Breath of air for Spanish football. LaLiga a strategic agreement with the international investment fund CVC to inject 2,700 million euros into the competition and the clubs. This is an ambitious investment plan (called LaLiga Impulso) that will provide LaLiga and the Clubs with resources with the aim of continuing the transformation towards a global digital entertainment company, strengthening the competition and transforming the fan experience.
The operation will be carried out through the creation of a new company to which LaLiga will contribute all its businesses, subsidiaries and joint ventures and in which CVC will have a minority stake of approximately 10% of the capital. Additionally, CVC contributes funds to LaLiga through a joint account, a long-term agreement that aligns the interests of LaLiga, the Clubs and CVC. LaLiga will keep its sporting and organization and management powers for the marketing of audiovisual rights intact from this new company.
The clubs have unanimously approved the agreement with CVC at noon this Wednesday, as published by LaLiga. The delegated committee vote had 15 votes in favor and none against. However, it must be taken into account that neither Real Madrid nor Fútbol Club Barcelona participate in this governing body.
The teams have a lot to gain from this agreement. And it is that it will be the clubs who will receive a greater part of the ‘pie’, around 90% of the 2,700 million euros. In the absence of closing certain fringes on the distribution of these loans, some 270 million euros would go to the coffers of FC Barcelona and some 260 million to Real Madrid. The other team from the capital, Atlético de Madrid, will receive just under 200 million euros.
However, 70% of the 2,400 million that all the teams will receive must be used in infrastructures (facilities, fields, quarry…), 15% will be to pay financial debt and another 15% for the registration of players.
In this way, this money could be useful, among other things, to put an end to the impossible renewal of Leo Messi or to carry out new signings. It would also alleviate a good part of the straits of the teams that were having to make big adjustments to balance their salary caps.
As elEconomista.es has been able to confirm, the amount that the 42 professional teams will receive will be delivered as a participatory loan (a hybrid instrument between capital and loan) with an interest rate of 0% and a maturity of 40 years, so in principle its return (of the principal) should not suppose any type of burden for the teams. Being a hybrid instrument (it’s part equity) it won’t count as debt, so teams can use this money to improve their balance sheet assets and net worth. This improvement will be essential to comply with UEFA’s financial rules.
The ‘price’ of LaLiga
With this transaction, LaLiga would be valued at 24,250 million euros, a valuation that recognizes LaLiga’s leadership as one of the most outstanding sports competitions worldwide, as well as its growth potential through a greater digital presence focused on direct interaction with fans, investment in brand and sports project and internationalization, in a coordinated effort between LaLiga and the clubs. This is a value higher than that considered in other projects with similar characteristics.
LaLiga Impulso’s objective is to lead the transformation that the world of entertainment is undergoing and make the most of all the growth opportunities that Clubs have to develop a new business model that allows them to diversify and intensify income generation and marketing models. , accelerating your digital transformation.
Going from the current single-product model, based almost exclusively on the match and on the sale of audiovisual rights, to a multi-product/multi-experiential model, with a direct relationship with the fan, based on technology and digital and analytical capabilities .
A necessary transformation
To this end, LaLiga ensures that it is already on the path to becoming a global company, with the best entertainment content, a strong digital presence and the ability to capture and analyze data that allow direct omnichannel interaction with all fans and with a focus clear on optimizing the experience for fans.
The investment in improving the competition will have a direct impact on improving the experience and growing the number of fans. The technological capabilities of the LaLiga ecosystem and the Clubs will also be reinforced and will offer new content, new channels and new markets.
The distribution of the injection
90% of the 2,700 million euros that CVC will contribute will be directly concentrated on the Clubs, also including women’s football, semi-professional and non-professional football by the Royal Spanish Football Federation and the Higher Sports Council (more than 100 million euros). It is, therefore, an integrating, equitable and democratic strategic agreement, which not only shields the economic viability of all Spanish football Clubs, but also opens up a new present and future for them by allowing them to advance in their development and transformation for a decade. .
LaLiga highlights The resources provided by the agreement with CVC will also have “a multiplier effect not only in the world of football, but in the ability to create a Spain brand, as well as in job creation for the sector and in attracting talent” .
For the implementation of this strategic plan, the Football Clubs assume a commitment to allocate the investment they receive to the promotion of their own Development Plan agreed with LaLiga, which will include the following main areas: sports strategy, infrastructure, international development, development brand and product, communication strategy, innovation plan, technology and data and content development plan on digital platforms and social networks. All this incorporating sustainability, good governance and diversity as fundamental values of the model.
CVC contributes to this project all its financial potential, its management capacity and its expert knowledge in the development of sports businesses due to its extensive experience of more than 25 years in international competitions of rugby, volleyball, tennis, Moto GP, Formula 1 and its Relations with technological partners essential for the implementation of the specific projects of this plan.
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