TV REVENUES - A Comparative View

There were threats of a strike in Spain by the club owners, but it never happened. The Spanish clubs are still pursuing laws that will ensure that the clubs get a piece of the internet gambling pie. In addition, the clubs will revisit the weekly free to air game in the summer.

But lurking in the background were the G6 or 7, depending who you ask, who stood up against the strike. The middle class clubs (Villarreal, Sevilla, Athletic Bilbao, Real Sociedad, Real Zaragoza, Espanyol and Malaga) making a stand against the current individual TV revenue distribution and the proposed collective deal, that maintains the status quo.

Mando has quite eloquently covered the this whole situation, but I thought it was time to take a look at the big European markets and compare and contrast the various TV deals. (Source: Futebol Finance) These figures are only for Domestic markets.


PREMIER LEAGUE
Domestic TV Licensor: Sky Sports
Television contract: from 2009-10 through 2012-13
Total Value: 3.538 million euros
Annual breakdown: 1,179 million euros
Teams: 20

SERIE A
Domestic TV Licensor: Sky-Italia and Mediaset
TV Contract: 2010-11 through 2011-12
Total value: 1,822 million euros
Annual breakdown: 911 million.
Teams: 20

LIGUE 1
Domestic TV Licensor:Canal Plus and Orange
TV Contract: 2008-09 through 2011-12
Total value: 2,672 million euros
Annual breakdown: 668 mill.
Teams: 20

BUNDESLIGA
Domestic TV Licensor: Premiere AG
TV Contract: 2009-10 through 2012-13
Total value: 1,648 million euros
Annual breakdown: 412 mill.
Teams: 18

LA LIGA
Domestic TV Licensor: Mediapro
TV Contract: 2009-10 to 2011-12
Total value: 1,500 million euros
Annual breakdown: 500 mill. (280 To Real Madrid and Barcelona)
Teams: 20

EREDIVISIE
Domestic TV Licensor: RTL-Nederland
TV Contract: 2008-09 through 2010-11
Total value: 300 million euros
Annual breakdown: 100 mill.
Teams: 18

What is wrong with this picture? The Spanish League earns less in Domestic TV Revenues than Serie A and Ligue 1, and the Bundesliga is not far behind. This doesn't even take into account that the lion's share of the revenues from Mediapro goes to the big two giants. It seems that La Liga is selling their product short.

The disparity between the top and bottom of the league is enormous in Spain. 140M Euros of Domestic TV revenues goes to Real Madrid and Barcelona, where as bottom dwellers, Sporting and Malaga received 12M in 2010. Look at the competition during this same time period. In England, Manchester United received 58.2M Euros, where as Middlesborough received 34.9M. In Germany, Bayern received 28.1M compared to Hoffenheim at 13.3M. In France, Marseille received 49.9M versus relegation battlers Le Havre at 13.9M.

Redistribution of tv rights needs to be a priority. A competitive league makes a strong, financially stable, league.


Another factor that needs to be taken into account is the debt of the Spanish clubs. As reported by Punto Radio, La Liga clubs as of June 2010 were 3.526 million Euros in debt. This includes unpaid transfers, player salaries, social security, and back taxes.

Here are the top ten clubs:

-Real Madrid: 683 millon €

-Valencia: 550

-At. Madrid: 511

-F.C. Barcelona: 489

-Villarreal: 240

-Espanyol: 165

-Racing: 137

-Sevilla: 122

-Deportivo: 120

-Mallorca: 85


Catch 22? I am not anti-debt, it is a part of life, but Spanish teams need to start living within their means. A league wide austerity plan is way over due.

Improvements are needed in the earnings and spending arenas. Where is the Federation and League wide leadership when you need it?

Is this the League you Want?

Well, well, well, 12 games in and guess who is on top? The title race is basically a foregone conclusion. Real Madrid or Barçelona will take the spoilers and the Clásicos will decide it. So sad, that there is little chance that anyone else can vie for the title, once again (!) and that it is decided way too early.

Sure the competition between 3 - 8 is intense for European spots and the relegation battle is always tasty in La Liga. Anyone from 10th on down can fall into the abyss. But the gap between the top two aka duopoly, and the rest of the league is glaring, disturbing and threatening the competitiveness of the league.

And it's no wonder! if you look at the way the TV Revenues are distributed or lack there of, in Spain. Compare Spain to the other big leagues in Europe, you will see that it is so unfair. In fact is is a joke.

Look at the diagram below (source ligajusta). Real Madrid and Barcelona receive 50% of the TOTAL kitty. No wonder no one can compete for the title.





In England, revenues are well distributed, the same applies to France and Germany. And look at the bottom of the table in the chart. In this particular year the bottom in France, Germany and England grossed more monies than the bottom half of the table in La Liga. In fact the last place team in England earned more than 5th place (!) Villarreal - outrageous.

Sure the beautiful passing and possession based football on display in Spain is sublime. The youth development is second to none. Spain is the world champions. But with the emergence of the financial fair play rules in European competitions and the continuation of the same old TV revenue rules, as proposed by Barça and Real Madrid, the future looks quite bleak and boring. Spain will lose their co-efficient to Germany and possibly even France. La Liga will start to become even more predictable and non competitive than it will hurt the big two. Do you really want a league where there are only two competitive matches a year for the title?

A strong league top to bottom is what is needed. The proposal by the "renegade" group lead by Sevilla's Jose Maria Del Nido is what is needed. 40% evenly spread to each team. 60% based on audience, league performance, and legacy points. This model is based on the Premiership, France, Germany, and Russia's model. Even Italy has changed to a collective, equitable basis with a portion based on results. I don't even want to bother outlining Real Madrid and Barcelona's proposal, because it is the same old thing. Check out Mando's previous posts if you are still interested.

The depressing thing is that Madrid and Barça have convinced most of the Second division teams to go along with them, because of the offering of a parachute payment. Anything is better than nothing? Live for the moment? I guess these teams don't see a future competing in La Primera. Not good.

The power of the people and the internet is ours and our voices of disapproval must be heard. The future of the beautiful game in La Liga is at stake. Is this the League you want? The Status Quo? Barça and Real Madrid the perpetual winners? I doubt it...