Madrid, Barça and Athletic defend that their financing plan is less expensive

Real Madrid, Barcelona and Athletic have sent a letter signed by their presidents, Florentino Pérez, Joan Laporta and Aitor Elizegi, to the rest of the professional clubs of the First and Second Division presenting an alternative financing proposal to the one promoted by LaLiga (this one, from CVC, called Proyecto Impulso). In the letter, to which AS, Madrid, Barcelona and Athletic have had access present another possibility, “Sustainable Project”, in which they outline a very different scenario while maintaining that it is much less burdensome for the coffers of the clubs. Javier Tebas, president of LaLiga, has already disqualified this alternative plan.

According to the signatories of the document, Sustainable Project allows First and Second Division entities to access the same capital offered by CVC, around 2,000 million euros, without having to sell 10% of their audiovisual rights for the next 50 years. Through an agreement reached with financial entities such as JP Morgan, Bank of America and HSBC, the professional clubs would obtain these 2,000 million of financing at a stroke, and not in four installments, as CVC proposes, to be returned in 25 years, which would mean an interest payment of about 900 million euros. In the base scenario presented by CVC at the time, says the letter sent to all the clubs by Real Madrid, Barcelona and Athletic, the cost of financing those 2,000 million stands at 13,100 million.

“We are convinced that Spanish football needs a rational and sustainable financial solution that allows us all to regain normalcy and face the future with optimism. And in this letter we propose what we consider to be the best solution ”, say the presidents of Real Madrid, Barcelona and Athletic, the only ones who still belong to their partners (some 300,000 in total) in the letter sent. “CVC cannot be considered a strategic partner of Spanish football either, but, as everyone knows, a financial investor (…). CVC managers publicly announced their intention to dissociate themselves from the La Liga Impulso Project within a maximum period of ‘8 to 10 years’ and transfer their position to another investor – and this despite the fact that the mortgage on the clubs would remain in force for 50 years ”, they explain.

Real Madrid, Barcelona and Athletic were directly opposed to the Impulse Project presented by LaLiga, which will be voted on in the Assembly in the near future. “We have privileged access to very reasonable sources of financing in global financial markets, under much more attractive conditions than those offered by venture capital funds. It would be irresponsible for us not to explore the viability of rational and sustainable alternatives before making any irreparable decisions ”, say the three promoter clubs of Sustainable Project. “We are in a position to present to Spanish football an alternative financial solution for all, in the long term, sustainable, rational and legal.”

The keys.

The proposed structure in Sustainable Project consists of the annual payment of an annual fixed amount of 115 million euros for 25 years by the clubs, charged exclusively to their income from LaLiga audiovisual rights, in exchange for receiving 1,994 million euros in one go. “Each club will receive in a single payment a figure identical to the one that LaLiga would provide as a participatory loan within the framework of the LaLiga Impulso Project,” they say. In practice, while in the LaLiga proposal the clubs sell 10% of their image rights for the next 50 years, the Sustainable Project of Real Madrid, Barcelona and Athletic It is a kind of loan (with some exceptions, such as a fund of 60 million euros that must be contributed) for 25 years and an interest that ranges between 2.5% and 3%.

In Sustainable Project the financing would be obtained in a single payment, while in CVC it ​​is projected in deliveries to four years. “The clubs will be able to continue developing the business plan proposed by LaLiga without the need to render accounts to an external investor or grant them any participation in the government of the competition’s activities,” explain Madrid, Barça and Athletic. Those 1,994 million financing would be distributed among the clubs based on the average money received for their television rights in the last five years.

In the letter sent by Real Madrid, Barcelona and Athletic to the rest of the First and Second Clubs, the economic differences between one proposal and another according to three future scenarios are reported in an annex. According to this study, in the base scenario that the growth of television rights for Spanish football continues as it has been up to now, CVC would pocket 13,124 million in 50 years for contributing that capital of 1,994 million to the clubs. In the best possible scenario, if television revenues grew at 10% per year (in those 50 years), CVC would pocket 167,758 million euros for the 1,994 contributed. And in the worst case scenario, without any growth, CVC would obtain 3.789 million (according to the study provided). However, the scenario that LaLiga rights lose value does not arise. In the proposal of Real Madrid, Barcelona and Athletic, say the promoters of the idea, the banks that are willing to provide the financing (JP Morgan, Bank of America and HSBC) would obtain 881 million profit for the 1,994 of capital contributed.

(You can read the full letter sent in this link).

Javier Tebas steps out.

The LaLiga president was the first to speak out against this new plan presented by Real Madrid, Barcelona and Athletic when its content was known last Thursday. He did it through social networks, with a message accompanied by several emoticons emulating Pinocchio: “The CVC operation is an investment operation with an industrial partner, not a financing one, FP knows this (Abertis / CVC). Now FP” remembers “the LaLiga clubs (those with the uninteresting matches) and that it was ignorant when I was preparing the SUPERLEAGUE “.

Thebes, went further: “It turns out that it is Anas Laghrari (CEO of Key Capital and the Superliga disaster) that FP sends to make a proposal with such ignorance of the legal and financial situation of LaLiga clubs that it is INVIABLE. They look for confusion and they continue managing from the bar of the bar “.