Barça, Madrid fume over ‘yes’ to CVC deal


LaLiga approves CVC-deal Image: LaLiga

The top of the heap soccer clubs in Spain gave the thumbs-up to private equity firm CVC’s proposed investment on August 12th despite LaLiga clubs Real Madrid and FC Barcelona opposing the same tooth and nail.

‘Reuters’ stated that the whole approval has come with a rider – individual clubs can opt out of the deal. This information was given by the LaLiga President, Javier Tebas.

LaLiga is the men’s top professional football division of the Spanish football league system.

CVC Capital Partners is a private equity and investment advisory firm with approximately US$111 billion in secured commitments since inception across European and Asian private equity, credit and growth funds.

‘Reuters’ further stated that facing fierce opposition from the country’s two leading clubs – Real Madrid and FC Barcelona – to the plan that initially targeted 2.7 billion euros ($3.2 billion) in investment, CVC modified its original proposal shortly before the vote, allowing clubs in LaLiga to take part on a voluntary basis.

The deal was given the nod by 38 out of LaLiga’s 42 clubs, with Real Madrid, FC Barcelona and Athletic Bilbao, who are all owned by their members, voting against. Second division Real Oviedo was the other club to oppose it.

Tebas told at a presser after the vote that if Real Madrid, FC Barcelona and Athletic Bilbao choose not to join the deal, the investment is likely to total between 2.1 billion and 2.2 billion euros.

He added that CVC would receive 11 percent of revenue from television rights over the next 50 years in exchange for pouring money into LaLiga, which covers Spain’s top two soccer divisions, although the figure would drop to 8-9 percent if the clubs opted out.

Tebas said the deal, called ‘Boost LaLiga’, 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.

But it has met fierce opposition from Real Madrid and FC Barcelona as well as the Spanish soccer federation.

Real Madrid has said it is planning to launch civil and criminal lawsuits against LaLiga’s Tebas and CVC Capital’s chief Javier de Jaime Guijarro over the planned deal.

FC Barcelona President Joan Laporta criticized the deal recently, saying he was not ready to accept “mortgaging the club’s television rights for the next 50 years”, even though the cash injection could have allowed the club to sign soccer legend Lionel Messi to a new contract rather than the giant joining Ligue 1 club Paris Saint-Germain F.C. of France.

Any clubs remaining outside the deal will not surrender any of their earnings but will not receive a share of the CVC funds. However, they will not be able to go back to selling their own TV rights as the collective sale is stipulated in law.

Tebas said the league had managed to grow in the last few years in spite of Real Madrid and FC Barcelona opposing changes it has made, such as centralizing television rights in 2015, adding they did not wish to see the league develop as they were behind the bid to launch the European Super League.

He added, “Real Madrid and FC Barcelona try and block everything we do but we keep growing anyway and will continue to grow whether all clubs agree to this deal or not. They want most of the money to flow to them.”

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