The Spanish Football Federation (RFEF) has called LaLiga’s agreement to sell 10% of its business to investment fund CVC Capital Partners for €2.7 billion as “completely illegal” and “appalling.”
Ahead of Thursday’s general assembly in which the two thirds of the 42 clubs that form LaLiga must ratify the approved sale, the Spanish FA has voiced their disapproval.
“The RFEF, being aware of the various complaints and comments made by various first and second Division clubs, has communicated its firm opposition to this agreement, through a burofax (a document that requires proof to third parties) sent to the LNFP (Spanish league),” the RFEF statement said.
On Wednesday, Reuters cited a source saying that Goldman Sachs will contribute a €1 billion syndicated ($1.17bn) loan to private equity firm CVC’s planned €2.7 bn investment in LaLiga. El Confidencial newspaper first reported Goldman’s involvement in the proposed deal,
Tebas replied with sarcasm to the Spanish FA’s statement and wrote: “Finally the RFEF has released the long-awaited statement regarding the Super League backing UEFA and the leagues. Oh no! Regarding the (Super League) project that erased Spanish football THEY DO NOT SPEAK OUT. Of course, to attack LaLiga they don’t fail. Instructions must be followed … they haven’t even studied the documents!”
The Spanish FA disagreeing with LaLiga is nothing new. Since the election of Luis Rubiales as RFEF chief on May 2018, many decisions in Spanish football has been accompanied with a dispute, some of which have had to be resolved in court.
The RFEF statement comes less than 24 hours after Real Madrid announced plans to take legal action against LaLiga president Javier Tebas and CVC Capital Partners over the deal.
Moreover, Madrid warned it will take every action possible to prevent the agreement, which was unanimously approved by the league’s executive committee last week, from going through.
The coronavirus pandemic has created a sense of urgency to bring more money into LaLiga. For their initial investment, CVC will pocket 11% of the money raised by LaLiga through the sale of television rights and sponsorship for the next 40 years.
The Spanish FA said LaLiga’s agreement “is appalling and regrettable for the future of all Spanish football and, on the other hand, fantastic for a fund and other possible beneficiaries.”
“When analysing the operation with a fifty-year perspective, which is the one provided by the LNFP and CVC, as well as its contents, we must conclude that it exceeds what could be understood as the powers of the league regarding the commercialisation of audiovisual rights and may irreversibly affect the future of the competition,” the RFEF added.
ESPN reported last week that Madrid feel the sale “endangers” their business opportunities by allowing CVC to take money, for example, television rights without the club agreeing to the deal.
Barca consider that the (€2.7bn) amount “is not congruent with the years of duration and that part of the audio-visual rights of all the clubs are affected for the next 50 years.”
The money raised from the sale will be distributed among the clubs in the form of a loan, repayable over a significant number of years. The payments will be based on the contributions the clubs have had since the centralisation of audiovisual rights in 2015, with Madrid allocated around €261 million and Barca €270m.
The clubs must spend at least 70% of the money on investments related to long-term growth, 15% on refinancing their debt, and 15% can be used to increase their league-imposed spending limits.
Villarreal are among the top-flight clubs that will vote in favour of the deal going through.
“We have to place La Liga in the best possible place,” Villarreal president Fernando Roig said. “I don’t understand Real Madrid and Barcelona’s reasons to oppose the CVC agreement. We must strengthen the structures and enhance the image of our league. It is very good for football if we know how to use these resources to improve LaLiga, after the problems we have faced due to the pandemic.”