La Liga, the entity which organizes the Spanish football championship of the first and second divisions, sealed, Wednesday, August 4, an unprecedented agreement with the investment fund CVC Capital Partners to sell 10% of its capital against 2, 7 billion euros and so “ ensure economic viability ” of the 42 professional Spanish football clubs.
The agreement in principle between the two parties, which values La Liga at more than 24 billion euros, aims to “To strengthen the overall growth of La Liga and its clubs by continuing to transform it into a global digital entertainment company”, assures the league in a press release, and thus to break with a “One-product model based almost exclusively on revenues linked to matches and the sale of audiovisual rights”.
This agreement “Will revolutionize the management model of football clubs” and allow the acquisition “Better facilities and better players “, Javier Tebas, the president of the Spanish league, confirmed in a second press release.
This will thus create a new company, “LaLiga Impulso”, which will house its business activities – such as sponsorship contracts and income from matches – a company in which the CVC fund, which has already invested in the six-nation tournament this year, will take a 10% stake.
Loans repayable over forty years
The Spanish professional league clarified that it “Will maintain outside of this new company its competences in sport, organization and marketing of audiovisual rights”, main source of funding for clubs.
The entity ensures that “90%” of the HVAC input will go “To the clubs” Spain, through loans repayable over 40 years: 70% of the resources will have to be allocated to infrastructure and various investments “ to develop the brand ”, 15% to refinancing debt and losses due to the pandemic, and the remaining 15% can be used to strengthen their workforce.
The money will be distributed, according to the Spanish sports press, taking into account the television rights revenues of the last seven seasons. The two biggest clubs on the peninsula, Real Madrid and FC Barcelona, would pocket 261 million and 270 million euros respectively, and could thus use the funds to, in the case of Barça, renew the contract of its legendary captain, Lionel Messi or, in that of Real, recruit French footballer Kylian Mbappé.
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