Understand everything about La Liga’s controversial CVC fund deal, which annoys Real and Barca

UNDERSTAND EVERYTHING – The Spanish clubs have ratified the agreement to sell 10% of the capital of LaLiga to the investment fund CVC Capital Partners. However, four resistant clubs, including Barça and Real Madrid, are not part of this deal, which could have a link with the non-extension of Lionel Messi in Catalonia.

What is this Liga-CVC agreement for?

LaLiga, the company that manages Spanish professional football, has decided to sell 10% of its capital to the CVC Capital Partners investment fund. Amount of the transaction: 2.7 billion euros. The management of TV rights remains the responsibility of LaLiga.

By welcoming this minority shareholder, LaLiga immediately replenishes its funds in order to help Spanish football face the economic crisis caused by the coronavirus pandemic. It is expected that 90% of these 2.7 billion euros will be redistributed to clubs (male and female). In return, CVC will enjoy 10% of LaLiga profits for 50 years.

The investment fund should therefore (largely) recover its stake by drawing in particular in TV rights. If these do not increase, the clubs will therefore receive less money from the broadcasters.

What is CVC?

Based in Luxembourg, CVC Capital Partners claims management of 115 billion dollars in assets. His specialty is private equity. This means that CVC is pumping money into companies that are not listed on the stock exchange. The objective is to accelerate the development of the company in question, then to resell the shares with a capital gain.

In sport, CVC likes to invest in companies organizing competitions. This was the case with the commercial rights to Formula 1 in 2006. The purchase is estimated at around $ 1 billion. These rights were sold in two stages, first in 2012, then in 2016, for more than three billion dollars.

CVC has also invested in volleyball and rugby (with the English Premiership, the Pro14 which brings together Welsh, Irish, Italian, Scottish and South African teams and possibly soon the Six Nations Tournament). In football, La Liga is a first. But the Italian Serie A almost gave in to the sirens first: CVC, with other investment funds, were ready to buy the management of TV rights against 1.7 billion euros. But in the end there was no agreement. An interest in Ligue 1 was also mentioned at the start of the year in theAfter Foot on RMC.

Real and Barça are against it. Why?

FC Barcelona and Real Madrid have not signed the agreement, as have Athletic Bilbao and Real Oviedo. Main consequence: the redistribution of the 2.7 billion euros of CVC does not concern them. But these clubs will not be affected by a decrease in their TV rights.

The agreement is considered economically unfavorable in the long term by the two mastodons of Spanish football. « This agreement, using a deceptive structure, expropriates the clubs of 10.95% of their audiovisual rights for fifty years, and in contradiction with the law », even lambasted Real Madrid, denouncing a « gift to investors ».

The case is also political. How can Florentino Pérez and Joan Laporta, presidents of Real Madrid and FC Barcelona, ​​accept CVC money, as they continue to claim that their Super League project is the only solution to save football?

Is there a link with Messi’s transfer?

This question is legitimate, because the announcement of the non-extension of Lionel Messi’s contract at FC Barcelona (when an agreement had been found) arose in the midst of the CVC controversy.

A leader who resigned from Barça made the connection. Jaume Llopis said Madrid president Florentino Pérez had convinced his Catalan counterpart Joan Laporta not to endorse the CVC agreement, and therefore to give up an extension of Lionel Messi. The Real Madrid boss has denied any influence.

Nevertheless, the Spanish press affirms that the Spanish clubs signatories of the CVC-LaLiga agreement will be able to devote 15% of the money obtained to increase their salary cap and therefore to register new players for the championship. However, FC Barcelona, ​​which refused the CVC agreement, officially explained that it was unable to approve a new contract with Lionel Messi.

With the jackpot money at 2.7 billion euros, could the Argentinian have been saved? Difficult to say, especially since the club has also recruited Memphis Depay, Sergio Agüero and Eric Garcia. But that would undoubtedly have made the operation less impossible.

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