CVC’s Boost LaLiga funding shows evidence of progress by clubs in and outside Spain

 

Two-and-a-half years after LaLiga and CVC Capital Partners finalised a groundbreaking strategic partnership, there is tangible evidence across Spain’s football landscape that the collaboration is bearing fruit.

Indeed, through the Liga Impulso (Boost LaLiga) project that has been supercharged by the €2bn (£1.7bn/$2.2bn) agreement, CVC’s support is on track to accelerate the professionalism and development of participating clubs by as much as 20 years, according to those at the heart of the alliance.

Under the terms of the original deal, participating clubs must allocate 70% of the funds towards infrastructure, international development, brand and product development, talent acquisition, communications strategies, innovation and technology, as well as a content development plan for digital platforms and social media. With the funding split across three years, it is thought that at least €1bn has already been set aside for much-needed infrastructure projects across the 44 participating clubs.

Of the total financial commitment by CVC, up to 15% can also be used to sign players, with the remaining 15% allocated towards reducing debt, enhancing the competitiveness of participating clubs on the balance sheet, as well as on the pitch.

However, this is much more than a short-term cash injection, with the structure of the agreement designed to ensure solid foundations are built for long-term financial sustainability.

Underpinning this, in return for its investment, CVC, a financial backer of various other sports properties worldwide from Formula One to World Rugby, secured an 8.25% stake in a commercial entity with LaLiga.

It is therefore in the interests of CVC and LaLiga that the Spanish league and its clubs thrive for many years to come, boosting business operations, revenues and international interest in a competition that already has a global following.

Clubs’ Office

As part of this long-term vision, and to ensure money is not needlessly frittered away, LaLiga opened a ‘Clubs’ Office’ to serve as a consultancy service for clubs whilst reviewing and signing off all investments.

“We gave the clubs objectives on the business side,” Clubs’ Office director Jaime Blanco Manrique tells SportBusiness.

“For these, we are talking about 11 different business verticals in total, and we help the clubs to invest the funds correctly. We have 200 to 250 objectives per club to achieve on the business side, so we are coordinating the way in which LaLiga can work with the clubs.

Jaime Blanco Manrique

“The work that we are doing from the Clubs’ Office goes a long way beyond the funds though. We are talking about relationships with clubs and regular consultations. When we are talking with the clubs, the CVC funds are behind us, so that adds huge value to LaLiga. We want the clubs to keep growing and our Clubs’ Office team is here to help that.”

The participating clubs receive different amounts of money based on audiovisual coverage and their contributions to the growth of LaLiga since the centralisation of media rights in 2015.

“The amount is calculated by taking into account the participation of each club’s league performances since the centralisation of LaLiga’s broadcast rights in 2015,” Blanco says.

“So, if one team has been in the top division, LaLiga EA Sports, every year since then it will get more than if it was in the third division. Likewise, if you finish top of the second-tier LaLiga Hypermotion, you will receive more than the club that finished in fifth place.”

The 44 clubs are divided into four different groups, with varying expectations applied depending on the size and capability of each.

Within these groups, all of the clubs are ranked according to their status across each of the specific verticals, and then specific objectives are identified. For example, in terms of digital strategy, teams in the highest group are required to achieve key growth in social media followers across all channels or garner a certain number of views for online posts.

Every vertical is broken down in a similar results-driven way. All of the objectives get reviewed and potentially updated four times per season following consultations with clubs.

Development verticals

The infrastructure and digital verticals have garnered the most interest among participating clubs so far, with more than 30 projects having been undertaken in these areas. The projects vary from hospitality refurbishments to social media content revamps – and some have been transformational.

SD Eibar’s business club is a perfect example of the bottom-line opportunities available.

“SD Eibar created a new business club from scratch,” says Blanco, citing one example from the second tier. “They did not have one in the past and we defined with them how it should be in terms of the products and the pricing, and so on.

“We are also working with Real Betis at the moment as they are building a new stadium, and we are involved with them in all of the hospitality products and all of the benefits of each package. Furthermore, on the digital side, we are working with almost all of the clubs on the ways they produce content on their social media platforms.”

As a symbol of the benefits available across clubs of all sizes through the CVC partnership, SD Eibar’s business club is a perfect example of the bottom-line opportunities available. The business club was created with the aim of being a meeting and networking point for local companies, and it is hoped that it will promote and strengthen relations between the club and neighbouring enterprises – and their staff – for many years to come.

The incremental income benefits are already evident. Revenue projections for year one of the business club range from €40,000 to €60,000 before year two is expected to garner €60,000 to €80,000. Revenue is expected to rise above €90,000 in year three.

In terms of infrastructure, SD Eibar has also been able to invest in its stadium and training ground, as well as the new business club – and they are not alone.

“We are trying to help clubs, and a large portion of the funds have been invested in infrastructure. We can see the upgraded stadium of Villarreal CF for example, the new training facility of Real Sociedad, or SD Eibar’s completely new training facility,” Blanco continues.

“Osasuna has also reshaped its brand. They have defined everything regarding the brand and thanks to the objectives they have hired a consultancy firm which has started to work with them. I think we are starting to see good examples of worthwhile investments everywhere.”

LaLiga keeps a close eye on progress achieved by clubs with their investments. At the league’s annual general assembly, the clubs are placed in an overall table, ranking their efforts. A dashboard is also available to each participating club, breaking down key steps made for every vertical and their sub-categories.

“At the end of the day, these objectives are for the clubs,” Blanco says. “What we say is: ‘This is for you to keep growing. If you don’t want to fulfil these, it’s on you.’ If a club is not fulfilling its potential with their objectives, we sit with them and ask, ‘What’s going on?’ So, they feel the pressure too. If you do well, your club is going to be in a better position to achieve more revenue generation.”

Internationalisation

LaLiga has been working to increase its global appeal for a number of years.

Since 2016, the LaLiga Global Network has placed dozens of executives in key markets worldwide with the aim of nurturing valuable local relationships and ultimately boosting interest in the league and its clubs worldwide.

Other more recent flagship campaigns include a partnership struck in December last year with the Tourism Office of the Spanish Embassy and Instituto Cervantes to encourage football fans from India to visit Spain.

The internationalisation of LaLiga and its clubs is also a major driver of the Boost LaLiga project and the strategies supported by the Clubs’ Office, resulting in consultancy sessions dedicated to increasing appeal on the international stage.

‘We need the clubs to have a constant presence on the international stage.’

Jaime Blanco Manrique

“We are working with clubs on this,” Blanco adds. “They do not have specific strategies to attract tourists despite being in Spain, which is such a popular country for international visitors. Many clubs don’t know how to bring foreign fans to the stadium on matchdays and also non-matchdays.

“For us, it is key to have bigger clubs in all aspects, and internationalisation is a key pillar. If we have bigger clubs, LaLiga will be bigger and we will have more followers and more people trying to watch the games on TV and in the stadiums. So, we need the clubs to grow. LaLiga has done its job but we need the clubs to have a constant presence on the international stage.”

LaLiga has told its clubs that they must have a strategic plan in place that details exactly which markets abroad they are looking to target – and how they will execute their strategies.

Blanco states that LaLiga and its clubs can explore international markets a collective unit, whereas in the past it was the league, along with a smattering of proactive clubs, that were interested in such endeavours.

“More and more clubs are activating constantly,” he says. “One example is Japan for Real Sociedad. It is a key market for them and they have been working for a year-and-a-half in that part of the world and plan to promote themselves there on a weekly basis.”

Strength in unity

For the league, Boost LaLiga offers opportunities for all clubs – and there is collective strength through a united approach.

CD Eldense and Racing Club de Ferrol were the latest teams to join the Boost LaLiga project after their promotions to the second tier at the end of last season.

According toBlanco, the aim is to help as many clubs as possible.

“Boost LaLiga is open for everyone,” he says. “Each year we have clubs being promoted and, since the start of the project, every club that entered the second division has joined Boost LaLiga. We want more clubs to join this project. It is important because to have bigger clubs is to have a bigger competition, and to have a bigger competition means you have bigger clubs.”

Every club in the Spanish top division is a Boost LaLiga member except for Real Madrid, FC Barcelona and Athletic Club de Bilbao. Despite this, the Clubs’ Office will still offer those three support and guidance if required, according to Blanco.

In terms of future plans, though, it is expected that the bulk of the remaining funds that are yet to be allocated to projects will focus on growing club brands abroad and developing infrastructure projects.

Blanco’s team is ready to continue the work it has undertaken already, but with a revamped focus on providing tailored support for clubs.

“From the Clubs’ Office perspective, I would say that we need to get closer, strengthen our relationships with the clubs, and move forward to consultancy projects,” he says. “However, we will continue general projects that are useful for everyone, such as how to embrace ecommerce and retail, for example.

“More and more of our projects are going to be bespoke for unique situations at individual clubs. That is where we are really going to add value, because we are going to be able to attack a precise area of need within a club and help them to develop that and generate more revenue.

“With each of the verticals we have been working on, we will look to deliver aid with more detail and ad-hoc consultancy projects for the clubs.”

Only time will tell whether CVC’s financial injection will have the desired long-term impact across a fiercely ambitious league, but for now at least, there are clear signs that Boost LaLiga has given clubs of all sizes an opportunity to thrive.

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