Today Valencia CF were supposed to sign the sale of Estadio Mestalla. The transaction would fuel construction work on Nou Mestalla. That is now delayed and the city is getting impatient.

March 31 was supposed to be a major date in the history of Valencia CF. The club was supposed to seal the sale of Mestalla today to ADU Mediterráneo, based on agreement reached in May of 2019. However, ADU has failed to secure financial guarantees for the €113 million transaction.

Already on Sunday the football club has warned its supporters that the deal is not goin to happen, at least not now. Days earlier, ADU has informed the club that the ongoing pandemic has impeded its efforts to provide financial guarantees.

Because the deadline for signatures has passed today, ADU no longer has exclusive rights to buy the land with Estadio Mestalla. Valencia CF therefore have freedom of negotiating with other entities once more. Back in 2018 and 2019 there were reportedly well over 20 investors interested, though with unstable situation at the moment it's unclear how many would extend their interest today.

The deadline's lapse does not mean ADU is no longer interested in the transaction. Quite the opposite, the company is working with an American fund to refine its financial vehicle. As an example, one of the planned residential towers that would replace Mestalla would be dedicated to rental only, which delivers better returns.

Not being able to sign the contract today is not a disaster for any of the two parties, but it does signal that at least weeks (if not months) of delay should be expected. There seem to be three major ways forward. First, finalisation of the ADU contract on new terms. Second, finding a new investor and finalising negotiation with that entity. Third, intervention of club owner Peter Lim, who would recapitalise the club with similar amount.

It seems a lot may depend on the scale of economic turbulences incurred due to the COVID-19 pandemic. Keep in mind, the sale of Mestalla was supposed to help finance the new stadium back in 2008, but then the markets collapsed, particularly Spanish real estate. It wasn't until a decade later that the transaction once more became a valid option. If markets collapse this time as well, the safest way may be to leave Mestalla unsold once more, waiting for the market to rise again. This would favour the third option, though at this point it's only speculation on our part.

While the club could theoretically wait with the sale of Mestalla, it might not be able to postpone delivery of Nou Mestalla, already abandoned for over a decade. The city hall has a binding agreement with Valencia CF to finally resume construction on what has become central Valencia's biggest eyesore and public image issue.

While the city cannot intervene in any way in the sale of Mestalla, it can push for Valencia CF to move forward with construction of the new stadium. Already today mayor Joan Ribó has publicly urged the club to not put the project on hold much further and find a solution.

As of today, the timeline suggests general contractor (FCC) should enter the abandoned construction site later this year, delivering a new 55,000-capacity stadium in mid- to late 2022.