Private equity firm CVC has secured approval from 38 of the 42 club’s of Spain’s LaLiga to secure a stake in the league although El Clasico team’s Real Madrid and Barcelona remain opposed to the investment.
The agreement – now approved by the majority of club’s in the Spanish top-two divisions – would see CVC invest 2.7 billion into LaLiga in return for a 10% stake, whilst a new company would also be established with responsibility for commercial matters such as sponsorship, subsidiaries and joint ventures.
Most clubs are in favour of the financial investment due to the financial impacts of the COVID-19 pandemic, which have cost Spain’s football teams over 2 million in lost income from the 2019/20 and 2020/21 seasons.
Despite this, Real Madrid and Barcelona have voiced opposition due to the lack of consultation between LaLiga administrators and teams, and were joined by Athletic Bilbao and one other unnamed club in voting against the development.
The primary reason for the club’s opposition relates to the treatment of audiovisual rights, which the teams stated will be affected for the next five decades, despite the terms of the deal seeing these rights signed over on a competitive basis for three years.
According to LaLiga President Javier Tebas, CVC’s investment will total between 2.1 billion and 2.2 billion despite the nonconformity of the three teams, and the Luxembourg-based equity fund will receive an 11% share of future LaLiga media rights revenues for the next 50 years.
However, the three opposition teams will not have to hand over any share of their future media rights revenue as a result of a drop out clause, but will also be unable to benefit from the cash injection due to voting against the investment.
“We are convinced that Boost La Liga is the answer to the challenges we have to face in the medium and long term,” Tebas remarked.
“It is a strategic agreement that will provide our clubs with greater capacity, will transform their management model and will allow us to have a much more attractive competition. It is the boost we need to turn La Liga into a global digital entertainment company with the most attractive soccer competition in the world.”
According to LaLiga, 90% of the CVC investment will be channelled directly to LaLiga clubs, who will be able to spend 30% of their respective funding share on registering players and offsetting debts, with the remaining 70% going towards technological and infrastructure development.