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La Liga clubs to get cash injection from new league deal

Spain’s top football clubs including Real Madrid and Barcelona would get lucrative cash infusions under a proposed $3.2 billion deal between the country’s top league and a private equity firm.

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

However, La Liga said clubs would be obliged to use 70 percent of the money they receive on infrastructure improvements, such as technology. A maximum of 15 percent can be used on player acquisition and a further 15 percent to finance debts.

In a statement on Wednesday, La Liga said it had agreed in principle a “multipronged” deal with CVC including the $3.2 billion infusions in return for 10 percent 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 percent stake.

The Spanish football league’s Executive Committee later approved the plan, dubbed “Boost La Liga” (La Liga Impulso), and it will now be voted on by all league members at a General Assembly on a date to be set.

The deal values La Liga at around $28.7 billion in total and, if approved by clubs, will fund what it called “structural improvements” while offsetting some of the immediate impact from Covid-19, the league said in a statement.

Barca and Real Madrid to get biggest chunks

La Liga said the cash injection – 90 percent of which will go to clubs – 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 the request for comment.

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

Spain’s top football league announced it has agreed in principle to sell 10 percent of its business to private equity firm CVC Capital Partners for $3.2 billion, a welcome boost to clubs whose finances have taken a hit during the pandemic.

A logo of the most lucrative league in football, Spain's La Liga.
A logo of the most lucrative league in football, Spain’s La Liga.
(AA)

Spain’s top football clubs including Real Madrid and Barcelona would get lucrative cash infusions under a proposed $3.2 billion deal between the country’s top league and a private equity firm.

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

However, La Liga said clubs would be obliged to use 70 percent of the money they receive on infrastructure improvements, such as technology. A maximum of 15 percent can be used on player acquisition and a further 15 percent to finance debts.

In a statement on Wednesday, La Liga said it had agreed in principle a “multipronged” deal with CVC including the $3.2 billion infusions in return for 10 percent 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 percent stake.

The Spanish football league’s Executive Committee later approved the plan, dubbed “Boost La Liga” (La Liga Impulso), and it will now be voted on by all league members at a General Assembly on a date to be set.

The deal values La Liga at around $28.7 billion in total and, if approved by clubs, will fund what it called “structural improvements” while offsetting some of the immediate impact from Covid-19, the league said in a statement.

Barca and Real Madrid to get biggest chunks

La Liga said the cash injection – 90 percent of which will go to clubs – 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 the request for comment.

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

Source: Reuters

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