La Liga clubs approve CVC deal
Print Edition
Despite opposition from Real Madrid and Barcelona, the majority of Spanish league clubs yesterday approved a deal with an investment fund worth up to 2.7 billion euros (US$3.2 billion).
The league said 38 of the 42 clubs from the first and second divisions in Spain voted in favor of the deal with private equity firm CVC, which is intended to boost the clubs鈥 finances and help the league cut into the English Premier League鈥檚 global dominance.
The league and CVC gave the four clubs who voted against the deal the option to opt out, meaning they would not benefit from the new funds and would not relinquish a percentage of their future revenues. Athletic Bilbao also opposed the agreement. The fourth club that voted against the deal was not disclosed.
Real and Barcelona said that although the deal would inject a significant influx of cash in the next three years, the agreement would hurt the clubs鈥 income from broadcast rights in the long term as they would be tied to it for the next 50 years.
Real and Barcelona had already said they planned to take legal action against the league and CVC if the deal was approved in the general assembly.
Real noted that both the Italian and the German league refused the deal with CVC because they felt it undervalued their leagues.
The Spanish league was valued at 24.2 billion euros in the deal with CVC, which used to own Formula One and has been involved in other endeavors related to sports. The valuation would not change if Barcelona and Real opted out, the league said.
As part of the agreement, CVC would have a share of about 10 percent of the league鈥檚 revenues and a stake of 10 percent in a new commercial entity. The clubs would receive 90 percent of the money paid by CVC, with 70 percent aimed at long-term investments. Some of the money would also go toward paying off debts and increasing their spending limits on players and coaches.
The league said CVC will not have control of the management of the competition, or the sale of its broadcasting rights.
In an attempt to win enough support for the plan, CVC had modified its original proposal shortly before the vote, allowing clubs in La Liga, which covers Spain鈥檚 top two soccer divisions, to take part on a voluntary basis.
The league has argued the deal, called 鈥淏oost La Liga,鈥 would strengthen clubs and give them funds to spend on new infrastructure and modernization projects, as well as increasing how much they can spend on players鈥 salaries.
Real has said it is planning to launch civil and criminal lawsuits against La Liga president Javier Tebas and CVC Capital鈥檚 chief Javier de Jaime Guijarro over the planned deal.
The new La Liga season begins under a cloud of uncertainty this weekend without flagbearer Lionel Messi.
Messi鈥檚 unexpected departure to Paris Saint-Germain has left a gaping hole in Barcelona鈥檚 squad as it contemplates a future without its record scorer, appearance maker and most decorated player, who it had built its team around for so long.
His departure is also set to harm the club鈥檚 already frail financial situation further, with marketing consultant Brand Finance saying the club鈥檚 value could drop by up to 11 percent.
La Liga鈥檚 status as one of the world鈥檚 top leagues will also take a hit, with the value of its television rights set to fall and future sponsorship deals also likely to be reduced without the world鈥檚 most famous player.
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