MADRID, Aug 4 (Reuters) – La Liga, Spain’s top soccer league, has agreed in principle to sell 10% of a newly incorporated company housing most of its activities to private equity firm CVC Capital Partners for 2.7 billion euros ($ 3.2 billion), he said on Wednesday.

The deal values ​​host Real Madrid and Barcelona La Liga at around € 24.2 billion and, if approved, will fund “structural improvements” while offsetting some of the immediate impact of COVID -19, the league said in a statement.

The influx of cash would be particularly welcome for these two clubs who have recently faced unknown constraints on their purchasing power, but it remains to be seen how much of it impacts transfer fees and player salaries.

La Liga said around 90% of the funds raised would go directly to clubs who are to use the money to fund investment programs agreed with the league.

Faced with the end of a cycle of rapid growth in the value of television rights – and hit by a year of near zero ticket sales due to attendance restrictions – football leagues and clubs, not just in Spain, are coming together. are struggling to find other sources of income. .

The failure of an attempt earlier this year by 12 of Europe’s biggest clubs to create a breakaway “Super League” has stepped up pressure on the company’s incumbents.

COMMERCIAL ELEMENTS

Under the terms of the deal, La Liga would create a new company to house its business elements, such as sponsorship deals, in which CVC would take a 10% stake. He did not say what structural improvements he was considering, but those could relate to stadiums and training facilities.

The management of the league’s sporting responsibilities and its audiovisual rights activities would remain outside the scope of the deal, La Liga said.

“This agreement aims to lead the transformation in the entertainment world and maximize all growth opportunities for clubs,” he said.

With the investment boost, the Spanish league hope to match or surpass business for the English Premier League over the next six to seven years, a source close to La Liga added.

The sale of participation always requires the approval of the executive committee of the league and the clubs.

For CVC, which once owned Formula 1, the deal would strengthen its interests in the sport. He agreed in March to invest 365 million pounds for a share of the Six Nations of rugby union grouping France, Ireland, England, Scotland, Wales and Italy.

As part of a consortium last year, it started talks to buy a stake in the media business of Italy’s top football league, but the deal fell through over objections from some football clubs.

Earlier this year, La Liga expanded its partnership with Microsoft Corp (MSFT.O) in a bid to increase revenues for its pandemic-affected football clubs and re-energize a fan base that increasingly consumes digital products.

($ 1 = 0.8424 euros)

(This story is corrected in the seventh paragraph to remove the reference to match day income)

Reporting by Aishwarya Nair in Bengaluru and Nathan Allen in Madrid Editing by Jason Neely and David Holmes

Our Standards: The Thomson Reuters Trust Principles.


Source link

Previous

Dalmia Nisus Finance invests around Rs 80 cr in 2 real estate projects

Next

Nucleus hires business development manager for London and South East

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also