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Something is rotten in La Liga


Eton Blue at the Chelsea Megastore

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So, Barcelona is screwed. La Liga told them they will not be given any concessions and they will need to abide by the salary cap rules just like everyone else. Messi is now gone, and Barcelona look like they're internally crumbling. 

If you've been paying attention to the news, you'd be forgiven for thinking that the above makes no sense, and that Messi/Barcelona are throwing a strop. Didn't La Liga just sign a €2.7bn contract just cash injection with some investor? Didn't the league generously offer €250m for Barcelona this season, effectively ending their wage cap concerns?

As it turns out, Real Madrid are also mighty pissed at the developments in La Liga. 

What would possibly cause the two biggest clubs in Spain to be angry at a €500m cash injection?

Madrid's statement

 

"The negotiation was carried out without competitive proceedings and the financial conditions agreed with CVC Capital Partners give them annual returns of over 20%. This opportunistic fund is the same which tried and failed to reach similar agreements with the Italian and German leagues.

"Real Madrid cannot support a venture which hands the future of 42 Primera and Segunda División clubs over to a group of investors, not to mention the futures of those clubs who qualify over the next 50 years.

Barcelona joins in

 

FC Barcelona considers that the operation that has been made public has not been sufficiently verified with the clubs [owners of the TV rights]; that its amount is not congruent with the years of duration and that part of the audiovisual rights of all the clubs are affected for the next 50 years.

"The Club considers the signing of a half-century contract inappropriate given the uncertainties that always surround the world of football.

"The conditions of the contract that LaLiga is talking about condemn the future of FC Barcelona in terms of audiovisual rights.

"FC Barcelona wants to show its surprise at an agreement promoted by Laliga in which it has not had the criteria of teams, like FC Barcelona itself, and does not even show options among more competitors to be able to evaluate the advantages and disadvantages in a scenario with many questions such as the post-pandemic."

The money raised from the sale will be distributed among the clubs in the form of a loan, repayable over a significant number of years. The payments will be based on the contributions the clubs have had since the centralisation of audiovisual rights in 2015, with Madrid allocated around €261 million and Barca €270m.

What's happened, and why has everyone got their knickers in a bunch?

La Liga has apparently signed a deal with a  private investment fund (CVC Capital Partners) - for 50 years. In return for a cash injection of €2.7bn, distributed to the clubs according to their market share of TV rights, CVC Capital have a stake in the management of the league and will receive 11% of their total TV rights money for the next 40 years. List of issues include:

  • There was no tender or competitive process: CVC had similar offers rejected out of hand by Serie A and Bundesliga
  • The "cash injection" is actually just a loan, and clubs cannot renegotiate the interest or payment terms
  • There was no consultation with the clubs before the deal was signed
  • A private equity firm has a stake in the league's management; private equity firms generally try to snap up undervalued assets and make them more profitable, and this means changes, restructuring and a gearing towards profitability

La Liga are saying the deal is necessary to make the league commerically competitive with the EPL. The top clubs can't see the benefit and are just stopping short of calling the situation corrupt.

Right or wrong, I can't see this ending well for La Liga, and I think this is just more fuel in the tank for Super League 2.0.

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Well, this is awkward!

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