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LFP enters into “exclusive negotiations” with the CVC fund for its trading company

The NFL announced Friday that it has begun “exclusive negotiations” with its trading company’s CVC fund. This process will allow him to value the company at “11.5 billion euros”.

The Professional Football League took a big step towards creating its own trading company by entering on Friday “exclusive negotiations” with the CVC fund, paving the way for the acquisition of this investor 13% of the capital of 1, 5 billion. EUR, announced.

The process, which was voted unanimously by the LFP’s board of directors, would allow it to value the trading company “at €11.5 billion,” the association notes. A commercial company that is supposed to exclusively manage the TV rights to Ligue 1 was created through the adoption of the Sports Act at the end of February by Parliament.

Four offers have been submitted

“An announcement will be made when the final documents are signed, which will take place in the coming weeks,” the association said in a press release. Four investment funds made final bids on Wednesday to become a minority shareholder in the new French football business: CVC, as well as Hellmann, Friedman, Oaktree and Silver Lake.

These four funds entered into direct negotiations with the LFP at the end of 2021, and showed their willingness to pay 1.5 billion euros, which is the amount that the university wants. Being the lifeblood of professional football, the business must allow for a shareholder with strong visibility and recognized expertise.

A project considered vital to relieve clubs

A guarantee of immediate new money and future development for L1 and L2 clubs, exhausted by the failure of former broadcaster Mediapro and the health crisis, with 600 million euros in net losses frightening this season. The LFP hopes to put this new structure in place at the end of the season, with the goal of having clubs get the amounts promised this summer, or at least a timeline.

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Part of the unexpected gains obtained will be transferred to the trading company itself, to hire specialists and develop its activity, another part to the FFF and another part to the LFP, to meet its debts and form a safety cushion. In return, minority shareholders will have representation on the structure’s board of directors and will be compensated from future revenue. In particular, the idea would be to better sell the TV rights to French football, particularly internationally, during the next cycle starting in 2024.

Headquartered in Luxembourg, CVC Capital Partners specializes in private equity. This means that CVC is injecting money into unlisted companies. The goal is to accelerate the development of the company in question, before reselling the shares at a capital gain. In sports, CVC invests primarily in companies that organize competitions. This was the case with the commercial rights to Formula 1 in 2006. Then with the English Premier League in Rugby or more recently with the Spanish Football League.