Luxembourg-based investment fund CVC Capital Partners and Spain’s top football division La Liga agreed on 1.2 billion euros deal, while FC Barcelona and Real Madrid opted out. Had Barça accepted the deal, it would have likely been able to propose a new contract to Lionel Messi.
Image Credits: Shutterstock
On August 12th, Spain’s top football division La Liga and Luxembourg-based investment fund CVC Capital Partners agreed on an investment deal, with CVC investing around 1.2 billion euros. In exchange, CVC will receive around 8-9% of revenues generated by La Liga over the next fifty years.
38 out of the 42 clubs across the first and second division voted in favour of the deal and will perceive millions of euros based on their performance in the past years. The clubs won’t be completely free to do what they want with the money. They will use 15 per cent of the funds to spend on players and 15 per cent to pay down debts, with the remaining 70 per cent going towards infrastructures and technological innovation.
Four clubs voted against the deal and will not perceive any of the 1.2 billion investment but will continue to perceive their usual chunk of La Liga revenues, which mainly consists in broadcasting rights. These clubs are Real Madrid, FC Barcelona, Athletic Bilbao (all three first division clubs) and Real Oviedo (second division club).
Spain’s La Liga wins backing for CVC deal after last-minute compromise https://t.co/pOCRzCQ70i
— Financial Times (@FT) August 12, 2021
The deal was heavily criticised by both Real Madrid and FC Barcelona, which they consider illegal and would be “akin mortgaging the club’s rights over the next half-century” said Barcelona president Joan Laporta. According to La Liga president Javier Tebas, the main reason for Real Madrid and Barcelona’s position is their European Super League project, which doesn’t fit with this kind of deal.
By giving up on their share of the CVC deal, FC Barcelona is passing on 270 million euros, 40 million of which would have been used to increase their payroll. This would have roughly amounted to Messi’s salary, after he accepted a 50% pay cut with the intention extend his contract with Barcelona. However, this would have also probably prevented Barcelona to officially sign other players this summer. In any case, Barcelona refused the CVC investment, with Laporta arguing that the deal would have put the club’s future in jeopardy, even if it meant that the club could keep Messi.
Next to its deal with La Liga, CVC has already made several investments in sports. It was the majority shareholder in Formula One Group, the owner of the Formula One auto racing championship, between 2005 and 2016. Earlier this year, CVC has invested a reported 300 million dollars in the International Volleyball Federation (FIVB) to launch World Volleyball, a new commercial entity. The investment fund also acquired a 14.3 per cent stake in Six Nations Rugby for a reported 510 million dollars.
