On December 16, Beijing time, the official website of the Spanish Football Association published a joint statement of real Madrid, Barca and Bilbao, making it clear that it would take legal action to refuse to accept the "La Liga Promotion Project" adopted by La Liga on December 10 to safeguard the legitimate rights and interests of the club. The statement said that the project not only violates the most basic reasons in Spanish sports law and La Liga regulations, but also, once implemented, will cause irreparable and serious damage to Spanish football. At the same time, the Spanish Football Association also issued a statement arguing that the cooperation agreement between La Liga and CVC is completely illegal.
The La Liga promotion project was actually reached by La Liga and CVC Capital as early as last August, and its core cooperation is that CVC will acquire 10% of la Liga shares by injecting 2.7 billion euros, and then obtain 10% of the broadcast revenue of La Liga in the next 50 years. As a "supporting service", CVC will seek to further expand La Liga's international reach. On 10 December, 37 of the 42 clubs voted in favour of the vote organised by la Liga, with only 4 opposing and 1 abstaining. It was also based on the results of this vote that La Liga adopted a cooperation with the CVC.
If it is something that the vast majority of clubs agree to, why are Real Madrid, Barca and Bilbao firmly opposed and do not hesitate to use legal means to prevent the project from advancing?
Messi's departure to Paris is actually related to this project?
For the sake of the 2.7 billion in front of you, La Liga is "in a hurry to go to the doctor"?
The la Liga cooperation with the CVC, when it was made public as early as last August, has attracted strong opposition from clubs such as Real Madrid and Barcelona and the outside world. The explanation given by the president of La Liga, Tebas, is that due to the impact of the epidemic, there have been obvious financial difficulties in the operation of a considerable number of La Liga and La Liga clubs, and the injection of CVC cooperation fees will well alleviate the pressure on relevant clubs. In short, in the current environment, CVC funds can solve the "urgent needs" of La Liga and La Liga clubs. In fact, judging by the results of the december 10 vote, the project is indeed supported by the vast majority of clubs.
If this is the case, why are clubs such as Real Madrid and Barcelona firmly opposed? Quite simply, benefit! After the CVC injection, it will take 10% of La Liga's 50-year broadcast revenue. In la Liga's 2018-2019 season, for example, the total cost was €1.42 billion. As we all know, the negotiation of broadcast rights in football leagues is generally based on a cycle of 5 years, and the cost of each new cycle will increase compared with the previous week, that is, if it is calculated in 50 years, there is even a possibility of doubling in the future. And, more importantly, even with the cost of the 2018-19 season as a reference, the total broadcast fee for the next 50 years, if not increased, will exceed 70 billion euros for the entire 50 years. That is to say, according to this simplest and crude calculation method, CVC's 2.7 billion euros will be exchanged for 7 billion euros. Obviously, this is a steady and profitable business. What's more, if the factors of the increase in broadcast fees are taken into account, the benefits are naturally more lucrative.
Looking at this broadcast income statement, we can understand the choice of Real Madrid and Barca
Real Madrid Barca's reasons for opposition are equally simple, according to the current distribution of broadcast rights, also based on the 2018-19 season, the two clubs have earned more than 320 million euros, and 10% in 50 years has become 1.6 billion euros. That is, to accept this project, they suffer the most. Also in the business of business, it is not difficult to understand why they are not willing to agree from the beginning to the present.
It is reported that even Messi's departure may be related to the project. If Barca accepts the project, its salary cap could be 40 million euros more, so it is only natural that Messi can be left behind. However, the Barça club was not moved, and the Baria League chose "you do not move and I will not move", did not "open a side" to Barca, and finally had to watch Messi go to The Greater Paris. If this "grudge" is true, it is even more difficult to understand Barca's opposition.
Why La Liga insists on promoting this project, some analysts say that this is because the economic environment of football in Spain has reached the point where it must be solved, if there is no money in, many clubs may collapse, and the league and the league will naturally be unable to talk. Of course, there are also analyses that La Liga's "obstinate willfulness" is a new form of "football corruption" that is not unusual in world football, sacrificing the long-term interests of the club and ensuring the personal interests of the relevant responsible persons of the league. What the truth is, no one can say for sure now. Similarly, whether this cooperation is "a last resort" or "emergency medical treatment" in La Liga is also a big question mark.
La Liga president Tebas's motives are suspicious
It should be noted that before the project with La Liga, CVC had a similar cooperation with Serie A, and it was only 1.7 billion euros. However, in the final voting stage, due to the insufficient number of clubs in favor, it was finally declared a failure.
CVC Capital, is it a "savior" or a "blood sucker"?
We don't know how the struggle between Real Madrid and Barca and La Liga will end. However, the impact of CVC on the world sports world in recent years has not failed to attract high attention.
Looking at the history of CVC (full name CVC Capital Partners), we can find that its predecessor was a venture capital department of Citibank in the United States, which was launched as early as 1968. However, since 1993, it has had no relationship with Citibank and has become an independent investment institution based in Luxembourg. CVC has become one of the world's largest private equity funds, with $162.7 billion in assets under management. In short, it is a "capital predator".
Real Madrid and Barcelona have come together for the common good
CVC's investment in sports first began in 1998, when they acquired a stake in the World Motorcycle Championships. What impressed people most in the sports world was the stake in FI. In 2006, CVC became the largest shareholder of F1 with a 35.5% stake for £1.4 billion, and has since begun to manage and operate F1's bad tracks – on the one hand, CVC insisted on bringing F1 races around the world, increasing the operating costs of the team; on the other hand, CVC Xu Giants team with high appearance fees, and at the same time squeezed small and medium-sized teams. At the same time, CVC also insisted on changing the live broadcast of F1 matches from free channels to paid channels, thereby reaping greater benefits from them. As a result, F1's international audience fell by more than 1/3 in the 8 years from 2008 to 2016. In the face of such a situation, CVC is not impatient, and in 2017, it transferred its shares at a high price of $8 billion and successfully withdrew. The decade in which CVC invested in F1 squeezed almost all of the sport's commercial value, making it hard for today's operators to fill the pits of the past.
CVC, which successfully obtained a 351% return on F1 investment, now has a more "love" for sports, not only taking 27% of the equity of the English Rugby Premier League and 1/7 of the equity of the Six Nations League of European Rugby, but also successfully joining hands with the FIVB at the beginning of this year to launch the "Volleyball World" company, which will eat all the rights and interests of world volleyball's event operation, commercial development, market dissemination and so on. In the future, the fate of volleyball can be said to be firmly tied to this capital. Of course, whether this cooperation brings misfortune or blessing to the relevant institutions, at least for the time being, cannot be said clearly.
Is the background of capital "black"?
For CVC, as a private equity fund, the purpose of all its investments and cooperation is obviously to pursue profits. In business, there's nothing to question about. However, for relevant sports organizations or leagues, the development or promotion of related sports or projects is their main responsibility, and they must not carry out simple cooperation or development according to the so-called market logic, otherwise after the capital completes the "nugget task" and leaves, how to face a wolf trail has become a realistic problem. Capital's money, it seems to be very easy to use, as soon as the contract is signed, the money will immediately hit your account, but the capital's money is never easy to use, because capitalists have never been philanthropists, and capital has always been a "predator" with a big mouth. Capital money is really not something you can take casually...