La Liga has moved a step closer to receiving a major investment from private equity firm CVC after the deal was approved by 38 of the 42 clubs in Spain’s top two soccer divisions.
The agreement was sealed after opponents to the arrangement were given the option to opt out of the deal, which would see CVC invest €2.7 billion (US$3.2 billion) in La Liga in return for a ten per cent stake in a new company comprising all of the league’s businesses, subsidiaries and joint ventures.
Real Madrid, who have already threatened to take legal action to prevent the deal, and El Clasico rivals Barcelona were among those who voted against the proposal, alongside Athletic Bilbao and one other unnamed club.
Speaking during a news conference after the vote, La Liga president Javier Tebas said CVC’s investment is now likely to total between €2.1 billion (US$2.5 billion) and €2.2 billion (US$2.6 billion) without the participation of Real, Barca and Athletic.
Tebas added that the deal will see Luxembourg-based CVC receive 11 per cent of La Liga’s future media rights revenues for the next 50 years, although the figure would drop if the aforementioned clubs opt out.
Barcelona and Real Madrid lambast La Liga’s US$3.2bn CVC deal
While the likes of Real Madrid, Barcelona and Athletic Bilbao will not benefit from CVC’s cash injection, the opt-out clause also means that they will not have to hand over any of their share of future media rights revenue.
Under the terms of the deal, which has been labelled ‘Boost La Liga’, some 90 per cent of CVC’s funding will be channelled directly to the clubs, who will be able to spend 30 per cent of their allocation on registering players and addressing financial debt.
According to La Liga, the remaining 70 per cent should go towards infrastructure and technological development, while a portion of the overall investment is also being allocated to other levels of Spanish sport and soccer.
La Liga will also retain complete autonomy over sporting regulations and media rights sales.
“We are convinced that Boost La Liga is the answer to the challenges we have to face in the medium and long term,” Tebas said in a statement. “It is a strategic agreement that will provide our clubs with greater capacity, will transform their management model and will allow us to have a much more attractive competition. It is the boost we need to turn La Liga into a global digital entertainment company with the most attractive soccer competition in the world.”
The news comes at the end of a week when Lionel Messi, La Liga’s biggest star, completed his move to French giants Paris Saint-Germain after he left Barcelona, the only club he has played for, as they were unable to sign the Argentinian to a new deal under La Liga’s financial fair play rules.
The CVC investment had been seen as a way for Barcelona to raise the funds to potentially keep Messi, but the club said in the wake of the original announcement that ‘it is inappropriate to sign a half-century agreement given the uncertainties that always surround the football world’.
Real Madrid also opposed the deal from the outset and earlier this week released a statement saying that the club has initiated criminal and civil proceedings against Tebas over the agreement.
The Spanish Football Federation (RFEF) then weighed in on the argument on 11th August, branding the agreement between La Liga and CVC as ‘totally illegal’.
In any case, the deal will provide a welcome boost for La Liga clubs in the wake of the coronavirus pandemic which, according to a study commissioned by the league, has cost Spanish teams over €2 billion (US$2.3 billion) in total income over the 2019/20 and 2020/21 seasons.
It also sees CVC, which was once the owner of the Formula One and MotoGP motorsport series and most recently has made a number of investments in rugby union, finally gain a foothold in European soccer after being unable to get its deal with Italy’s Serie A over the line.