French law enforcement officials conducted searches at the headquarters of the French soccer league and the private equity firm CVC Capital Partners on Tuesday, as part of an inquiry into alleged corruption and embezzlement associated with an investment agreement. A judicial source confirmed the details of the investigation, which began in July, focusing on potential misappropriation of public funds, active and passive bribery of public officials, and illegal conflicts of interest.

The individual who revealed this information requested anonymity due to the sensitive nature of the ongoing investigation and their lack of authorization to speak publicly about the matter. The scrutiny centers around a deal approved in 2022 under the leadership of Vincent Labrune, president of the French soccer league, that involved a substantial investment from CVC. The firm committed 1.5 billion euros (approximately $1.6 billion) for a 13% stake in a new subsidiary tasked with managing and marketing the league’s media rights, thus appraising the total value of the subsidiary at 11.5 billion euros.

This strategic CVC investment was critical, occurring shortly after the French soccer scene faced significant financial challenges due to the failure of a major broadcasting rights contract with Mediapro. The investigation traces back to a complaint lodged with the French National Financial Prosecutor’s Office in November 2023 by a group named AC! Anticorruption. Their allegations pointed to possible misuse of public funds during the establishment of the league’s subsidiary and its financial association with CVC.

Initially, the deal with Mediapro was projected to be worth over 4 billion euros ($4.8 billion) across four years for France’s top two soccer divisions; however, it fell apart after just four months. In the wake of this collapse, the league sought government intervention to create a financial rescue plan due to severe revenue declines aggravated by the COVID-19 pandemic. In search of immediate financial assistance for the clubs, Labrune secured an arrangement with CVC Capital Partners.

While the investment agreement received broad support from a majority of teams, it faced opposition from Le Havre. The club initiated legal action against the French league, expressing dissatisfaction with the allocation of financial resources. At the time of the CVC deal, there were twenty clubs in the top division, as opposed to the current eighteen, with over 1.1 billion euros being distributed among professional clubs in the top tiers. Paris Saint-Germain received the largest share, totaling 200 million euros apportioned in three payments, while Marseille and Lyon got 90 million euros each. Lille, Monaco, Nice, and Rennes were granted 80 million euros each, and the remaining clubs in Ligue 1 received 33 million euros each.

For teams in Ligue 2, a sum of 3 million euros was allocated to each, contingent on their retention in the second tier for the 2021-2022, 2022-2023, and 2024-2025 seasons. This stipulation affected Le Havre, which secured promotion to the top division at the end of the 2023 season and consequently lost out on half of its entitled payment, receiving only 1.5 million euros. After returning to Ligue 1, Le Havre claimed it was ineligible for half of the designated 33 million euros for smaller clubs due to its absence from the elite division during the 2021-2022 season.