Spanish Clubs Back CVC’s Soccer Deal Without Real, Barcelona

(Bloomberg) -- Spain’s soccer clubs backed a proposal from CVC Capital Partners to pump funds into the nation’s top soccer league that will leave FC Barcelona and Real Madrid, powerful opponents of the deal, on the margins.

The planned investment is now 2.1 billion euros ($2.5 billion), down from the 2.7 billion euros originally mooted, to take account of the teams that rejected the proposal, Javier Tebas, president of LaLiga said in a news conference. Of the 42 member clubs that convened to vote on the deal, 38 voted in favor, the league said in a statement.

“It’s a strategic agreement that will provide our clubs with greater capacity, will transform their management model and boost the appeal of our competition,” Tebas said in a statement.

The accord comes at a key moment for a Spanish league hobbled, like others in Europe, by the impact of pandemic lockdowns as it seeks to pilot a recovery backed by the injection of funds from CVC. But to make the deal workable, the private equity firm had to accept a formula that allows two of the world’s top clubs opt out.

The transaction highlights the obstacles facing CVC in its attempts to invest in the febrile world of soccer, especially in a Spanish context where two global giants of the game dominate the landscape. A previous attempt to buy a 10% stake in the media company of Italy’s Serie A league stalled in February, while Germany’s elite soccer body broke off talks over media rights with a number of private equity firms in May.

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Under a transaction valuing LaLiga at about 24 billion euros, CVC will own about 10% of a newly-created company housing all of its business, subsidiaries and joint ventures.

The project, dubbed “Boost LaLiga,” will channel funds to clubs to invest in facilities and players. The agreement with CVC may increase the value of TV rights by as much as 35% in the next eight to 10 years, said Tebas. Goldman Sachs Group Inc. will lead the syndication of 1 billion euros of debt to help fund the deal.

Even so, CVC’s investment plans have sparked controversy in a world of Spanish soccer also convulsed by news that its biggest star, the Argentine Lionel Messi, will leave FC Barcelona, his club since boyhood, for Paris Saint-Germain, and the collapse earlier this year of plans for a Super League of European top teams.

Keep Messi

Barcelona Chairman Joan Laporta said he couldn’t support a deal that would have meant mortgaging the club’s broadcasting rights for decades even if it might have provided funds that might have helped him to keep Messi. Real Madrid meanwhile said it would start legal action against CVC and LaLiga’s Tebas.

The two clubs had already clashed with LaLiga in April when they joined forces with Atletico de Madrid and other European clubs to create the Super League. That project fell through after provoking outcry among fans and fierce opposition from politicians and national leagues.

Athletic Club de Bilbao, one of the other clubs that rejected the deal, said in a statement it would “mortgage something that is ours, with great rigidity in the obligations of the funds and lack of flexibility in how they are used.”

Spokespeople for Real Madrid or Barcelona weren’t immediately available for comment.

Established in the 1980s, CVC is one of the world’s best-known private equity houses. It oversees about $163 billion in committed capital, according to its website. The firm has a strong sports background, having invested in everything from international rugby competitions to Formula 1 motor racing.

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