Report: Seven Serie A clubs move to block €1.7bn CVC deal

Surprisingly positive response to domestic TV rights tender cited as reason for rejection.

by Tom Bassam

Report: Seven Serie A clubs move to block €1.7bn CVC deal
  • 14 of 20 clubs required to approve deal, meaning move effectively blocks investment
  • Letter to Serie A president says clubs are open to deal on league’s overseas rights

Serie A’s €1.7 billion (US$2 billion) private equity deal with CVC, Advent and FSI could be about to collapse as seven of Italian soccer’s most powerful top-flight clubs are set to block the investment, according to Reuters.

The global wire service has seen a letter signed by seven clubs – including Juventus, Inter Milan and Lazio – that says they no longer see the deal as ‘viable’. With 14 of the 20 Serie A clubs required to approve the investment, a rejection by seven of those would be enough to halt it.

According to Reuters, the letter addressed to the league’s president Paolo Dal Pino reads: ‘The term sheet submitted to the clubs belonging to the league has not reached a qualified consensus needed for the approval ... as things stand, this development opportunity is not viable anymore’.

The report says the signatory clubs cite a surprisingly positive response to Serie A’s domestic broadcast rights talks as an argument against the stake sale. The letter reportedly describes the tender as a ‘commercial success’, with the decline in annual fees being offered less than expected.

The seven clubs face opposition from eight teams that look favourably upon the private equity deal, according to Reuters.

The clubs also said in the letter they would not rule out talks with financial institutions to increase Serie A’s international market value, opening the door for private equity firms to agree a similar arrangement for the league’s overseas media rights.

SportsPro understands that DAZN, the multi-territory digital subscription sports media company, believes it has put in the strongest bid for Serie A’s domestic rights. A decision is expected on that deal on 18th February.

Sources close to DAZN suggest the company is pleased with the progress of the broadcast rights talks and the positive feedback received from the clubs. DAZN’s bid is worth around €850 million (US$1.02 billion) a year, significantly greater than the reported €750 million (US$908 million) offer from pay-TV rival Sky Sports.

From the perspective of DAZN, it believes it has put together the best bid for a package which would see it gain seven exclusive fixtures per matchday, with three more included on a non-exclusive basis. It is understood that Serie A’s top clubs are in favour of DAZN’s bid based on the weight of the financial terms.

Sky’s bid, which is for a package of multi-platform rights that carve out co-exclusivity for internet, IPTV and mobile services, is still under consideration.

Serie A could raise slightly more than €900 million (US$108 billion) by combining DAZN’s bid with an offer from Sky to stream the non-exclusive matches, according to Reuters.

The end of commission payments to outgoing media rights advisors Infront will save the league between €50 million (US$60.5 million) and €60 million (US$72.6 million) per season.

After entering into exclusive talks with the CVC-led consortium in October, the Serie A clubs approved the private equity deal in November. Serie A president Paolo Dal Pino described the agreement as “a turning point” for the Italian soccer industry at the time, adding that the investment will enable the league to “reaffirm Serie A’s brand worldwide”.

There were rumblings of discontent that emerged about the deal earlier this month as sign-off was further delayed. According to Sky News, the private equity consortium recently wrote to the 20 Serie A clubs warning that it would withdraw its offer unless the agreement is ratified immediately.