French League and CVC Capital Partners Raided in Corruption Inquiry
Ongoing Investigation
French league offices and CVC Capital Partners were subjected to raids by investigators on Tuesday as part of a corruption inquiry. This investigation is focused on potential corruption and embezzlement linked to an investment agreement, according to a judicial official. The raids occurred during an ongoing investigation that commenced in July, addressing allegations of misappropriation of public funds, both active and passive corruption of public officials, and illegal conflicts of interest, as reported to The Associated Press by the judicial official.
Investment Agreement Details
A source familiar with the situation, who requested anonymity due to the sensitive nature of the case, indicated that the French league, under the leadership of President Vincent Labrune, approved an investment agreement with CVC in 2022. This agreement was part of a new commercial subsidiary responsible for managing media rights. CVC's investment amounted to €1.5 billion ($1.6 billion) in exchange for a 13% equity stake in the subsidiary, which was valued at €11.5 billion. This deal with CVC was finalized after French football faced significant financial difficulties due to the collapse of a major broadcasting rights contract with Mediapro. The investigation was initiated following a complaint lodged in November 2023 by a group named AC! Anticorruption, which raised concerns about the potential misappropriation of public funds during the establishment of the French league's subsidiary company, which involved a partial capital transfer to CVC.
Reactions and Financial Impact
CVC has refrained from commenting on the ongoing case, while the French league issued a statement affirming its full cooperation with the investigation "in total transparency." The statement emphasized that "the investigation, which is being conducted with the utmost calm, will demonstrate that the actions taken by the League have consistently been driven by a strong commitment to French football, in strict adherence to existing regulations."
The agreement with Mediapro was anticipated to exceed €4 billion ($4.8 billion) over a four-year period for the top two divisions; however, it fell apart after just four months. Following this failure, the league sought government assistance to establish a financial rescue plan due to significant revenue losses intensified by the coronavirus pandemic. In search of financial support for the clubs, French league president Vincent Labrune secured a deal with CVC Capital Partners. This arrangement received backing from a substantial majority of the clubs, yet it faced opposition from Le Havre, which initiated legal action against the French league due to dissatisfaction with the allocation of funds.
At that time, there were twenty clubs competing in the top tier, in contrast to the current eighteen, with over €1.1 billion available for distribution among professional clubs in the top two divisions. Paris Saint-Germain received the largest portion of this amount, totaling €200 million to be paid in three installments. Marseille and Lyon were allocated €90 million each, while Lille, AS Monaco, Nice, and Stade Rennais were each granted €80 million.
The remaining thirteen Ligue 1 clubs were awarded €33 million each. Teams in Ligue 2 were allocated €3 million each, contingent upon their continued presence in the second tier of French football for the 2021-2022, 2022-2023, and 2024-2025 seasons. Le Havre, however, was promoted to the top division at the conclusion of the 2023 season, resulting in the club receiving only €1.5 million, which was half of what it would have been entitled to. Upon returning to the elite level, the club asserted that it was not eligible for half of the €33 million designated for smaller Ligue 1 clubs, as it had not participated in the top tier during the 2021-2022 season.
