Deal worth billions: LaLiga sells shares in investment company – clubs receive 90%

Messi extension becomes possible 

In a groundbreaking billion-euro deal, Spain’s LaLiga is repositioning itself to provide its clubs with fresh cash. According to its own information, the league agreed in principle to a sale of 10% of its business to the international investment company CVC for €2.7 billion. The final decisions by the management bodies of both contracting parties are expected on Wednesday evening.

Spain’s top-flight thus ensures a novelty in professional football: no other top league in Europe has so far entered into a strategic partnership with a private investor. “The transaction is expected to further drive the global growth of LaLiga and its clubs, continuing the league’s transformation into a global digital entertainment corporation,” the league said, adding that 90 percent of the CVC investment (€2.3 billion) will go directly to the clubs.

However, the money does not only benefit the big clubs such as Real Madrid and FC Barcelona, but also flow into the clubs of women’s and amateur football. The distribution key is to be determined at a meeting of all clubs, but Barça can expect to receive around €270 million, while Real Madrid will receive just over €260 million, according to Spanish media reports. Through this deal, the highly indebted FC Barcelona will be able to sign a new contract “without any problems” despite all the difficulties with superstar Lionel Messi, wrote La Vanguardia, among others. The club will be able to meet the financial requirements thanks to the cash injection. Especially the salary costs are a big problem for Barcelona, since the league has set salary caps for all clubs for several years.

For the entry of CVC, the former owner of Formula 1 and one of the ten largest investment companies in the world, the entire business of the league will be transferred to a newly formed company. The Luxembourg-based private equity group holds a minority stake of ten percent in this company.

LaLiga currently valued at €24.2 billion

The Spanish league is currently valued at a total of €24.2 billion. This includes all TV and other marketing rights, as well as other shareholdings and joint ventures.

Selling shares is a new way of opening up new sources of money. The Covid pandemic has further exacerbated the financial problems of top clubs such as Real Madrid and FC Barcelona. To refinance their horrendous expenditures, these two clubs are still struggling to launch a multi-billion Super League with many of Europe’s top clubs, which failed spectacularly last spring.

In addition to LaLiga, Serie A in Italy had also seriously considered selling shares to a consortium in which CVC is also represented in recent months. However, following an in-principle endorsement of the project by the clubs in the fall of 2020, there is currently a question mark behind the deal. Top clubs such as record champions Juventus Turin, title holders Inter Milan and former champions SSC Napoli consider the investors’ offer of €1.7 billion too low at this stage.

Nota de prensa: #LaLiga confirma un principio de acuerdo con CVC para inyectar 2.700 millones de euros en la competición y los clubes.

— LaLiga (@LaLiga) August 4, 2021

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