The coffers of European football are empty. From the German Bundesliga to the Italian Serie A, the biggest leagues are looking for fresh money. In a report released in May, the European Union of Football Associations (UEFA) has estimated at more than 8 billion euros, over two seasons, the cost of the Covid-19 pandemic for the formations of the Old Continent. From there to bringing an investment fund into the locker room, some hesitate.
La Liga, it gave in mid-August to the sirens of CVC. The clubs of the first and second Spanish divisions will receive, in the form of participatory loans, 90% of the 2.1 billion euros disbursed by the fund. They will have to devote 70% of this contribution to investing, particularly in their infrastructure, 15% to reducing their debt and compensating for the losses generated by the health crisis, and the last 15% to their workforce (recruits, salaries, etc.).
Expertise
“By adjusting the allocation of the money paid, CVC is putting in place safeguards. It is a way of reassuring future investors that the product will be of better quality tomorrow than today ”, explains Jean-François Brocard, lecturer at the center of law and economics of sport at the University of Limoges.
The high valuation of clubs has helped attract financiers to a sector that is historically known to be unprofitable.
The fund will not have control over the management of the competition or the sale of its broadcasting rights. But he will now take 10% of the “cake” redistributed by La Liga. A priori, a good financial deal for CVC. But on the club side, opinions diverge. If Real Madrid rebels, Miguel Angel Gil Marin, main shareholder of Atletico Madrid, assures that he will find his account.
Knowing that “Audiovisual rights managed by La Liga represent 30% of income “From Atletico, the expected drop in turnover, at constant data, would be 3%, he quantified in a statement to the EFE agency. Less income than “Sincerely thinks of recovering” in two ways: firstly thanks to the investments made in a “True city of sports and entertainment” and then thanks to the expertise provided by CVC, particularly in the field of data, which will increase La Liga’s revenue.
A risky bet
The arrival of investment funds in football does not date from the health crisis. The rise in television rights, the explosion in player transfer amounts, or the high valuation of clubs in recent years have helped to attract financiers to a sector which has historically been known to be unprofitable.
You have 24.64% of this article to read. The rest is for subscribers only.