Letter from Madrid, Barcelona and Athletic to the rest of the LaLiga clubs against CVC

The entire letter

Dear clubs,

First of all, we would like to reiterate that we are fully aware of the financial difficulties that the Spanish football sector is going through. The Covid pandemic impacted our activity dramatically, forcing us to close stadiums and suffer an unprecedented reduction in our income, from which we have not yet recovered. For this reason, we are convinced that Spanish football needs a rational and sustainable financial solution that allows us all to regain normalcy and face the future with optimism. And in this letter we propose what we consider to be the best solution.

First, we also want to remind you that our clubs, together with all of you, have tirelessly helped, since 1929, to build the history of La Liga, which today is one of the main sports competitions in the world. Our commitment to competition is unquestionable.

We must also remind you that our clubs maintain the historic associative structure, being therefore owned by their members -approximately 300,000-, all of them with the right to speak and vote. They are clubs whose ownership and management passes from generation to generation, which have never distributed any dividend or have any other economic vocation than to be able to provide their teams with the best possible resources to be competitive on the pitch.

From the perspective of our centennial commitment to Spanish football and its viability, it must be understood our deepest opposition last August to the operation raised by La Liga with the CVC venture capital fund, the so-called “La Liga Impulso Project” , now reformulated in terms equally ruinous for Spanish football and, furthermore, not without serious irregularities (both in form and in substance).

Now, at this precise moment in history, in which global financial markets offer unique opportunities to finance long-term projects in a sustainable way, we have a duty to oppose an operation such as the one proposed by La Liga with CVC that, in the economic level, it would weigh down the future of our football.

CVC cannot be considered a strategic partner of Spanish football either but, as everyone knows, a financial investor. Proof of this is that CVC, which has a small group of financial executives, intervenes in a wide variety of sectors of our economy such as the energy sector, textiles, food industry, telecommunications, restaurants and infrastructures, among others. Likewise, CVC managers publicly announced their intention to disengage from the La Liga Impulso Project within a maximum period of “8 to 10 years” and transfer their position to another investor – and this despite the fact that the mortgage on the clubs would remain in force for 50 years. They are not a strategic partner, they are a financial investor.

And, as a financial investor, his proposal to “promote” Spanish football consists, essentially, in seeking and hiring specialists in the field to help La Liga grow. It is obvious that the League can – and must – carry out the contracts that are necessary to maximize its growth potential, but it must do so with its own means, without giving up its independence, without losing full ownership of its business and without clubs mortgage their financial future.

On the other hand, we must not forget that Spanish clubs currently make up one of the most important sporting competitions in the world and, consequently, we have privileged access to very reasonable sources of financing in global financial markets, under much more attractive conditions than those offered. by venture capital funds. It would be irresponsible for us not to explore the feasibility of rational and sustainable alternatives before making any irreparable decisions.

Based on our very recent experience in financing operations in this sector, and after carrying out the appropriate preparatory work with our financial and legal advisers, we are in a position to present Spanish football with an alternative financial solution for all, in the long term, sustainable. , rational and legal, a “Sustainable Project”, which, at least, deserves to be duly explored:

-Sustainable Project would allow all La Liga and Primera RFEF clubs to access the same capital offered by CVC, assuming infinitely better costs and terms.

-Sustainable Project would allow structuring the operation with a real and total cost for the clubs of around 2.5% -3.0% per year and for a maximum period of 25 years.

-The comparison of Sustainable Project with the terms of the proposal promoted by La Liga with the CVC fund is simple:

-based on the data provided by La Liga in
“La Liga Impulso Project”, and always according to
terms of the so-called “base case”:

-the total financial cost of the La Liga Project
Impulse, which would be supported by the clubs
Spaniards for 50 years, would amount to 13,100
million euros, in exchange for an investment
total from CVC of 2 billion euros
(which, in addition, they would not pay the first day, but
fractional form for 4 years), and

-the total financial cost of the Sustainable Project,
that would be supported by Spanish clubs
over 25 years, it would amount to 900 million
euros, in exchange for a total investment by
of funders of 2 billion euros
(which, in addition, would be paid in full to the
clubs the first year, without any division);

Consequently, according to the “base case” presented by
La Liga and CVC, Sustainable Project would allow
save Spanish clubs 12.2 billion
euros, being a proposal 15 times cheaper
which, in addition, only includes commitments for 25 years, and
not for 50.

-Sustainable Project also ensures compliance with the applicable regulations and, in particular, Royal Decree-Law 5/2015, as it is structured directly by the clubs without the direct participation of La Liga. In this way:

-Direct ownership of the clubs is not violated
on audiovisual rights nor are the
rights of any third party;

-no accounting structures and concepts are used
with artificial ends (aspect on which the
proposal now raised by La Liga is even more
irregular, if possible, than the one that was presented -and
withdrawal- in August); and

-not conferred on any entity outside the world
of football any participation in the management and
governance of La Liga.

For a better understanding of the Sustainable Project terms, we attach as an Annex to this letter:

-the summary of the main terms of the
Sustainable Project TermSheet, document
prepared by our financial advisors, who
have had the help and indication of terms
preliminary by a group of entities
financial institutions of recognized prestige and experience in
similar operations (Section 1);

-a comparison of the economic impact of
Sustainable Project with respect to the operation
raised by La Liga and CVC, based on various
financial scenarios (and, in particular, of your
called “base case”) (Section 2); and

-the assessment of our legal services and
legal advisors to some of the main
irregularities of the La Liga Impulso Project,
also stating the reasons why
said irregularities would not apply to
our proposal (Section 3).

In conclusion, it is disconcerting that, since there are viable, reasonable and sustainable financial alternatives such as the one we present here, a competitive, open and transparent process has not been promoted from La Liga with the aim of maximizing financial conditions for all clubs. We are still in time for it.

We call for reflection to all actors and managers of Spanish football. It is essential to act with common sense and explore all the available alternatives (such as the Sustainable Project proposed here or any other structure that provides similar benefits), in order to allow clubs to solve their financial problems in a rational and sustainable way, without incurring in serious irregularities or weigh down the future of Spanish football for half a century.

We put at your disposal our experience and resources to, working together, carry out a Sustainable Project or any other operation that makes economic sense and respects the law to a successful conclusion.

A hug,

Aitor Elizegi Joan Laporta Florentino Pérez
Athletic Club FC Barcelona Real Madrid CF