After compromising at the last minute, Spain’s La Liga won support for the CVC deal

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La Liga Update

Spanish football clubs in La Liga voted overwhelmingly in favor of a deal with the private equity firm CVC Capital Partners, but only if the two biggest teams reach a compromise at the last minute.

After a six-hour meeting on Thursday, Real Madrid and FC Barcelona opposed the alliance, and CVC changed the terms of the deal at the last minute to prevent them from obstructing the deal.

La Liga President Javier Tebas confirmed that out of 42 clubs in the first and second divisions, 38 clubs voted for the deal. Real Madrid, Barcelona, ​​Athletic Bilbao and a secondary club that requested anonymity voted against it. A person familiar with the matter said that these four people will use opt-out.

Tebas said that the CVC deal has been brewing for 10 months. He told reporters at a press conference in Madrid that Real Madrid and Barcelona chose to withdraw because they are still in favor of forming an independent league. Elite clubs in EuropeHe said that CVC will invest 2.1 billion euros instead of the originally planned 2.7 billion euros because the club will not participate, but the implied valuation of La Liga is still about 24 billion euros.

The completion of the transaction will mark the first involvement of private equity in major European football leagues. Under the opposition of the club, the acquisition group’s recent attempts to invest in Italy’s Serie A and Bundesliga ended in failure.

“CVC has not helped us out of trouble in any way,” Tebas said. He said the club will use 30% of the funds to buy players and repay debts, and the rest will be used to invest in stadiums and infrastructure.

CVC, Real Madrid and Barcelona did not immediately comment.

According to the terms of the transaction, CVC will purchase a minority stake in a new company whose revenue will come from the broadcasting rights and sponsorship rights of La Liga. The organization also aims to increase the global audience of Spanish domestic games, thereby increasing the value of these rights.

The acquiring group will be entitled to 11% of media copyright revenue for the next 50 years, although it may sell its shares before then because private equity companies usually have a 10-year payback period.

The last-minute change will allow clubs that opt ​​out of any additional income generated by CVC investments without having to hand over funds to private equity groups.

This deal will not stop those who opt out of the competition, La Liga continues to sell all clubs and all competition media and sponsorship rights.

Participating clubs will receive advance cash from CVC in exchange for 11% of future income, but those clubs that opt-out will not receive it.

The deal includes a clause that if the club tries to leave the league again, it can reassess the value of the league. Barcelona and Real Madrid are part of this year’s UEFA Super League’s now collapsed plan.

In the days before the vote, Tebas repeatedly clashed with Real Madrid coach Florentino Perez, who believed that the deal underestimated the value of Spanish football and “mortgaged” its future. The club decided this week to take legal action against CVC and Tebas to invalidate the transaction.

There is still high tension within Spanish football due to Perez’s unsuccessful European Super League plan this year-another fundraising strategy for the sport’s biggest club, but it has been strongly opposed by the league.

Barcelona accused the league’s rules of failing to retain Lionel Messi, the most famous player in the world who signed with Paris Saint-Germain this week.

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