Barcelona‘s bid to register Lionel Messi‘s new contract with LaLiga has been handed a boost after the league announced a cash injection of €2.7 billion ($3.2B) on Wednesday.
LaLiga has agreed in principle to sell 10% of a newly formed company housing most of its business to private equity firm CVC Capital Partners. The sale has already been approved by the league’s executive committee, which includes representatives from Atletico Madrid, Villarreal and Real Sociedad, among others.
The clubs must now vote in favour of the accord at a general assembly, which will take place as soon as feasible and in the coming weeks.
Approximately 90% of the funds will go to Spanish clubs, including women’s, semi-professional, and non-professional football. Although it is a long-term loan, a source claimed the clubs are “delighted” since it would help them get out of a financial quagmire caused by the coronavirus outbreak.
According to another source, depending on the process for accessing the cash, Barcelona and Real Madrid will each get over €250 million.
“It will be distributed according to the contributions that the clubs have had since the centralisation of audiovisual rights in 2015, a key moment in the promotion of LaLiga,” a league source said. “It does not take into account a specific moment, but the average situation of the clubs in the last seven years.”
However, according to a league source, the monetary infusion is intended to help the teams plan for the future, with the league requiring the clubs to agree to a strategy that focuses on improving their physical infrastructure and brands.
The teams must spend at least 70% of the money on long-term growth initiatives, 15% on debt refinancing, and 15% on exceeding their league-imposed spending restrictions.
Since the epidemic, Barca’s spending cap has plummeted, dropping from more than €600 million in 2019-20 to a projected €200 million for the following season. However, a league source stated that the limitations will be “slightly modified” in Wednesday’s agreement.
An agreement on a new contract with Messi, who has been a free agent since his last contract ended on June 30, is in place, but the announcement has been delayed because Barca cannot yet register the deal while adhering to LaLiga’s financial regulations.
They must also cut their salary cost in order to sign new recruits Sergio Aguero, Memphis Depay, Eric Garcia, and Emerson Royal for the upcoming season.
Barcelona aim to finalise Messi’s new contract before Sunday’s Joan Gamper Trophy match against Juventus, according to a source, and Thursday “may be a significant day.”
Real Madrid and the other of Spain’s top-flight teams will be grateful for the funds as they battle the ravages of the coronavirus outbreak and play matches behind closed doors.
The idea is dubbed ‘Boost LaLiga,’ and according to a league source, it will help the competition close the gap on the English Premier League over the next decade.
The partnership with CVC will result in the formation of a new company to which LaLiga will contribute all of its companies, subsidiaries, and joint ventures, with CVC holding a minority interest of roughly 10%.
Additionally, CVC provides funds to LaLiga through a participating account, a long-term agreement that aligns the interests of LaLiga, the clubs and CVC. In this new company, LaLiga will keep all of its sports responsibilities as well as the organisation and management of audiovisual rights sales.
“The transaction values LaLiga at €24.25bn, a price tag that acknowledges LaLiga’s leadership as one of the most prominent sports competitions in the world,” a statement from the league said.