In 2021 CVC Capital Partners pledged $2.2 billion to elevate both the first and second divisions of Spain’s soccer league, LaLiga. Almost two years into the partnership, the company wants to make sure it sees results on the balance sheet.
Executives from the 44 of the league’s 46 clubs and representatives of CVC spent a day at a sleepy seaside resort in Tarragona last week evaluating the progress of the LaLiga Impulso (LaLiga Boost), the joint investment project.
CVC’s goal is to convert LaLiga into a global entity while increasing the number of fans and strengthening its digital presence. With that in mind, CVC allocated the first $400 million installment last January with a designated breakdown of 70% for infrastructure, 15% for debt payment and 15% for players. According to the agreement, the clubs were to focus on short-term goals, including international outreach and digitalization.
“[Projects like] these take time,”Javier Tebas, the president of LaLiga, told Sportico in an exclusive interview. “And in the long run, these strategies will bring our clubs higher revenues.”
Four clubs opted out of the project, but using data collected from the 17 first-division teams that participated, CVC compiled a report based on KPI tracking. It concluded that while overall the project launch has been positive, there is still a lot to be done. It noted that while 60% of the clubs have made improvements to their infrastructure and marketing, only four improved their brand, according to CVC’s metrics, and less than half (eight) launched activations within their target market.
“Perhaps we painted a sad picture, but we have to put more emphasis on the business side,” Javier de Jaime, a managing partner at CVC, said at the presentation. “But we believe in LaLiga.”
They have a good reason for their faith. The league has accumulated 33 international titles compared to the EPL’s 13. “But EPL’s commercial revenues of $1.3 billion (€1.225 billion) are four times more than LaLiga’s $377 million (€353 million). We have to work on the business side to raise those revenues,” de Jaime said. (LaLiga giants Real Madrid CF and Barcelona FC were among the teams opting out, so their revenues are not included.)
The firm is also asking clubs to focus on building their brands nationally and internationally. “Manchester United did not win anything since 2012-13 season,” said Álvaro Sendagorta, another managing director who was at the presentation. “But they are among the top three clubs in the world regarding revenues. The brand is everything.”
CVC has a successful track record in sports investment, which is a relatively new category for it. The Luxemburg-based company invested in and exited Formula One and MotoGP Dorna and has minority stakes in a handful of sports properties, including Premiership Rugby, IPL’s Gujarat Titans, France’s Ligue 1, and Bruin Capital.
While F1’s success has been attributed to Liberty Media’s takeover, CVC helped initiate its growth in the U.S. market by giving broadcast rights to Paramount for free. When CVC exited its $2 billion investment a decade later, Formula One’s yearly events had increased from 13 to 21 and its revenues by 80%, according to the presentation company executives shared at the meeting.
In addition to the changes implemented through LaLiga Boost, LaLiga on Thursday announced that it would start producing a docu-series with Netflix, similar to Formula One’s Drive to Survive and Break Point, taking an inside look at everything that happens in the locker rooms and outside of the stadiums on a match day. The series, which will focus on the 2023-24 season, is in pre-production and will be launched worldwide on Netflix next year.