The Spanish FA (RFEF) has joined the lawsuit against La Liga’s deal with private equity firm CVC Capital Partners — which is led by Barcelona, Real Madrid and Athletic Bilbao.
On Thursday, the RFEF said it is seeking “the annulment of the agreement” between La Liga and CVC, which it describes as causing “incalculable damage” to Spanish football.
La Liga clubs voted in favour of the deal in December, with 37 out of the 42 teams in Spain backing the agreement — termed ‘LaLiga Boost’ — at a general assembly.
Days later, Real, Barcelona and Athletic announced that they were taking legal action against La Liga, describing the “ruinous” partnership as “an illegal transaction”. The three clubs had long since been against such an agreement.
Barcelona, Real and Athletic are so opposed to the CVC deal that the trio proposed their own alternative to the agreement before the ratification of the deal in December, which they called ‘Project Sustainable’.
The deal — worth €2.1 billion (£1.7 billion) — between La Liga and CVC sees Spanish clubs receive additional funding in exchange for a stake in a new company that will obtain the country’s broadcast revenue and sponsorship rights for the next 50 years.
The RFEF added it was acting now “to prevent Spanish football from being conditioned for the next 50 years”, and accused the league of taking advantage of a “moment of economic weakness” with the investment deal.
Only La Liga and the CVC, the RFEF continued, will benefit from the investment partnership, which it said makes the evolution of professional football in Spain “impossible”.
(Photo: Visionhaus)
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CVC €2bn deal, what it means for La Liga and why Real and Barcelona are against it
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Why has La Liga decided to opt for the CVC deal?
La Liga’s statement, in August, said the investment will encourage clubs to develop new business models and revenue streams — in line with president Javier Tebas’ long term positioning of La Liga as a content provider, not just organiser of games.
The new joint vehicle will handle business matters including broadcast deals, sponsorships, and other commercial arrangements, utilising CVC’s experience in other sports around the globe.
A main driver for the deal, which values La Liga at €24.250 billion, is to help compete with the Premier League, which continues to generate significantly more global revenue for its member clubs.
Many La Liga clubs have been badly hit by COVID-19, with losses around the league totalling €733 million in 2020-21, so this extra money will be very useful for recovery projects.
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How does the CVC deal affect La Liga clubs?
Ninety per cent of the €2 billion which CVC is providing will go to clubs, including more than €100 million for women’s football and semi-pro leagues which are governed by the Spanish football federation.
It could be provided in the form of low-interest loans, rather than grants, with the improvements generated allowing the clubs to repay to the fund over the long term.
Clubs who want to access the funding will have to submit development plans to La Liga — and the money is to be spent for off-pitch projects, not transfers or player wages.
The list of potential uses given by La Liga includes sports strategies, infrastructure, international development, brand development, communication strategies, technology and digital content production.
For example, this suggests that Real and Barcelona might be able to access funds to help with their stadium redevelopments, or develop new content to sell to fans around the world, but not to buy Kylian Mbappe or Raheem Sterling.
Why do Barcelona, Bilbao and Real object?
The three ‘rebel’ clubs say that the deal does not represent good value for the clubs.
They argue that the money up front is not worth the sums which will have to be paid back, as well as handing some control of their affairs to a third party, and went so far as to make their own counter-proposal which they claimed would provide as much money on much better terms.
It is also the case that Real, especially, and also Barcelona, have been in confrontation with Tebas from long before the lawyer took up his role in 2013. The two clubs no longer have as much power as they once did with respect to the distribution of revenues.
The aborted Super League launch last year worsened already fractured relationships between the two Clasico clubs and the hierarchy of their domestic league.
In December, the trio of clubs said that their proposed Project Sustainable would provide the same capital to clubs as the CVC deal but with “infinitely better costs and terms”.
They detailed that their project would be “15 times cheaper” as it would cost clubs only €900 million over 25 years, compared to a cost of €13.1 billion over 50 years with the CVC arrangement.
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