Despite the failure of the European Super League, Spain’s big two clubs are holding out as a new private equity deal is considered
Despite the failure of the European Super League, Spain’s big two clubs are holding out as a new private equity deal is considered
We said private equity hadn’t heard soccer’s final whistle, and we were right. European fund manager CVC Capital Partners is attempting a 50-year, €2.7bn deal with Spain’s top soccer division La Liga, which includes Real Madrid and Barcelona.
The planned deal will deliver a financial boost to the Spanish soccer clubs, which have seen revenues decline as fans stayed away due to COVID-19 restrictions. The deal will mainly fund infrastructure improvements, for which 70% of deal capital is earmarked, while the remainder can be used on player acquisitions and financing debts (15% each).
And debts are something FC Barcelona knows plenty about, as its gross debt has reached roughly €1.2bn, more than half of which is owed by the end of the 2021-2022 season, according to the Financial Times.
However, while La Liga is keen for the cash injection, the top clubs are not. Both were part of the plans for a European Super League earlier this year and are hopeful the project will still take off despite most of the teams involved pulling out after backlash from fans, UEFA, and even politicians.
Spain isn’t the only country of interest to private equity investors. Hardly a stranger to sports investment, CVC is involved in a proposed transaction in Italy’s Serie A soccer league in a bid to manage the league’s broadcasting rights, trademark, and commercial development, including maintenance of stadiums through an infrastructure fund. The fund manager is also involved in Six Nations Rugby, was previously an owner of MotoGP, and is reported to have made returns of $4.4bn over its 11-year ownership of Formula One.
Notably, Germany’s Bundesliga recently turned down private equity interest in international broadcasting rights of its games after clubs voted against it.
Although La Liga and a number of Spanish clubs involved agreed on the deal with CVC, some are yet to vote, but are expected to this week. One thing is certain: there’s never a dull moment in European soccer.
Find out more about the European Super League and private equity’s opportunities in soccer, now and in the future.
The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.