CVC Capital Partners savior of French football, at what cost?

CVC Capital Partners savior of French football, at what cost?

The crisis forced the small world of hexagonal football to change eras. The Professional Football League (LFP) finalized on Friday 1er April, an agreement by which it brings a heavyweight in finance, the Luxembourg fund CVC Capital Partners, up to 13% in the capital of a commercial company that it will create.

This agreement will have an immediate translation: a contribution of 1.5 billion euros, the bulk of which (1.1 billion) will go to the twenty clubs of Ligue 1, heavily indebted following the bankruptcy of the broadcaster Mediapro, to the end of 2020, then the health crisis (stopping of competitions in the spring of 2020, stadiums behind closed doors the following season, etc.).

In the medium term, the declared objective of the partnership is to better promote audiovisual rights (the LFP hopes to multiply its revenues by 2.3 in the next eight years, to reach 1.8 billion euros), in particular at abroad and in digital.

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If, in this agreement, referred to as“historical” by Vincent Labrune, the president of the LFP, the interest for the clubs is identified, nothing has filtered on what CVC Capital Partners will benefit from. Nothing is said about the commercial company’s dividend payment policy, or about the existence of conditions precedent. The fund declined to answer questions from the World.

“The sports rights market is buoyant in the long term”

With 165 billion dollars committed (149.3 billion euros), CVC Capital Partners is one of the ten largest investment funds in the world, and the most active in sport. Rather than investing, like other of its counterparts, in club takeovers, its strategy is to enter into competition organization structures.

“It is less risky for CVC to invest in a league for example, because the sporting hazard does not exist: there is no risk of relegation to a lower division. For him, sport represents an interesting diversification, because the sports rights market is buoyant in the long term.explains Adrien Dumas, manager of the Mandarine Global Sport fund (Mandarine Gestion).

The Luxembourg fund thus took its first steps in sport in 2006 by spending 1 billion dollars to take the majority of the capital of the company managing the commercial rights of Formula 1. It sold its stake six years later for 5 billion of dollars.

CVC Capital Partners then took an interest in rugby, buying 30% of the Premiership (English championship) and 28% of the Pro 14 (competition bringing together Welsh, Irish and Scottish teams). In 2021, he injected more than 400 million euros to take 14.3% of the commercial company of the Six Nations Tournament.

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