LaLiga’s agreement with the American fund CVC to inject 2.7 billion euros into the competition has been received with enthusiasm by many, relief by others and doubts by almost everyone.
The CVC officials themselves have been able to explain the operation today for the members of the LaLiga Delegate Commission who, after approving it unanimously, 15-0, will leave their final approval in the hands of the next Club Assembly (August 12).
Questions and answers
1. Does this fix the salary limit problem for clubs?
No, but almost. Of course, it leaves it very close to hand. Smaller clubs can definitely take the worry out of it, the bigger ones are put on a tray. They have to work, but some have to work much harder.
2. With this, can Barcelona register Messi?
No, but it doesn’t seem as impossible anymore. In fact, it makes it seem almost even easy. Barcelona will enter around 270 million euros if this is approved, which has an impact of 40.5 million to alleviate their salary bill.
The problem Barcelona had was they couldn’t cut their salary mass and continue registering indiscriminately, now with this 40 million plus contracts they can renegotiate, they will have some margin of action.
They aren’t obliged to remove all the excess salary in this market, but what they couldn’t do was increase it.
3. This money… how is it to be repaid?
“It’s a soft loan, that means that the interest is much lower than what a normal market would require, also with a 40-year margin. No bank or investment fund would finance a club right now for more than five years,” explained Marc Menchen.
4. Is it mandatory? Can a club that doesn’t agree reject it?
They can reject it, yes. The Club Assembly has to vote for it and some clubs will not agree, and can stay out if they want. What happens then is the money you don’t accept will directly benefit your rivals. It can happen as was the case with the joint sale of TV rights. Real Madrid didn’t agree but still accepted the income.
5. What has LaLiga sold for CVC to put 2.7 billion euros in?
It’s as if LaLiga has hired an external agency to improve its commercial activity and is paying for it. Strategic alliances, sale of sponsorships, thematic spaces and TV business.
6. What does the fund bring in return?
In return they put those 2.7 billion euros for a 10 percent participation in the commercial business and an account in participation of the future benefits obtained with this activity.
7. Does anyone aside from LaLiga win?
Yes, “In addition to distributing 90 percent of the 2.7 billion euros among the clubs, there is another 100 million euros that will be distributed between the RFEF and the CSD for women’s and non-professional football.”
8. The clubs can spend 15 percent to reinforce the squad and players, what about the rest?
“The funds will be finalists and above all should be directed to stadiums, sports cities, international brand development, communication, innovation, technology and date and content development plan on digital platforms and social networks,” explained Menchen.
A total of 70 percent of the 2.7 billion euros will go to infrastructure development, 15 percent more will go to refinance debt and compensate COVID losses and 15 percent to increase the payment to sporting staff.
In the last section there is a relevant note “Each club can decide how to divide that additional margin to make their first team, they can consume it in one, two or three years.”
9. Who are CVC? Are they legitimate?
“Yes, they are one of the investment firms that knows the sports industry best internationally, having already been a shareholder in MotoGP, and Formula 1 as their greatest examples of global expansion. It also aspires to revolutionise tennis and volleyball and has been very close to reaching a similar agreement with Serie A. They are a serious fund that seeks to make money.”