancing of €300m in 2020/21 to be repaid in 10 years at a low fixed interest rate of 2.75%, followed by extensions in January 2022 (€50m at 2.75%), October 2023 (€75m at 4.99%) and January 2025 (€70m at 4.5%). The outstanding balance at 30 June 2025 was €424m, up €71m over the prior year.

The Swiss Ramble asks: ‘So does the premium valuation placed on Atlético by Apollo make any sense?

Well, on the pitch, they have competed well with Real Madrid and Barcelona over the years, despite being miles behind the Big Two financially, though by the same token they do enjoy considerable financial advantages over every other club in La Liga.

Their record is also pretty good in Europe, where they have regularly done well in the Champions League, especially this season, where they are one of only four clubs still in with a chance of winning it.  A lack of investment in the squad hurt them, which helps explain the significant spend in the last two seasons, which has rejuvenated an ageing squad.

Financially, they have essentially broken-even in the last three seasons, which is good going for a football club, while there has been some decent, though not spectacular, revenue growth.

However, the potential game changer for Atlético Madrid is the Sports City development, which could take them to the proverbial next level.   There is an increasing trend at leading football clubs to invest in such projects, as they can generate significantly more income, though they can also be something of a double-edged sword, as there is a risk of the leadership’s focus switching to commercial operations. Tottenham fans certainly feel that this is the case with their board, given the number of events held at the new stadium.’