LaLiga and CVC leave open the possibility that the clubs that have not adhered to their Impulso project, and that have even resorted to legal proceedings for its annulment, join it through bilateral agreements. The main objective is none other than to attract the two main economic engines of the beautiful game in Spain, Real Madrid and FC Barcelona, which together with Athletic Club and Ibiza voted against the plan. In addition, the first three took legal action considering it an “illegal” transaction.
This is reflected in writing in the prospectus of the bond issue, for 850 million euros, that the British fund has launched to finance the injection of 2,000 million euros into Spanish professional football, which began in February with the delivery of the first funds. In the document they not only open the door to bilateral agreements between the fractious clubs, but even to changes in the original agreement.
“Both the sender [CVC] and LaLiga may, in the future, contemplate amendments to the investment documents or, alternatively, separate agreements to allow non-participating teams, or new clubs, to participate in the Impluso Plan on economic bases similar to those of the rest”, says the brochure. For this, the document clarifies that they must have the acquiescence of the management bodies of LaLiga.
This details that they can join “at any time” and that LaLiga and CVC “encourage” them to do so. In the last times, the FC Barcelona has recognized conversations with CVC, although, at the moment, they have not crystallized. In the event that one of these teams reaches a bilateral agreement, this should be endorsed by the LaLiga bodies.
The brochure itself makes clear the relevance, even dependence, that Real Madrid and Barcelona have in the generation of audiovisual rights. This is the main driver of the agreement, since CVC will receive from them an average of 8.2% per year for 50 years, although it has already warned that, as usual in its investments, it contemplates an exit in the medium term.
“LaLiga’s business and the value of its audiovisual rights depend on its most successful teams,” the brochure says. “Two of them, Real Madrid and Barcelona, own two-thirds of all the leagues, and they are the only ones to have won the Champions League.” Their followers on social networks and their presence among the 50 most valuable sports clubs in the world also stand out. “Their success on and off the pitch makes LaLiga’s business and the value of the rights particularly dependent on them.”
Therefore, among the risk factors for investment in LaLiga, CVC includes “that Madrid and Barcelona enter a period of financial or sports crisis, or decide to limit or end their participation in competitions. This would have a material adverse impact on LaLiga’s business, its financial situation, and the value of the rights.” In fact, if Madrid and Barcelona do not play the Spanish league, or if the European competitions happen to be played on the weekend, CVC reserves the right to cancel or renegotiate the agreement.
Also, although without mentioning these clubs, he mentions that the presence of stars “generates more interest.” “If the teams are not able to attract or keep stars, or there is a lack of competitiveness between the teams, whether due to their inability to attract talent or any other reason, it could negatively impact the audience that LaLiga can attract or the subscribers of audiovisual partners.