CVC Capital Partners and Advent International want to add a “breakaway” clause to their €1.6bn deal to buy into Italy’s Serie A football competition to protect their investment if a rival European super league is launched.

The two private equity firms are part of a consortium with Italian investment fund Fondo FSI that is hoping to buy 10 per cent of a new company that will manage the broadcasting rights for Italy’s top football division.

That deal is in its final stages, but has been complicated by last month’s revelations that some of Europe’s biggest clubs are in discussions to create a new continental competition that could threaten the primacy of national leagues.

International investors have become increasingly interested in European domestic football leagues — which have suffered significant losses during the pandemic — because of the huge global audiences and valuable broadcasting rights. Private equity firms have approached Germany’s Bundesliga and Spain’s La Liga in recent weeks.

Any agreement reached by Advent and CVC to protect their Serie A investment could set the tone for other investors.

The two firms are worried about the potential for a new European competition to entice Italy’s biggest clubs including Juventus, Inter Milan and AC Milan away from Serie A, according to several people with knowledge of the developments. 

Last month Josep Maria Bartomeu, the outgoing president of FC Barcelona, said his club has approved participation in a “future European super league of clubs, a project put forward by the biggest clubs in Europe”. 

That super league project is being led by Real Madrid president Florentino Pérez, who is working with investment bank JPMorgan to create a €6bn debt financing package to launch the competition, according to people with knowledge of the plans. 

Mr Pérez’s design is to replace the Champions League, the annual club competition run by Uefa, European football’s governing body, which distributes €2bn between participating clubs. 

The super league would include up to 20 teams that would play each other in midweek games, leaving them to continue to play domestic fixtures at weekends. 

Still, executives at CVC and Advent are worried this would damage the prestige and global audience for national leagues, hitting the value of broadcasting and sponsorship deals.

They also fear that the best players could be diverted to play in the new European contest, with domestic leagues becoming in effect “B-teams”. 

Next week, Serie A clubs will meet for a crucial vote on whether to proceed with the proposed private equity investment. 

If they agree, Advent and CVC are set to be offered a mechanism — dubbed by some a “breakaway” or “anti-embarrassment” clause — that would be activated if the super league happens, according to people with knowledge of the plans. 

While it is unclear how the clause would work in practice, its aim would be to mitigate damage caused to the firms’ Serie A investment depending on the structure and impact of the super league.

CVC, Advent, Serie A, Real Madrid and JPMorgan declined to comment.

Source: Financial Times

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