S, is what they are thinking: a very important injection of money at a decisive moment. LaLiga has confirmed an agreement with Cvc to inject 2,700 million euros into the competition in an agreement that will provide the solution to many problems generated by the post-pandemic crisis. Yes, also to the renovation of Messi , the signing of (let’s say) Mbapp or to alleviate the immediate financing of works in stadiums such as the new Santiago Bernabu.
It is a multi-million dollar strategic operation in which the management has been working for a year and which will facilitate the growth of all the clubs. From the moment it is approved. With this injection of 2,700 million, for example, they will find themselves, with 15% that could directly be destined to reinforce their squads and sign players. The rest to structural improvements to stadiums and facilities. That means, once it has the approval of the Assembly of clubs, about 270 million euros for Barcelona and 261 for Real Madrid. Immediately, to reinforce its workforce, renew Messi, sign Mbapp or whatever they consider appropriate. It also ends, at a stroke, with a good part of the narrowness of teams that were having to tighten their belts a lot to square their salary caps, such as Levante.
This 15% direct for investment in templates will be distributed taking into account the television income of the last seven seasons, which in turn are also distributed based on sports results.
The LaLiga clubs are assembled in a Delegate Commission and, once this body approves it, the Assembly will vote and put it into operation.
This agreement with Cvc (an investment fund specialized in sport that has participated, among others, in Formula 1 and Dorna) has generated the expectation that LaLiga can grow to reach the Premier League level, in financial terms, in four years.
Keys to the agreement
It is about promoting a new business line, participating accounts. That is to say: LaLiga does not sell or assign any of its rights, but Cvc puts money in, LaLiga manages them and then returns a remuneration to Cvc. It is an operation similar to what it would be to pay an agency to help clubs and LaLiga to grow their business much faster.
Nor is it a financing, because CVC runs the risk of the business: if it goes well, they win and if it goes badly, they lose. They are not covered by any type of guarantee, they could lose everything, even if the football industry took a hit, although they seem to be clear that it is not, that’s why they enter with 2,700 million.
It is not a question related to the rights of the clubs, but they are developing a project with an investor that will allow them to grow quickly and for which they must remunerate him.
Specific data of the operation
LaLiga has confirmed in a statement the terms of the agreement that is being discussed in the Delegate Commission in this statement: The objective set is “to continue the transformation towards a global digital entertainment company, strengthening competition and transforming the experience of the fans” . The operation will be executed through the creation of a new company to which LaLiga contribute all its businesses, subsidiaries and joint ventures and in which CVC will have a minority interest of approximately 10% of the capital. Additionally, CVC provides funds to LaLiga through a participating account, a long-term agreement that aligns the interests of LaLiga, the Clubs and CVC. LaLiga will keep intact from this new society its sports competitions and organization and management of the commercialization of rights
24,250 million valuation
This is how the statement continues: “The transaction values LaLiga in 24,250 billion euros, a figure that recognizes LaLiga’s leadership as one of the most outstanding sports competitions in the world, as well as its growth potential through a greater digital presence focused on direct interaction with fans, investment in a sports brand and project and internationalization, in a coordinated effort between LaLiga and the clubs. This is a higher assessment than that which has been considered in other projects with similar characteristics, which recognizes the great work carried out by LaLiga to date.
The 2,700 million euros that CVC will contribute will they will directly concentrate 90% in the clubs, including also women’s soccer, semi-professional and non-professional soccer hand in hand with the Royal Spanish Football Federation and the Higher Sports Council (more than 100 million euros). It is, therefore, an inclusive, equitable and democratic strategic agreement, which not only shields the economic viability of all Spanish football clubs, but also opens a new present and future for them by allowing them to advance in their development and transformation for a decade. .
For the implementation of this strategic plan football clubs assume a commitment to allocate the investment they receive to the promotion of their own Development Plan agreed with LaLiga, which will include the following main areas: sports strategy, infrastructure, international development, brand development
and product, communication strategy, innovation plan, technology and data and content development plan on digital platforms and social networks. All this incorporating sustainability, good governance and diversity as fundamental values of the model.
CVC brings to this project all its financial potential, its management capacity and its expert knowledge in the development of sports businesses due to its extensive experience of more than 25 years in international sports competitions. rugby, tennis, Moto GP, Formula 1 and its relationships with essential technological partners for the implementation of the specific projects of this plan “.