Why are Real Madrid suing La Liga and CVC?

Paul Macdonald

Real Madrid and Barcelona are going to war with La Liga and its president Javier Tebas over the controversial CVC deal.

In essence Tebas, on behalf of the league, signed a €2.7 billion deal with CVC Capital partners, an investment fund, in exchange for a 10 per cent stake in its commercial rights.

It was seen as a way of raising money for beleaguered clubs who have been hit hard by the coronavirus pandemic, not least Barcelona and Real Madrid themselves.

But the terms of the deal have been questioned by the duo. Why?

1. Relinquishing audiovisual rights

Both clubs in statements stated their belief that the agreement would force all 42 clubs (including the Segunda Division) to relinquish 10% of their TV rights to CVC for a period of 50 years, a situation both sides find untenable.

Barcelona said: “FC Barcelona considers that the operation that has been made public has not been sufficiently verified with the clubs (owners of the TV rights).

“The amount is not consistent with the years of duration and that part of the audiovisual rights of all clubs for the next 50 years are affected.”

Javier Tebas, president of La Liga

Javier Tebas, president of La Liga

2. CVC capitalising on the vulnerability of the league

Other investment groups have reached out to both Ligue 1, Serie A and the Bundesliga in the past 15 months of this coronavirus crisis, offering to inject funds in exchange for a stake in the future of the business.

Cynics would say they are attempting to take advantage of a perilous situation within European football, and Real Madrid’s statement was to that effect, stating: “The negotiation has been done without a competitive process and the economic conditions agreed with the CVC fund give it returns of more than 20% per year.

“It is this same opportunistic fund that unsuccessfully tried similar deals with the Italian and German leagues.”

3. None of the clubs have signed it… yet

As both Real Madrid and Barcelona have stated, the agreement was neither put in front of the 42 member clubs nor even discussed before the announcement. They believe that this is in contravention of the law and are ready to take extreme measures to affect the outcome.

4. The end of the Super League?

Andrea Agnelli, mastermind of the Super League

Andrea Agnelli, mastermind of the Super League

The deal is also a transparent attempt on the part of Tebas to guarantee that Real Madrid, Barcelona and Atletico Madrid are tied to the league for the foreseeable future.

Such a long-term agreement and capital investment will also certainly include restrictions on any coups in the future, meaning that if a Super League plan were to re-emerge - indeed, both Real Madrid and Barcelona don’t even feel that the previous one has died yet - it would be virtually impossible to extricate themselves from the CVC deal.

All of that has led to Real Madrid announcing their desire to take legal action against Tebas and the league itself. They said in a statement on Tuesday:

“The Board of Directors of Real Madrid CF, meeting today at 11:00 a.m., has unanimously agreed to carry out both civil and criminal legal actions against the president of LaLiga, Mr. Javier Tebas Medrano, against Mr. Javier de Jaime Guijarro, responsible for the CVC Fund and against the CVC Capital Partners SICAV-FIS Fund itself.

“Likewise, the Board of Directors has also decided to carry out legal actions of all kinds that are deemed appropriate to annul and nullify the possible agreements adopted by the LaLiga Assembly, to be held on August 12, 2021, regarding the agreement between LaLiga and the CVC Fund.”

Whatever happens next, these moves are further damaging to the Liga brand, and its ramifications could stretch far further into the future.