Goodbye Messi: What is the agreement between La Liga and CVC about?

An Agreement Between La Liga de España And An Investment Fund Turned Out To Be the Dealbreaker Between the Footballer And Barça.

Lionel Messi wearing the FC Barcelona shirt

Both the club and the player had the intention of renewing the mutual contract and that Lio continue to wear the azugrana colors. Photo: Flickr-L.F.Salas

LatiAmerican Post | Christopher Ramírez Hernández

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Leer en español: Adiós Messi: ¿De qué se trata el acuerdo entre La Liga y CVC?

On August 5, the world of football received one of the most shocking news of the last two decades: Lionel Messi would stop being a footballer for FC Barcelona. After 20 years of history with the Blaugrana club, the footballer born in Rosario, Argentina, had to say "goodbye", even without him or the club wanting it.

Both the club and the player had the intention of renewing the mutual contract. However, as reported by the club , the contract could not be formalized "due to economic and structural obstacles (Spanish La Liga regulations)".

Financial Fair Play

In Spain there is a law called the sports staff cost limit, better known in the world of football as financial fair play:

“This staff cost limit is the maximum amount that each club (…) can consume during the season (…) and that includes spending on players, first coach, second coach and physical trainer of the first team (inscribable squad). This limit also includes spending on affiliates, quarry and other sections (non-registrable staff) ”, explains La Liga through a document published on its official website.

In short, financial fair play is nothing more than the maximum limit of money that can be spent by each of the competing teams in La Liga (both Spanish A and B), including, of course, the salary of its players.

Here is the problem that got Messi out of Barcelona: there was no way to pay his salary without crossing the cost limit imposed by La Liga on the team.

Agreement with CVC

Until the last moment, there was a slight hope that Barcelona could retain the six-time Ballon d'Or winner ; although it was an option that Joan Laporta, president of Barcelona, would not be willing to take.

On August 4, La Liga notified, through an official statement, "a strategic agreement with the international investment fund CVC to inject 2,700 million euros into the competition and the clubs."

“The 2,700 million euros that CVC will contribute will be directly concentrated 90% in the clubs, including also women's football, semi-professional and non-professional football from the hand of the Royal Spanish Football Federation and the Higher Sports Council ( more than 100 million euros). ” the statement says. 

Of course, the news on August 5 was that in case of negotiation, Barça could increase its salary limit against La Liga enough to be able to cover Messi's salary and thus be able to renew his contract. So why is Laporta against this deal?

La Liga has stated in its statement that the partnership with CVC resides in the delivery of 2,667.5 million euros by the investment fund, for "approximately 10% of the capital" of the sports entity; a negotiation that will be governed by "a long-term agreement" between both parties.

Also read: The Best Moments of Lionel Messi at FC Barcelona

According to the information that the clubs have known, the "long term" that La Liga talks about is not 5 or 10 years, but 50. In other words, for half a century CVC will bill at least 10% of the net money from La Liga, which includes, of course, television earnings, the most important income of Spanish teams.

Although the organization has stated that "its sporting and organizational and management competitions for the commercialization of audiovisual rights will remain intact in this new society," the truth is that, although CVC does not take a role in the administration of these items, Yes, they will have the right to receive money from the profits that these activities generate.

“To comply with the fair-play of La Liga, we had to accept an agreement that mortgaged the club's television rights for 50 years (…) FC Barcelona is above everything. Of players, the best player in the world, the President and everyone ”, was Laporta's explanation of why he preferred to let Messi go rather than support the business between La Liga and CVC.

The same was said by Real Madrid, a team that did not hesitate to show its rejection by means of a public letter, in which it called this business a "deceptive structure" with which the 42 soccer teams that make up the group would be negatively impacted. 

"This agreement, using a deceptive structure, expropriates from the clubs 10.95% of their audiovisual rights for 50 years and against the law," added the 'merengue' club.

Finally, in Spain, the way in which the money would reach the clubs has also been criticized, because, unlike what was believed, the economic injection will be made in the form of a loan that will have to be reimbursed.

In this way, while La Liga ensures that the injection of 2,700 million euros will add value to the competition of around 24,250 billion euros, for large teams the deal will only benefit CVC.

According to a report by Real Madrid, the investment fund would not lose a single euro, even if the “End of the World” came: even with a loss of at least 72% of the current value of La Liga, CVC could recover its investment in 2071, the year in which the business would end. However, for Barcelona and Real Madrid, "the future of 42 First and Second Division clubs and the future of the clubs that qualified during these 50 years" could be at risk with the "mortgage" of television rights in Spain .

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