By David Owen
July 13 – Telefónica, the Spanish telecommunications group, has agreed to pay €600 million for domestic broadcasting rights to La Liga for the forthcoming season, in a landmark deal for Spanish football.
The agreement is significant not so much for the amount, which is thought to be only marginally up on the sums that the league received for the equivalent rights last season, but because the rights have been sold collectively, as in other leading European countries, rather than on an individual, club by club, basis.
The deal comes just two months after Spain’s national court blocked a proposed strike ordered by the Royal Spanish Football Federation (RFEF), backed by the players’ union (AFE), in protest at a new law – passed by the Spanish government and supported by the Spanish league – introducing collective bargaining from 2016. The shutdown would have affected the final two rounds of league games and the Copa del Rey final, throwing the end of the Spanish season into chaos.
Spain’s individual rights-selling model had underpinned the financial strength of its leading clubs, European champions Barcelona and Real Madrid, while exacerbating the financial chasm between them and most of their domestic rivals.
According to Deloitte, the professional services firm, average total revenue for Barcelona and Real Madrid exceeded €500 million in 2013-14, compared to €170 million for Atlético Madrid and on average just €43 million for the other 17 clubs.
Deloitte recently projected that a move to collective selling might quickly enable La Liga to overhaul the Bundesliga as the second-highest revenue-generating football league behind England’s Premier League. It said the hope was that such a move “will generate at least €1 billion per season from the sale of league broadcast rights, a c.40% increase on the value of current deals”.
Collective selling should also reduce the Spanish league’s acute polarisation.
Said Deloitte: “The collective sale of broadcast rights will ensure a more equal distribution of broadcast revenues between clubs, bringing the ratio between the highest- and lowest-earning La Liga clubs, 7.4:1 in the 2013-14 season, to at most 4.5:1. This ratio will be progressively reduced should the value of rights exceed €1 billion, potentially to as little as 3.5:1. For comparison, in 2013-14 the ratio for Serie A [Italy] was 5.3:1, Ligue 1 [France] 3.4:1, Bundesliga [Germany] 2:1 and 1.6:1 for the Premier League [England].”
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