Real Madrid and Barcelona have made a belated attempt to stop private equity group CVC’s €2 billion cash injection into Spanish football, with an offer to the contrary they say is superior. economically.
Two of Spain’s most successful clubs, along with Athletic Bilbao, have written to the heads of 39 other teams in the first and second divisions of Spanish football, urging them to refuse to agree to a deal. accept CVC and fall back to alternatives.
The rebel clubs’ move puts pressure on La Liga, which runs both divisions, ahead of a key vote on their deal with the Luxembourg-based buyout company.
The intervention marks the latest clash between La Liga and its two biggest clubs, which remain committed to trying to kick off a breakaway Super League with elite teams across Europe.
It also highlights contrasting visions of Spanish football, as it tries to recover from the financial devastation caused by the pandemic and compete with the English Premier League, the biggest league by revenue. in Europe.
In response, La Liga called the alternative financing “assumption”, and labeled it “an impromptu proposal drafted without minimal rigor”.
The Spanish federation also reiterated that the CVC agreement goes beyond the need for club financing, and points to the private equity firm’s history of sports investment and revenue growth in the sector. this area.
Under the new proposal, a specialized vehicle will be created to increase the debt of 2 billion euros at a cost of 2.5 to 3% a year for 25 years.
SPV will distribute the proceeds to the clubs, with the participating teams’ revenue meeting interest and amortization costs. The plan does not involve giving up an ownership stake in the league or its assets.
Titled “The Sustainable Project”, Real and Barcelona argue that it will cost less than the CVC alternative, potentially saving the clubs more than 12 billion euros.
People with knowledge of the matter said Bank of America, JPMorgan and HSBC are working with three clubs on funding.
The replacement proposal comes a day after La Liga’s executive committee approved its support for the CVC deal, known as Project Boost, before formally presenting the deal to the rest of the league. due for approval on December 10.
According to Project Boost, valuing La Liga at around 24 billion euros, CVC will provide 2 billion euros for clubs to lend interest-free.
Real and Barcelona have both raised concerns about the structure and economics of the deal, under which CVC will buy back a portion of the league’s broadcasting revenue over the next 50 years.
Opposition to the CVC deal forced La Liga to change its original proposal, removing three clubs from the agreement.
Real and Barcelona have clashed many times in La Liga. Both are among 12 European clubs that have sought to form European Super League in April, only to have it shot down by fans, politicians and current football governing bodies.
Javier Tebas, president of La Liga, opposes the Super League and warns that the concept is still not taken seriously. He also presided over the enforcement of the Spanish league’s financial regulations that prompted Barcelona to allow star player Lionel Messi to leave for Paris Saint-Germain.
La Liga has accused Real of putting its interests above the interests of Spanish football. A person close to La Liga warned the sponsorship proposal could discredit Real’s continued support of the super league.
According to consulting firm Deloitte, the revenue of La Liga clubs fell 8% to 3.1 billion euros in the 2019-20 season. Both are far behind the Premier League with a total revenue of 5.1 billion euros.
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