RFEF questions legality of CVC’s €2bn stake in LaLiga as clubs prepare to vote

By Paul Nicholson

December 9 – Two days before LaLiga’s clubs are scheduled to vote on the Impulso Project which will see CVC inject almost €2 billion into the league, the Spanish FA (RFEF) and its president Luis Rubiales have issued a statement against the fund raising and questioning its legality under Spanish law.

“As we have been pointing out since last August, we reiterate our deepest opposition to the La Liga Impulso Project. It is presented in terms that are incompatible with our legal system and we trust that the competent Spanish authorities will not allow its execution,” said the statement.

The RFEF believes that handing over a stake in the league to a private equity firm potentially compromises the sporting integrity of the league and could lead to decision making that would not be in the interests of the whole of Spanish club football.

“From the RFEF we have the obligation to ensure that the governance regime of Spanish sports law is preserved. Said regime is incompatible with the entry into management and the taking of economic participation in La Liga by no third party, and much less by a private venture capital fund,” said the statement.

The RFEF also argues that by concentrating the finance into the clubs in the top two leagues, clubs in lower leagues will be left even further behind, essentially creating a closed-league system delineated by financial inequity. The financial boost to the clubs receiving the new finance will effectively insulate them from the rest by giving them an unfair financial advantage.

“LaLiga can only belong, and can only be managed, by the clubs that play in the First and Second Divisions at all times, without damaging in any way the legitimate expectations of lower-level clubs,” said the statement.

The RFEF said: “Therefore, we are obliged to make ourselves available to clubs that do not want to link the destination of the competition to venture capital funds for, from the RFEF , to help build solutions that are compatible with our legal system and preserve the traditional values ​​of Spanish football.”

Barcelona, Real Madrid and Athletic Club have all criticised Project Impulso and said that they would not be taking part, believing that there are other alternative financial solutions.

They have come up with a proposal for a €2 billion loan from JP Morgan, Bank of America and HSBC, who would jointly lend clubs at a 2.5-3% interest rate over 25 years. They say this is better than having to give up an ownership percentage of LaLiga’s commercial rights.

The clubs that have agreed to be part of Project Impluso will have financial controls over the money they receive, having to allocate 70% of fund to infrastructure development and technological innovation. Only 15% can be used for buying players and 15% for the restructuring of financial debt.

LaLiga said 90% of the capital invested by CVC will go to the clubs, saying that the new money “not only shields the economic viability of all Spanish football clubs, but also opens a new present and future for them by allowing them to advance in their development and transformation by a decade.”

Javier Tebas, president of LaLiga, said: “We are convinced that Boost LaLiga is the answer to the challenges we have to face in the medium and long term. It is a strategic agreement that will provide our clubs with greater capacity, will transform their management model and boost the appeal of our competition. It is the boost we need to turn LaLiga into a global digital entertainment company that has the most attractive football competition in the world.”

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