Private equity firm CVC set to invest €2.7bn for 10% stake in La Liga

Proposed deal sets off rumours of big-money transfer deals

Private equity firm CVC has agreed a deal to invest €2.7 billion for a 10% stake in La Liga. Photograph:  Brian Ach/Getty Images for La Liga

Private equity firm CVC has agreed a deal to invest €2.7 billion for a 10% stake in La Liga. Photograph: Brian Ach/Getty Images for La Liga

 

Spain’s top clubs would get lucrative cash infusions under a proposed €2.7 billion deal between the country’s top league and a private equity firm.

The deal sparked a bout of transfer speculation in local media, including that it could help finance eye-catching moves such as top France striker Kylian Mbappé joining Real Madrid, though La Liga said the funds would mostly be for investment purposes to which it would have to agree.

La Liga said on Wednesday it had agreed in principle a “multi-pronged” deal with CVC including the €2.7 billion cash infusion in return for 10 per cent of its revenue, as well as the creation of a newly formed company housing a range of commercial activities in which CVC would also take a 10 per cent stake.

The deal values La Liga at around €24.2 billion in total and, if approved, will fund what it called “structural improvements” while offsetting some of the immediate impact from Covid-19, the league said in a statement.

The cash influx would be particularly welcome to Real Madrid and Barcelona which have lately faced unfamiliar constraints on their spending power, but how much of it leaks out into transfer fees and player wages remains to be seen.

Local media reports suggested the injection could help Barca resolve star forward Lionel Messi’s contract situation, while it was also suggested that the cash could prove pivotal in Real’s reported pursuit of Paris St Germain’s Mbappé.

Importantly the stake sale still requires approval from the league’s executive committee and clubs, whose views have not yet been given. La Liga said the funds would be distributed on the basis of a formula derived from average audiovisual revenues over the last seven years, when La Liga started commercialising rights as a collective – implying the top two would get the biggest chunks.

Barca declined to comment when contacted by Reuters about the deal. Real did not immediately respond to request for comment.

CVC was part of a consortium last year which entered talks to buy a stake in the media business of Italy’s Serie A, but the deal fell through following objections from some clubs.

Under the terms of the deal, La Liga would set up a new company to house commercial elements, such as sponsorship deals, the league’s technology arm La Liga Tech and their joint US venture – including plans to stage a league match in the United States – in which CVC would take a tenth.

It didn’t say what structural improvements it envisaged but these could relate to stadium and training facilities.

Management of the league’s sporting responsibilities and its audiovisual rights business would remain outside the scope of the transaction, La Liga said. “When it comes to the rights strategy and sales, this will continue to be handled by La Liga,” a spokesperson said.

With the boost from the investment, the Spanish league hopes to match or exceed the English Premier League’s business in the next six to seven years, a source close to La Liga added.

For CVC, which used to own Formula One, the deal would add to its interests in sport. It agreed in March to invest €425 million for a share in the Six Nations tournament.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.