The agreement reached between LaLiga and the international investment fund CVC , called LaLiga Impulso and endowed with 2,700 million euros, and that will serve in principle to stimulate the battered coffers of the clubs, which have seen their income reduced due to the pandemic, It has fierce opposition from Real Madrid, which intends to sue the employer for misappropriation of assets.
And it is that the club chaired by Florentino Pérez considers that LaLiga is acting behind his back and has not counted on the opinion of the clubs at any time, mortgaging his business.
Some sources also point to serious opposition from FCBarcelona, Madrid’s traveling companion in the European Super League, and serious doubts from Athletic Bilbao.
The investment, which will allow, according to LaLiga, to have the necessary resources “with the aim of continuing the transformation towards a global digital entertainment company, strengthening the competition and transforming the experience of the fans.”
Although the Delegate Commission, in which neither Barça nor Madrid are represented, unanimously approved the project, Florentino Pérez, the white president, has been reluctant in full conflict with the employers for the creation of the new European Super League, arguing that he does not need the money.
As LaLiga explained yesterday in a statement, 90% of the resources contributed by CVC Capital Partners, about 2,430 million euros, will go to clubs, which also include women’s football and semi-professional football and non-professional in the hands of the Royal Spanish Football Federation and in the Higher Sports Council (more than 100 million euros).
Participation
In exchange for this amount, LaLiga cedes to CVC a minority stake of approximately 10% of the capital of a new company to which it will contribute all its businesses, subsidiaries and joint ventures. However, LaLiga will keep intact its sports competitions and the organization and management of the commercialization of audiovisual rights.
As confirmed by the Economist, the amount that the 42 professional teams will receive (20 from LaLiga Santander and 22 from LaLiga SmartBank) will be delivered as a participating loan (a hybrid instrument between capital and loan) with an interest rate of 0% and a maturity to 40 years, so in principle its return (of the principal) should not imply any type of burden for the teams.
As it is a hybrid instrument, it will not count as debt, so teams can use this money to improve their balance sheet assets and net worth.
This improvement will be essential to comply with UEFA’s financial rules. Of the amount allocated to the clubs, 70% of the investment they receive will have to be allocated to the development of infrastructures and the growth of the competition itself; 15% will be dedicated to refinancing the debt, as well as to compensate for the losses caused by the pandemic, and another 15% to transfers.
In the latter case, to calculate the distribution of 15% of the funds to the different clubs, the television income of the last seven seasons will be taken into account, which is distributed according to the sporting results.
Thus, teams such as Fútbol Club Barcelona or Real Madrid would receive around 270 and 260 million euros, respectively, while Atlético de Madrid, current champions of the competition, could earn about 220 million euros.
Extra liquidity
In this way, the clubs will have liquidity that was not foreseen at the beginning of the transfer market, so that some operations that have been paralyzed with the aim of not exceeding the salary limit set by the employer, could now go ahead.
This is, for example, what has happened with the renewal of the Argentine contract Leo Messi for FC Barcelona, without forgetting the possible signing of Kylian Mbappé for Real Madrid.
LaLiga’s business
However, football clubs undertake to allocate this investment to strengthening strategic areas, such as sports strategy, infrastructure, international development, brand and product development, communication strategy, innovation plan, technology and data and plan of content development on digital platforms and social networks.
With this transaction, LaLiga would be valued at 24,250 million euros. This is a higher assessment than that which has been considered in other projects with similar characteristics. Although the LaLiga Delegate Commission unanimously ratified the strategic agreement reached with CVC, it will now have to be the Club Assembly that has to approve it next week.
In the absence of authorship and the definitive closure of last year, the 42 teams of the First and Second divisions of Spanish football will close the 2020-2021 financial year, which ended on June 30, with joint losses of 733 million euros due to the effects of the pandemic.
This is what the economic report prepared by LaLiga estimates, in the hands of the consulting firm PWC. The forecast is for revenues to fall 29.7%, to 3,545 million. Of the total, almost half, 350 million correspond to Barça.