Spain’s top soccer teams have authorized a 1.994 billion euro investment from private equity firm CVC Capital Partners, the first of its type in Europe, albeit four clubs, including Barcelona and Real Madrid, have opted out.
On Friday, 37 teams voted in favor of the “LaLiga Boost” agreement, which gives CVC an 8.2 percent ownership in a new firm that would profit from LaLiga broadcasting and sponsorship rights.
According to a source close to the discussions, Real Madrid, Barcelona, Athletic Bilbao, and Ibiza voted against the agreement. There was no immediate public announcement from those clubs, nor any information on their next steps.
At least 32 of the 42 teams from the Spanish first and second divisions needed to back the plan. On top of the four objections, one other club abstained from voting, the source said, without naming the club.
LaLiga had said the deal would be worth 2.7 billion euros when it was first unveiled in August. The lower 1.994 billion euro figure announced on Friday reflected the opt-outs and will be shared among the participating clubs and paid over a three-year period, the league said.
It marks the first investment agreement from a private equity firm in a major European League.
“This is a new milestone in the history of LaLiga and its clubs,” LaLiga president Javier Tebas said. “It allow us to continue our transformation towards a global digital entertainment company, improving the competition and enhancing the fan experience.”
Goldman Sachs will contribute with a portion of the funds that CVC will invest in the Spanish football league and recover over 50 years, sources from LaLiga and the fund have said.
The clubs are committed to allocate 70% of the funds to investments linked to new infrastructure and modernization projects. Up to 15% can be used to sign players, with the remaining 15% for reducing debt.
The deal looked like it was at risk of unravelling as Barcelona, Real Madrid and Athletic Bilbao last week proposed an alternative proposal which would see JPMorgan (JPM.N), Bank of America (BAC.N) and HSBC (HSBA.L) jointly lend 2 billion euros in exchange for a fixed annual payment of 115 million euros for 25 years, a document seen by Reuters showed.
A source close to Real Madrid told Reuters the club will begin legal action against La Liga as they threatened when they announced their objection in August. The objecting clubs will not take any share of the CVC investment, though they will continue to receive their allocated share of TV rights money, LaLIGa said.
Barcelona and Real Madrid, who have yet to comment on the deal, were among the driving forces behind the failed plan to launch a breakaway European Super League earlier this year and vowed to continue to set it up after a Madrid court ruled against UEFA.
It is the third time CVC has tried to invest in a top European league, after separate plans with Italy’s Serie A and Germany’s Bundesliga to sell some media rights to it were scrapped earlier this year.
CVC is also lining up preliminary bids for a stake in the French football league’s media rights business, a source told Reuters this week.
CVC has invested in Formula 1, Moto GP and rugby and is reported by Sky News to be behind a new commercial venture that is preparing to merge the Association of Tennis Professionals (ATP) and Women’s Tennis Association (WTA).