Via Financial Times

Buyout group CVC Capital Partners has held talks with Fifa and Real Madrid about funding the creation of ambitious new global football tournaments that will challenge the sport’s most popular leagues.

CVC is holding discussions with Fifa, international football’s governing body, about acquiring the commercial rights to the revamped Club World Cup, a tournament that will feature some of the biggest football teams on the planet.

Separately, CVC and other corporate groups have been approached by Spain’s Real Madrid, the world’s richest football club by revenues, about creating a new club league contest, according to people familiar with the talks.

The private equity group’s move signals how leading investors are increasingly pursuing deals in the world’s most popular sport while football’s leading power brokers seek new ways to profit from growing corporate interest in the game.

It comes after US-based Silver Lake last week reached a $500m deal to acquire around 10 per cent in City Football Group, the parent company of England’s Manchester City and affiliated clubs around the world.

CVC, one of the world’s largest private equity groups with $82.5bn of assets under management, has a long history of buying and selling sports franchises, including Formula One and MotoGP. It has recently done deals in rugby union, paying £225m last year for a 27 per cent stake in England’s Premiership Rugby competition.

In October, Fifa announced that the current eight-team Club World Club would be replaced by a 24-team contest featuring at least eight European teams and taking place every four years. China will host the first expanded tournament in mid-2021.

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CVC is holding talks with Fifa over funding the competition, including by acquiring television rights to matches it would then sell to broadcasters around the world, according to several people with knowledge of the discussions.

But CVC executives were also recently approached by Florentino Pérez, Real Madrid’s president, about the club’s desire to create a rival annual competition featuring top clubs from around the world, according to several people with knowledge of the discussions. 

One person briefed on the talks said an option under consideration is creating two leagues of 20 teams each. Eight of those teams could include the founding clubs behind the World Football Club Association, a newly created body of which Mr Pérez was named president last month. 

Those founder members include Real Madrid, AC Milan in Italy, Auckland City in New Zealand, Boca Juniors and River Plate in Argentina, Club America in Mexico, Guangzhou Evergrande in China and Mazembe in DR Congo. 

According to official announcements at the time, the World Football Club Association was set up in November to lobby Fifa on its revamp of the Club World Cup.

Real Madrid declined to comment on detailed questions, but said Mr Pérez has never spoken to CVC’s head of media and sport.

People said that CVC’s discussions with Fifa over the Club World Cup have been more concrete and detailed than those with Mr Pérez, due to scepticism over whether the Real Madrid president’s efforts to form an entirely new global club league could gain support from the sport’s power brokers.

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Fifa will announce a tender process for corporate groups to bid for the Club World Cup’s commercial rights as early as this week, said a person close to the process, as the governing body led by Gianni Infantino searches for funding for the new competition.

Leading private equity firms, Chinese conglomerates and international broadcasters have also approached Fifa over acquiring rights to the competition, according to people close to the talks.

Fifa is seeking new corporate partners after an international consortium including Japan’s SoftBank and London-based Centricus abandoned a deal that would have guaranteed $25bn for the club tournament. 

Those plans were attacked by Uefa, European football’s governing body, and the European Club Association, a trade body that represents more than 200 of the continent’s biggest clubs. They wanted to defend the prestige of the Champions League, Europe’s top club tournament, which has a €2bn pot of prize money shared among participating teams.

Talks about changing the format of the Champions League to feature more moneyspinning ties between top clubs are ongoing.

Fifa was permitted to pursue its own expanded global club competition after getting agreement from European bodies, but it has been forced to scrap parallel plans for a new national team contest.

Fifa declined to comment on CVC’s interest, but said that it had “met with football clubs from around the world in order to discuss how to make the new Club World Cup an outstanding success, in particular, from a sporting point of view.”

CVC declined to comment.