French investigators raided offices of the French football league and private equity firm CVC Capital Partners on Tuesday as part of an investigation into possible corruption and embezzlement related to an investment deal, a judicial official said.
The searches took place amid an investigation that opened in July into charges of misappropriation of public funds, active and passive corruption of a public official and illegal taking of interest, the judicial official told The Associated Press.
The person with direct knowledge of the matter spoke on the condition of anonymity because they were not authorised to discuss an ongoing case publicly.
Under its current president, Vincent Labrune, the French league approved in 2022 an investment deal with CVC as part of a new commercial subsidiary in charge of marketing media rights. CVC invested €1.5 billion ($1.6bn) in return for a 13% stake in the new commercial subsidiary managing TV rights, valuing the entire capital of the commercial subsidiary at €11.5bn.
The CVC deal was sealed after French football came close to bankruptcy following the collapse of a major broadcast rights deal with Mediapro.
The investigation was launched after the French National Financial Prosecutor’s Office received in November 2023 a complaint from a group called AC! Anticorruption. Their lawsuit focused on a possible misappropriation of public funds when the French league’s subsidiary company was created following the partial transfer of capital to CVC.
CVC declined to comment on the case and the French league said in a statement that it is cooperating with the investigation “in total transparency.”
“The investigation, which is taking place in the greatest serenity, will confirm that the action taken by the League has always been guided by a deep commitment to French football, in full compliance with the rules in force,” the statement said.
The deal with Mediapro should have been worth more than €4bn ($4.8bn) over four years for the top two tiers but collapsed after only four months. After its collapse, the league was forced to ask the government to set up a financial rescue plan amid huge revenue losses exacerbated by the coronavirus pandemic.
Looking for a cash injection to help clubs, French league president Vincent Labrune found an agreement with CVC Capital Partners.
The deal was supported by a large majority of clubs but has been challenged by Le Havre, which launched a lawsuit against the French league because it was unhappy with the distribution of the money.
Twenty clubs were playing in the elite back then — compared to 18 now — with more than €1.1bn to be shared between professional clubs in the top two divisions.
Of this sum, Paris Saint-Germain was granted the largest share, €200m to be disbursed in three installments. Marseille and Lyon were entitled to €90m each, and €80m going to Lille, AS Monaco, Nice and Stade Rennais.
The remaining 13 Ligue 1 clubs were given €33m each.
Ligue 2 teams were granted €3m each, provided they remained in the second tier of French football for the 2021-2022, 2022-2023 and 2024-2025 seasons.
This was not the case for Le Havre, which was promoted to the elite at the end of the 2023 season and thus missed out on half of the amount it was entitled to, receiving only €1.5m.
And once back in the top flight, the club said it was not entitled to half of the €33m allocation earmarked for so-called small Ligue 1 clubs, as it was not in the elite during the 2021-2022 season.
This post was originally published on this site