Equity firm CVC to buy 10% of Spain’s top soccer league LaLiga for $3B

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aLiga, Spain’s top soccer league, confirmed Wednesday that it has reached an agreement in principle with private equity firm CVC Capital Partners, selling 10% of its business for 2.7 billion euros (about $3 billion).

CVC is the majority owner of Tipico, a German sports betting group that has reportedly become the latest bidder to take over William Hill’s operations in Europe and the UK.

LaLiga has been working on the operation for a year now and awaits approval from the league’s clubs. The billionaire injection could help cash-strapped teams including big names FC Barcelona and Real Madrid CF.

The agreement determines LaLiga will not be selling any of its rights, retaining total control over the selling arrangements for its broadcast contracts and sporting regulations. LaLiga said in a statement on Wednesday that it would place all the assets related to the deal in a new company in which CVC will be a 10% partner. The private equity firm will run the risk associated with any business deal.

“It is an ambitious investment plan that will provide LaLiga and the clubs with resources with the aim of continuing the transformation towards a global digital entertainment company, strengthening the competition and transforming the experience of the fans,” described LaLiga in their statement. “The technological capabilities of the LaLiga and the clubs’ ecosystem will also be strengthened, offering new content, new channels and new markets.”

It has been revealed that out of the total figures, 15% can be put straight to use to reinforce squads and to sign players, while about 70% will go to structural improvements at stadiums and facilities.

As part of a consortium, CVC also entered talks last year to buy a stake in the media business of Italy’s top soccer league, which ended up felling through due to rejection from some clubs.

There is a potential risk that this could also happen in Spain, as LaLiga needs to secure support of a majority of its 24 affiliated clubs at a general meeting in order to complete the transaction. It has been disclosed that both representatives of the league and CVC have been meeting with club officials to obtain their backing before the final vote.

If supported by the clubs, the joint venture would be the first of its type by a major European league.

This is not the only deal carried out by LaLiga in 2021. Earlier this year, an expanded partnership with Microsoft Corp was reached in a bid to boost revenue in the context severe economic losses for Spanish clubs due to Covid-19.

On the other hand, CVC has sealed numerous deals in rugby over the past year, including an agreement to pay 365 million pounds (about $500 million) for a share of the Six Nations Championship, Europe’s top national team rugby competition.

CVC’s soccer investments would mark their biggest in sports since its exit from the Formula 1 car racing series in 2017.