CVC Capital Partners Ltd update
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Spain’s top football league has reached a 2.7 billion euro deal with CVC Capital Partners, which marks the latest attempt by private equity to invest in major European leagues.
This transaction, which has not yet been approved by the club, valued La Liga at slightly more than 24.2 billion euros. CVC will hold a minority stake in a newly formed entity that will manage the broadcasting, sponsorship and digital rights of La Liga. The entity manages Spain’s two major football leagues but will not take over its regulatory powers over the sport.
According to two people familiar with the matter, under the project called “La Liga Impulso”, nearly 2.5 billion euros of investment will be directly used for the club within three years.
According to a person familiar with the matter, Spain’s most successful clubs Real Madrid and Barcelona Football Club will each receive approximately 260 million euros. Barcelona declined to comment. Real Madrid did not immediately respond to queries.
Two people familiar with the matter said the club may be asked to vote on the deal as soon as next week.
At the same time, other top European leagues ended their negotiations with private equity firms after they strongly opposed the transfer of control to external groups.
Last year, CVC won the support of some clubs in Italy’s top Serie A with a similar deal, but with the opposition of the elite teams, these negotiations fell into a deadlock. In May, Germany’s top football clubs voted Withdraw from negotiations with private equity firms Sale of shares in Bundesliga.
CVC’s La Liga investment is designed to help the club recover from the financial shock it suffered during the pandemic, although a person close to the league insists that the financing is not a rescue package. It also aims to attract more international audiences, improve technology and inject some funds into grassroots football in Spain.
CVC declined to comment on the transaction.
It is expected that Barcelona and Real Madrid will play an important role in deciding whether the deal is concluded.They clashed with La Liga over the issue of supporting the UEFA Super League. This is a separate game that guarantees that every founding member will have “Welcome bonus” of 200 million to 300 million euros.
Although most supporters of ESL withdrew their support within a few days after the fans strongly opposed it, despite the strong opposition from UEFA, European football governing bodies and La Liga, the two Spanish clubs are still doing their best. Fight for the future.
During the pandemic, investors have targeted sports trading because leagues and clubs have difficulty recovering from lost revenues caused by cancellations or games played in empty stadiums.
Although some private equity firms own the club’s shares, such as Silver Lake’s investment in Manchester City’s owner City Football Group, many people are attracted by what they consider to be low-risk bets on the league itself.
CVC, the former owner of Formula One and MotoGP, has snapped up shares in rugby games such as the Six Nations League, the Premier League and December 14 And has joined the International Volleyball Federation.It is planning a $600 million tennis deal, Had previously negotiated the acquisition of shares of the San Antonio Spurs of the US basketball team.
According to data from Deloitte, the top 20 clubs in La Liga had a total revenue of 3.1 billion euros in the 2019/20 season, which was affected by the pandemic and dropped by 8% from the previous year. Their rivals in the Premier League have a revenue of 5.1 billion euros.
So far this summer, Real Madrid has avoided major signings, while Barcelona has been forced to cut wages and other expenses to comply with La Liga’s financial regulations, otherwise the club will not be able to register players in the summer transfer window.
Private equity firm Ares Management acquired just over one-third of last season’s La Liga champions Atletico Madrid and supported the club in raising 181 million euros.