Press Review - April 2022

€1.5 billion agreement between French Football League (LFP) and private equity firm CVC

The LFP made official, on Friday April the 1st, the entry of CVC Capital Partners in the capital of the commercial subsidiary of the League, for €1.5 billion. The transaction is expected to take effect in July.

The Professional Football League will sell part of its commercial subsidiary to CVC Capital Partners for €1.5 billion. In a press release published this Friday, the LFP has made official the entry of this investment company up to 13% in the capital of its commercial subsidiary. After months of preparation, the creation of this subsidiary in charge of the audiovisual rights of French soccer. underlines that the LFP is expecting that this deal would value French football's commercial arm at €11.5 billion. According to L’Équipe, the LFP will receive an initial €600 million this July. Paris Saint-Germain, widely accepted as France’s biggest club, will reportedly take €200 million (US$219 million) of the €1.5 billion investment, having initially wanted about 30 per cent of the total. Olympique de Marseille and Olympique Lyonnais will purportedly pocket €90 million (US$98.6 million) apiece, while OGC Nice, Stade Rennais, AS Monaco and Lille OSC will get €80 million (US$87.7 million) each”, adds.

The other Ligue 1 clubs will be paid €33 million each. Of this amount, €16.5 million will arrive this July and the remaining half will be received in June 2023. The LFP will also reportedly immediately reimburse a €170 million state loan it took during the height of the Covid-19 pandemic. In addition, the organization will place €100 million in a reserve fund and a further €100 million will be used for operating costs for the new commercial company.

Sorare, official NFT fantasy game of MLS

Major League Soccer (MLS) has become the first sports organization in the US to partner with blockchain digital collectible and fantasy game specialist Sorare, where users will be able to collect, trade, and play with tokens representing all the players from the 29 clubs of the league.

MLS joins Sorare’s growing portfolio of soccer partners which include major leagues like Spain’s LaLiga and Germany’s Bundesliga, as well as historic clubs Liverpool, Bayern Munich, Paris Saint-Germain (PSG), and Juventus. “We’re excited to welcome Major League Soccer as our latest partner. Our global community of sports fans are eager to start collecting and playing with their favorite teams and players from the league. From collectors to first-time NFT buyers, our NFT x fantasy model uniquely engages fans with the sport they love in a way that goes beyond just spectating, and makes them feel truly connected to each team, player and game”, said Ryan Spoon, chief operating officer at Sorare.

Sorare, which has been valued at $4.3 billion last September after a US$680 million fund raising, has opened its first office in North America at the end of last year. With this first partnership with a major US sports league, its aim is to capitalize on MLS’s young and tech enthusiastic public before expanding into other sports.

At MLS, our emerging ventures team is always looking two steps ahead to offer our fans enriching experiences and to expand our global reach, including in LATAM and Asia. We’re excited to continue our progressive approach to bring NFTs to MLS with industry-leader Sorare. Utilising the latest technology to provide fans the opportunity to add MLS players and future stars to their personal collections and give them an interactive free-to-play fantasy soccer game made Sorare the obvious choice”, Chris Schlosser, senior vice president of emerging ventures at MLS, said.

Manchester City's parent company are looking to add Dutch club NAC Breda

City Football Group, the holding company of Manchester City, has added an eleventh club to its global portfolio: NAC Breda (Dutch D2). The deal, evaluated at $7.7 million, has been confirmed by the D2 Dutch club, on March the 25th.

The deal is still subject to approval by the club's supervisory board, the Dutch federation and the Breda municipality. If validated, NAC Breda would become the fifth European club in the City galaxy after Manchester City, Girona (Spanish D2), Lommel (Belgian D2), and Troyes (French D2). CFG's portfolio of clubs also includes New York City (USA), Melbourne City (Australia), Mumbai City (India), Yokohama F. Marinos (Japan), Montevideo City Torque (Uruguay), and Sichuan Jiuniu (China). underpins the fact that “the announcement comes nearly a year after CFG secured a seven-year, $650 million loan underwritten by Barclays to invest in its international soccer network.

  • The company has reportedly been looking to build a $1 billion arena for New York City FC, its MLS team.

  • CFG also organized a $138.2 million revolving credit facility, according to The Financial Times.

  • In 2020, CFG secured $2 billion from Abu Dhabi’s sovereign wealth fund Mubadala.”

As a reminder, CGF has been founded in 2013 by the Abu Dhabi United Group for Development and Investment which remains a 78% majority shareholder. According to Forbes, CFG reached a $4.8 billion valuation in 2019.

Bundesliga and Bundesliga 2 revenue down more than 10% YoY to €4.05bn

The “DFL Economic Report”, released on April the 1st, states that after the 2019-20 and 2020-21 seasons, “which were greatly affected by the coronavirus pandemic, the downturn in revenue in German professional football already totals more than one billion euros”. The total revenue of the Bundesliga and Bundesliga 2 fell to €4.05 billion in the 2020-21 season.

The report which presents the cumulative key economic indicators for the Bundesliga and Bundesliga 2 for the 2020-21 season, underpins that “as most matches were played behind closed doors, the Bundesliga and Bundesliga 2’s match revenue alone, which mainly comprises ticket sales, fell by around 95 per cent compared with the last pre-pandemic season: from roughly €650 million in 2018-19 to only €35.5 million last season.

The impact of the matches played behind closed doors has also affected the number of people directly or indirectly employed in the Bundesliga and Bundesliga 2, falling by around 50 per cent to 26.183 (2019-20: 52.786).

Donata Hopfen, chief executive of the DFL, says: “Over the past two years, the pandemic has already had a dramatic economic impact on the Bundesliga and Bundesliga 2. Sadly, it is also affecting the current season – primarily because, once again, the stands often had to remain empty. In addition, there is the increasingly uncertain geopolitical situation and the fact that the revenue from the marketing of German-language media rights for the current 2021/22 season and the revenue from international marketing are lower than a year ago. […] We must explore new avenues to make the German professional football future-proof while upholding our traditions and values.

Nasser al-Khelaïfi proposes a Champions League opening night

Nasser al-Khelaïfi, the president of PSG and the European Club Association (ECA), proposed on April the 4th the organization of an opening night to launch the Champions League season each year.

Main opponent of the European Super League project and first defender of the Champions League, Nasser al-Khelaïfi, head of the European Club Association (ECA) since April 2021, detailed one of his projects proposed to UEFA to modernize the C1: It consists in the organization of an opening ceremony at each edition on the model of the Superbowl.

Al-Khelaïfi told The Athletic: "I can't understand how the Super Bowl (can feel) bigger than the Champions League final. The Super Bowl, and the U.S. in general, has that spirit, that creativity and that sense of entertainment. That's what I suggested: have a Champions League opening ceremony, have a game on opening night where the winners play a great team. It may not be a good idea, but at least let's challenge the status quo. Every game should be an event and entertainment."