La Liga’s €2.7billion investment deal explained as Real Madrid launch legal action

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La Liga is awash with controversy currently amid the departure of Lionel Messi and the CVC investment deal that both Barcelona and Real Madrid have rejected.

The deal was announced last week by La Liga after being approved by an executive board, but ahead of the final vote between member clubs, La Liga’s two biggest clubs are attempting to derail the deal.

So, what on earth is going on?

Here we explain the situation, which is largely complicated due to two clubs’ pursuit of a lost dream of a Super League.

The situation

La Liga announced last week that it has agreed a €2.7billion deal with investment firm CVC for 10% of the company.

An executive board, which included members from the majority of Spain’s top clubs – minus Barcelona and Real Madrid – approved the deal prior to it being announced.

The deal remained subject to full approval, which will see all clubs in the top two tiers vote with an equal vote.

That vote is set to take place on Thursday, and it will, of course, include Barcelona and Real Madrid.

What do clubs get from it?

All La Liga clubs would receive a significant cash sum as a result of the deal, though the payments will be based on television rights, meaning Barcelona will earn the most, followed by Real Madrid and so on.

The money is principally to be spent on infrastructure, including facilities and so on, but 15% can be spent on transfer and new contracts.

Joan Laporta

This was significant in the Lionel Messi saga because Barcelona would have received around €270m, around €40m of which could have been dedicated towards new contracts.

Had Barcelona accepted the deal, by president Joan Laporta’s own admission, it is very likely they could have kept Messi.

Why didn’t Barcelona take the deal?

This is where things get controversial.

The official line is that Barcelona did not take the deal because it would have meant ‘mortgaging’ their TV rights for the next 50 years, which is the term of the deal.

What they mean by that is that CVC will get 10% of all profits from La Liga, meaning 10% of Barcelona’s TV rights, which are one of their most valuable assets, would be taken off the top each year.

But in reality, this has much more to do with the Super League plans.

How do we know? Well, the Super League had a very similar deal in place with its proposed investor which would have meant Barcelona also lost around 10% of its TV profits, and they seemed all too happy to sign up to that deal.

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Reports are already emerging in Spain that Florentino Perez was involved in discussions with Barcelona to make sure they rejected the CVC deal which, would all-but put an end to his already ill-fated Super League plans.

Barca chief Laporta was told about the CVC plans back in July and he was ‘enthusiastic’ given the deal would help the club keep Messi, according to La Liga president Javier Tebas.

But something changed since then, and that something feels as though it’s more like ‘someone’, with Perez clearly having an influence.

Laporta mentioned Real Madrid during his press conference and the legal action Los Blancos were going to take, despite the fact the capital club hadn’t even announced such action.

Talks had clearly been held between the two clubs.

Can Barca or Real Madrid stop it?

As things stand, no.

In the current circumstances, if the majority of clubs approve the deal on Thursday, and that is looking very likely given clubs need money following the pandemic, Barcelona and Real Madrid will be forced to take the deal.

The only way that can change is if Real Madrid are successful in their legal action against la Liga chief Tebas and the league.

It was announced today that Real Madrid had taken criminal and civil legal action against Tebas for negotiating a deal without the involvement of the Santiago Bernabeu club, as well as starting legal action to cancel the deal.

Florentino Perez

Now, the details of that case will be important, but on the face of it, Tebas’ role as La Liga president allows him to negotiate TV rights on behalf of the league’s clubs.

That’s not to say Real Madrid’s case has no value, they will have had top-class lawyers look into this, but the general consensus is that this is a ploy from Real Madrid to delay the CVC investment.

Meanwhile, many La Liga clubs who need money may be forced to wait despite the majority of clubs agreeing that it is a fair agreement and one that the league should take.

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