Spanish football is in a state of flux over the how to structure their next TV rights deal when it comes up for renewal in 2016/2017 season.
La Liga TV Rights: Deal or No Deal?
There is real tension over how best to resolve the issue. Virtually all Clubs now agree that there needs to be a new format in the collective selling of Television Rights. They have seen the riches the Premier League can generate and they look over enviously at how the English game has become a powerhouse on the World stage.
At present Barcelona and Real Madrid negotiate their own exclusive rights packages with TV companies in Spain. Originally this idea was sold to the other Spanish Clubs as a positive for them. The plan was to drive La Liga forward with the argument being that a stronger Madrid and Barcelona would raise the profile of the league, therefore attracting more fans to watch games and grow a wider TV audience as more people become interested in the league as a whole.
The only tangible outcome has been for Real and Barca to enter the financial stratosphere compared to the rest of the League. At the beginning of the past season almost half of the La Liga clubs couldn’t attract a shirt sponsor. This was mainly due the fact they couldn’t guarantee the exposure of their Clubs to a mass market TV audience.
Subscribers to Pay TV in Spain are just two million. Compared to the 13 million that BT Sport and Sky Sports enjoy, this is why Spanish Football is so alarmed.
Alfredo Relano, the Editor of Spanish Paper AS said recently: “…the reach of the English game, which is particularly strong in the Asian market, and a better marketing policy, are all factors that put the Premier League ahead in a global market.
“Their new contract is worth 2,300 million Euros per year for domestic rights. Here we’re dreaming of a deal that is worth 1,000m Euros, with the actual figure being around the 800m mark, of which 200m come from international rights deals. That’s to say, we aspire (only aspire) for an increase that constitutes roughly 20%. The Premier League, the clear market leader, managed an improvement of 70%. The English thoroughbred is leaving the poor Spanish donkey trailing behind! This theory of awarding both Madrid and Barça more of the revenue for the benefit of all has fallen down leaving us with an uncompetitive league system. England sees TV monies divided in a fairer manner amongst clubs and their deals grow and grow.”
His concerns are well founded. Leading figures and commentators on the Spanish game are particularly critical of the marketing of La Liga. A competition that has Messi and Ronaldo as its star attractions should be attracting big sponsorship and big viewing figures.
From a TV scheduling perspective one of the main issues with La Liga at present is that unlike in the Premier League, the Spanish federation only fix games 45 days in advance. This means that big TV companies are unable to plan their long term programming. Another issue is the free to air law in Spain where one La Liga fixture per round has to be shown on terrestrial TV. This also provides another barrier to the Liga officials as it damages their selling position by being unable to offer truly exclusive rights packages.
Javier Tebas, President of La Liga, in an interview with The Guardian’s Sid Lowe, was very forthcoming in how he saw the future. “The free-to-air game, protected by law, should not exist in my opinion. The perfect distribution for me would be: 50 percent divided evenly among the teams, 25 based on results and 25 on audience. We cannot keep having a difference like it is now or a difference of four or five times as much from one team to the next. [A ratio of] One to three would be more rational. But all of this relies on the government…We need that law passed and we need it now”
The Law he refers to is the Real Decreto. This would enshrine in Law the centralised sale of TV rights. At present most of the Clubs agree with this approach. In the recent LFP (Liga de Fútbol Profesional) Club meeting, of the 42 member Clubs from the Liga BBVA and Liga Adelante – Spain’s top two divisions – only Athletic Bilbao did not show their support.
Given their policy of only signing and playing players of Basque origin, they could be set to lose out if the league moved to a centralised model and suddenly rival Clubs had more money to invest in playing talent.
The graphic below illustrates the disparity in the distribution of TV money in Spain and England.
Although this shows that the top two earning clubs in Spain pulled in more than their English counterparts, Champions Atletico received just 45% of the amount awarded to English Winners Manchester City.
|
La Liga Top 5 |
Premier League Top 5 |
| Barcelona: £118.6m | Liverpool £74.1m |
| Real Madrid: £118.6m | Man City £71.9m |
| Valencia £37.6m | Chelsea £71.9m |
| Athletic Madrid £32.9m | Man Utd £71.9m |
| Sevilla £25m | Tottenham £71.1m |
| La Liga Bottom 5 | Premier League Bottom 5 |
|
Granada £14.1m |
Hull £60.8m |
| Elche £14.1 | West Brom £60.8m |
| Valladolid £14.1m | Norwich £60.8m |
| Rayo £14.1 | Fulham £60.8m |
| Almeria £14.1m | Cardiff £60.8m |
Following the EGM, Clubs showed signs of frustration at the slow progression being made; with there even being some noises of strike action should the situation not be resolved in the near future.
Espanyol chief Joan Collet stated, “We are ready to halt La Liga if this (law) does not come out.”
Atletico Madrid CEO Gil Marin also made his stance clear to Atleti’s Fans telling them, “The TV operators need to know if they are going to be managing the TV rights in four months or not, as much the Spanish operators as those abroad. The club’s creditors need to know if they have guarantees or not for the repayment of debts. The fans want to know if their teams are going to be able to grow. So football needs the government to make a fair and necessary step. To do this, modifying the current system of selling and distribution of TV rights is required.”
There does however appear to be a resolution on the horizon. Given the underlying tensions between the two main power brokers – The LFP (Clubs) and the RFEF (Spanish FA) – over this issue, they have now agreed to create a joint committee comprised of members from both organisations. This taskforce will lobby the Government hard and try to force their hand in agreeing to pass legislation.
With the Government dragging their feet, FC Barcelona have already decided to look after themselves by changing their Audiovisual rights Partner from the Barcelona based Mediapro to communications giant Telefonica. This initial one year deal will see them bank 140 million Euros. Mediapro currently hold rights for many La Liga Clubs such as Real Madrid, but recently some Clubs including David Moyes’ Real Sociedad have switched to Telefonica. In principle they can only agree one year deals until the end of season 2015/2016 when the planned Centralised contract will be in place, although some have decided to negotiate for longer given the length of time it has taken for the Spanish authorities to get to this point.
All in all we wait to see how effective the conjoined forces of the LFP and RFEF can be at getting current sports minister Miguel Cardenal to perform a quick u-turn and get this law passed. If not, the Clasico weekend has been pencilled in as a potential strike date for the LFP Clubs to make their stand. Downing tools just as the world’s media turn their attention to the biggest domestic game in club football would certainly be a big way to make a point.
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Barcelona’s Argentinian forward Lionel Messi (R) stands past Real Madrid’s Portuguese forward Cristiano Ronaldo during the “El clasico” Spanish League football match Real Madrid vs Barcelona at the Santiago Bernabeu stadium in Madrid on March 23, 2014. Barcelona won 4-3. AFP PHOTO/ DANI POZO (Photo credit should read DANI POZO/AFP/Getty Images)
