Real Madrid Threatens CVC With Legal Action Over Soccer Deal
(Bloomberg) -- CVC Capital Partners’ deal to buy a stake in Spain’s top soccer league may end up in court as one of the country’s most storied clubs announced it would take legal action against the private equity firm.
Real Madrid CF’s board of directors agreed to initiate both civil and criminal proceedings against CVC, the club said in a statement on Tuesday. The move follows CVC’s agreement last week to invest 2.7 billion euros ($3.2 billion) in LaLiga in return for a 10% stake in a new company housing all of the Spanish soccer league’s businesses, subsidiaries and joint ventures. CVC didn’t immediately respond to requests for comment.
Both Real Madrid and FC Barcelona, the fan-owned clubs with the highest number of Champions League and LaLiga trophies, opposed the deal last week. Real Madrid said this agreement, “by way of a misleading structure, expropriates 10.95% of the clubs’ audiovisual rights for the next 50 years, in breach of the law”. Barcelona president Joan Laporta said that the club could have renewed the contract of superstar Lionel Messi if it had backed the deal, but that doing so would affect the club’s broadcast rights for decades.
The meeting to decide whether the agreement with CVC goes ahead will take place Aug. 12. LaLiga needs 22 out of 42 first and second division clubs for the signing to happen. The only other team to oppose the deal so far is Athletic Bilbao, according to media reports.
Real Madrid will also seek legal action against LaLiga President Javier Tebas and CVC managing partner for Spain and Italy Javier de Jaime, according to the statement on Tuesday.
LaLiga “reiterates that it has all the favorable legal reports that confirm maximum compliance with the legal system,” the Spanish league said on Tuesday. It also said that Real Madrid directors are trying to prevent other teams from expressing their view on the deal by use of coercion and threats.
The Spanish league added that Real Madrid has filed 51 legal actions over recent years, “a majority of which have been won by LaLiga” -- including some related to broadcasting rights.
“CVC presented LaLiga a transaction that aims to create value for Spanish football as a whole,” representatives for CVC said in an emailed statement. Real Madrid’s announcement is “disproportionate” and lacks a legal basis, the private equity firm said, adding it would reserve the right to take any action it deems necessary.
The legal threat is the latest episode in the tussle between LaLiga and its most highly-decorated teams after both Real Madrid and Barcelona joined forces with other top European clubs -- including Chelsea and Italy’s Juventus -- in a failed attempt to create a SuperLeague.
The teams promoting the project were looking to secure higher revenues but the plan was shelved after adverse reaction from fans, politicians, and their respective domestic leagues, including LaLiga, which argued it would have a negative impact on the game as a whole.
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