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CVC says fan data is key to LaLiga clubs capitalising on €1.99bn investment deal

Private equity firm acquired 8.2% stake in Spanish soccer league’s media rights business via 2021 agreement.

16 February 2023 Josh Sim

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  • 38 clubs approved investment deal in December 2021
  • Clubs must spend 70% of funding on infrastructure projects

The media investment deal agreed between LaLiga and private equity firm CVC Capital Partners has already seen €915 million (US$976.9 million) distributed to the 38 Spanish soccer clubs who signed up.

LaLiga has confirmed that half of the investment, which is worth €1.99 billion (US$2.12 billion) in its entirety, was made available to teams earlier this week.

The funding comes after the league reached an agreement with CVC that was approved by 38 clubs in the country’s top two soccer divisions. The equity firm would gain an 8.2 per cent stake in a newly created company that will manage LaLiga’s media rights assets for the next 50 years.

With the funding now reaching the clubs, CVC says soccer clubs need to embrace innovation to ensure that they make good on the investment.

“The clubs need to be more ambitious,” said Juan Arbide, CVC senior managing director. “It is important that the clubs become more global and digital companies and understand the profile of their fans.

“The priority should be collecting fans’ data because it is the key for monetising the business around football for the long term.”

This marks the latest sports investment made by CVC, which has also agreed to buy a 13 per cent stake worth €1.5 billion (US$1.6 billion) in France’s Ligue 1 media rights business. At a presentation, CVC said the French top flight was “ten years behind LaLiga” as Ligue 1 is struggling to collect fan data, given no database was in existence before the deal.

LaLiga is expecting the teams to receive an extra €452.4 million (US$482.9 million) this year, with the remaining portion of €454 million (US$484.6 million) to be paid out in 2024. The deal allows Spanish clubs to spend 70 per cent of funding on infrastructure investments and modernisation projects, with the other 30 per cent split evenly between servicing debts and signing players.

The league revealed that 21 clubs has had their spending plans approved, with five outfits yet to provide proposals to the top-flight. LaLiga has set a deadline of June 2022 for teams to have their plans approved and has promised to help teams to invest their share of the money.

“It is understandable most of the money spent so far has been for debt and player signings because this is the easiest to provide documentation and to approve; it does not require further planning,” Marta Alonso, deputy director of corporate general management at LaLiga, said at a dedicated media presentatio.

LaLiga president Javier Tebas said that he expects an annual increase of 11 per cent in the competition’s TV rights revenue by 2027, which is when its current broadcast deals expire. The league and CVC hope clubs decide to improve their stadiums to bring more fans to matches and increase their social media following. Both parties also want teams to make greater investments in technology to collect fans’ data, so that LaLiga is in a stronger place to negotiate its next TV rights deals.

“In four years we will already notice an increase in revenues from game-day experience, ecommerce and TV rights,” Tebas added.

The Spanish top flight expects the media rights business’ total value to rise from €24.2 billion (US$25.8 billion) to between €33 billion (US$35.2 billion) and €35 billion (US$37.4 billion) in the next seven to ten years.

Four clubs opted to vote against the deal, including traditional powerhouses Barcelona and Real Madrid. They will therefore not receive any money from CVC, but instead have retained their full allocation of central media rights income. The duo, alongside Athletic Bilbao and the Spanish Football Federation (RREF) has promised legal action against the league due to disagreements concerning the deal’s terms.

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