MADRID (AP) – The Spanish league took a step towards world domination in the Premier League on Wednesday, securing â¬ 2.7 billion ($ 3.2 billion) in funding to bolster its clubs’ finances and increase revenue growth over the next few years.
The deal unanimously approved by the league’s executive committee is expected to increase clubs’ purchasing power and should help Barcelona secure a new contract for Lionel Messi, who has yet to officially say whether he will stay with him. the club.
Real Madrid, who have often been at odds with the league and have reportedly been against the deal, could also benefit by increasing their chances of signing Paris Saint-Germain star Kylian MbappÃ©, a long-time target of the club.
The strategic agreement with the international investment fund CVC Capital Partners, dubbed “Boost LaLiga”, still has to go through the general assembly of the league, when a majority of the clubs of the first and second divisions must give their final agreement.
“I think there might be a club or two that won’t agree with that, but it’s good for football in general,” Real Betis president Ãngel Haro told The Associated Press. âThe clubs would get a very relevant amount of money to help improve the teams and the infrastructure of the clubs in general. It makes the league stronger.
CVC once owned Formula 1 and recently bought a stake in the Six Nations rugby tournament. Under the deal with the Spanish league, the private equity firm would have a roughly 10% share of the league’s revenue and a 10% stake in a new business entity that values ââthe league at 24.2 billion euros ($ 28.7 billion).
The funding would allow the league to boost its growth and increase its global presence as it continues to try to catch up with the powerful Premier League, the richest football league in the world. He envisions the deal accelerating the competition’s development into a digital entertainment company.
“This ambitious investment plan will provide La Liga and the clubs with all the resources necessary to carry out its transformation strategy to become a leading global player in the digital entertainment market, while strengthening competition and transforming the ‘fan experience,’ the league said in a statement.
He said CVC would not have control over the management of the competition or the sale of its broadcast rights.
Clubs would receive 90% of the funds, 70% of which would go to long-term structural investments. Some of the money would also go towards paying odd debts and increasing their spending limits for players and coaches.
The amount each club would receive is based on the average audiovisual rights revenues they have earned over the past seven years since the league began selling the rights collectively.
The funds would be distributed over a three-year period, but are expected to immediately start helping clubs as they struggle amid the coronavirus pandemic.
âIt has been a very complex year for all clubs,â said Haro. “Obviously this will help reduce debt and improve club finances.”
Real Madrid and Barcelona were among the clubs with heavy losses due to the pandemic.
Barcelona are said to already have an agreement to extend Messi’s contract, but he struggled to fit his salary – even with cuts that would have been accepted by the player – into the league-controlled salary cap.
Madrid have also had to cut spending considerably and have recently failed to renew the contract of veteran captain Sergio Ramos, who has joined PSG. His chances of signing MbappÃ© would increase dramatically if the new funds became available.
Madrid and Barcelona have won the league 15 times in the past 17 seasons, with AtlÃ©tico Madrid having succeeded in 2014 and this year.
More football coverage: