Barcelona and Real Madrid are in talks to buy a 10% stake in La Liga

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Barcelona and Real Madrid are in talks to buy a 10% stake in La Liga

The private equity investment by an investment firm valued La Liga at around 24.3 billion euros, according to a statement Wednesday, and comes at a crucial time for the league, which like others around Europe has seen finances badly affected by the impact of Covid 19.

Stadium closures and rebates to broadcasters during the pandemic combined to drag La Liga revenue down 8% to 3.1 billion euros in the 2019 2020 season, according to Deloitte's latest annual review of the sport, with lockdowns having extended into the more recent campaign.

That's having a big impact on clubs like FC Barcelona and Real Madrid CFMadrid CF, known for spending often sky-high sums to attract and keep the world's best players. Marquee signings were conspicuous by their absence during the current transfer window and in July, Argentinian Messi moved closer to signing a new contract at Barcelona with a 50% pay cut.

Both Barcelona and Real Madrid began this year to boost future revenues by signing up to a new Super League of Europe's top clubs, only to see those proposals disintegrate quickly in the face of fierce opposition from fans and politicians.

For CVC, the investment is similar to one it has been trying to make in Italy. The firm partnered with Advent International and Italy's FSI to purchase a 10% stake in the media company of Italian soccer league Serie A for about 1.7 billion euros, only to see the deal hit a snag when some clubs raised concerns about its terms.

Established in the 1980 s by a group of venture capitalists including Steven Koltes, Donald Mackenzie and Rolly Van Rappard, CVC is one of the largest private equity houses in the world. It oversees about $163 billion in committed capital, according to its website. The firm has a strong sports background, having invested in everything from international rugby competitions to Formula 1 motor racing.

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