French Ligue 1 Clubs approve €1.5bn CVC Investment. French football clubs agree to the distribution of funds from private equity firms. Clubs in French top-flight Ligue 1 have agreed to the Professional Football League’s (LFP) investment deal with private equity firm CVC Capital Partners.
Key takeaways:
- CVC has been in exclusive talks with LFP overtaking a 13% stake worth €1.5bn in a new commercial company
- LFP to reportedly receive initial €600m this summer, with PSG taking the biggest cut
Earlier this month, it was confirmed the Luxembourg-based CVC took a 13% stake worth €1.5 billion ($1.6 billion) in the organization’s new commercial company. It will handle the selling of broadcast rights for Ligue 1.
According to LFP, the deal would value the French football commercial arm at €11.5 billion ($12.6 billion). Clubs in the second-tier Ligue 2 have also agreed to the investment.
CVC saw off competition from the likes of Hellman & Friedman, Oaktree Capital, and Silver Lake for the stake. CVC’s sports investment portfolio also includes rugby union, cricket, and volleyball.
Distribution of Funds
LFP will receive an initial €600 million (US$658 million) this July. Paris Saint-Germain, France’s biggest club, will reportedly take €200 million ($219 million) of the €1.5 billion investment. Initially wanted about 30% of the total.
Olympique de Marseille and Olympique Lyonnais will purportedly pocket €90 million ($98.6 million) apiece. Meanwhile, OGC Nice, Stade Rennais, AS Monaco and Lille OSC will get €80 million ($87.7 million) each.
The remaining Ligue 1 clubs will reportedly be paid €33 million ($36.2 million) each. Of this amount, €16.5 million will arrive this July and the remaining half will be received in June 2023.
According to reports, these payments will be made over 3 years. The first amount will be 40 percent of the total, followed by consecutive 30 percent installments over the next two seasons.
The LFP will also reportedly immediately reimburse a €170 million ($186.3 million) state loan it took during the height of the Covid-19 pandemic. In addition, the organization will place €100 million ($109.6 million) in a reserve fund and a further €100 million will be used for operating costs for the new commercial company.
The deal is expected to be formally signed off at an LFP general assembly on 1st April.