TV Revenue Issues

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When looking from afar the concentration of dominance of the big 2 in Spain is astronomical. In the past seasons the difference between Barcelona and Real Madrid is becoming vastly apparent. It is for this reason I am concerned. For La Liga the standout tie is the El Clasico for various reasons, however to younger fans it’s because its between the eventual champions and runners up.

It’s an issue when we compare it to the widely touted superior league, the English Premier League (in terms of entertainment). In England television revenues are set out by one entity which means it’s somewhat more socialist though still remaining meritocratic. The difference between Man United and the newly promoted clubs were reasonable to say the least.

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Barcelona and Real Madrid don’t share many similar ideals in past history, but their outlook regarding this is extremely similar. As far as they are concerned they bring the most money in so therefore deserve the most. As Barcelona’s vice president said “Yes to a better distribution of the money from rights but also maintaining the status of Barcelona and Real Madrid”.

While the wish to remain the highest earners seems plausible, these pair however clocked up a lot of the total revenue which completely over shadowed the next best pair of Atletico Madrid and Valencia.  La Liga is increasingly lacking parity and more and more flock to the Premier League where one can’t define an ultimate fixture, where teams have so much depth that at any time the top 4 can switch positions within the span of a week (barring 2012/2013 admittedly).

Financial issues such as this get deeper and harder to fix, especially with football relying increasingly on money to be able to continue a cycle of winning which in turn brings in fans and marketability. It’s a carousel which is snowballing into a far bigger problem – teams are losing identity and relying more heavily on Sheikhs and sugar daddies of this sort to bring in stability. Vincent Tan completely erasing Cardiff’s history or Sheikh Mansour fielding a team solely brought through the transfer market is becoming the norm.

The problem with the Financial Fair Play rule that UEFA introduced is again teams such as Madrid can happily spend huge because their revenue allows them to do so; on the other hand teams like Valencia have to halt the building of their new stadium while also having to sell vital players to clear up debts. A more stable way of selling TV rights would help a whole lot. It would provide teams with somewhat enough money to be able to at least compete at a competitive level: realise Barca and Madrid really don’t require huge contracts. Their huge profitability that comes with their product means far less reliance on TV revenue, they can bring in the best of players merely through the aura of their clubs.

This irritates me because regardless of TV rights, these two will dominate because they simply can. What comes with this type of money is reinvestment into the club – signing the best players, having the best academies and having unmatched spending power.

Though the TV revenue parity in La Liga is horrendous, if we take a look at the Bundesliga which has one of the most socialist models financial wise: Bayern Munich still dominates to the point it’s a one team league with a second team that is able to challenge occasionally. Again a few elite clubs have the spending power of these select elite clubs – so is TV revenue the sole reason of a duopoly in La Liga? No. But can it be improved to help smaller clubs? Of course it can.

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How should TV revenues be sold exactly? Well of course Barca and Madrid should receive the most, perhaps 35% in total combined. This allows far more cap space for other clubs to compete at a high level. Nonetheless there needs to be centralisation so TV rights can be sold more fairly, somewhat similar to the Premier League. As mentioned, Barca and Madrid could continue their dominance without most of their money from TV at all – this is the power they possess.

By makings things fairer it should create a better showings in Europe as well as domestically, ultimately creating a better product and garnering interest beyond the top 2. For this to happen La Liga needs Barcelona and Real Madrid to cooperate and though they are willing to allow for greater flexibility, rest assured that these two aren’t willing to give up their positions. Ultimately Real Madrid seeks a European league so it’s simply not in their interest to give up a huge proportion of revenue.

Lastly the recent protest from the Racing Santander players and staff must be applauded for their solidarity against wrongdoing. They are not being paid and this situation eerily mirrors what Malaga faced with their former owner. As football spirals out of control financially these issues will become far more widespread. Best of luck to Racing Santander who have decided to take a stand.

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