Big divide in La Liga over 'mortgage deal' with investment company

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Barcelona, Aug 13 (IANS) Spanish football giants Real Madrid and FC Barcelona voting against an investment deal with capital investment company CVC Capital Partners worth 2.7 billion euros, could have huge ramifications for La Liga, which is already reeling under the impact of one of its greatest stars, Lionel Messi, joining top French side PSG.

A total of 38 top flight and second division La Liga clubs on Thursday voted to approve an investment deal with the capital investment company CVC Capital Partners but four clubs -- FC Barcelona, Real Madrid, Athletic Club Bilbao and Real Oviedo -- voted against.

As per the deal, clubs will receive a cash injection in the form of a long-term loan that has to be paid back over a 40-year period, with 15 per cent of that money able to be spent on wages and new signings and the rest on infrastructure, youth systems and women's teams.

In return, CVC Capital Partners will receive 11 per cent of income from all of La Liga's non-audiovisual-related business and 10 per cent of revenue from audiovisual business for the next 50 years.

Real Madrid, Barcelona, Athletic Club and Oviedo have all opted out of receiving any money from the scheme, with the three top-flight clubs all issuing statements which highlight their opposition to a deal that would "mortgage" them for 50 years.

In fact, Athletic Club point out that CVC would "recover their investment in 10 years, but the clubs will need 50 years. As well as mortgaging something that is ours... we would have to renounce income from audiovisual rights, which we currently have full capacity to manage."

FC Barcelona issued a statement early on Friday morning (IST), stating "FC Barcelona has participated in the Assembly of the Spanish Professional Football League (LFP) at which its agreement with CVC Central Partners, the investment fund that is to become an industry partner of La Liga, was presented and submitted to a vote.

"Note that Barca, as well as Real Madrid and Athletic Club, the three first division clubs that have not signed the agreement, defend their membership and assembly-based ownership systems, with boards of directors chosen by their members for limited mandates, reasons that support the inconvenience of accepting mortgages on their assets (such as in this case the transfer of their television rights) for the next half century, moreover considering the ongoing transformation and evolution of the football world."

Real Madrid have already decided to initiate civil and criminal legal action against the La Liga President, Mr Javier Tebas Medrano.

"The Real Madrid CF Board of Directors unanimously agreed to initiate both civil and criminal legal action against the La Liga President, Mr Javier Tebas Medrano, Mr Javier de Jaime Guijarro, head of the CVC Fund, and against the CVC Capital Partners SICAV-FIS Fund itself.

"In addition, the Board of Directors has resolved to take any legal action it considers appropriate to annul and render ineffective any possible resolutions adopted by the La Liga Assembly, in relation to the agreement between La Liga and the CVC Fund."

--IANS

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