Real Madrid and Barcelona are the two football clubs with most revenue in the whole world. With total revenues in the 09/10 season of of 439 and 398 million euros respectively, they earn considerably more than other European powerhouses such as Manchester United (3rd with 349M), Juventus (10th with 205) or french Olympique Lyonnais (14th with 146MM). These numbers seem contradictory, given both clubs are located in Crisis-plagued Spain, where per-capita income is much lower then the countries where these other teams are located. One of the main reasons for this disparity comes from the difference in the negotiations for broadcasting rights.
There are two types of negotiations for broadcasting rights of the national leagues of European football. Collective bargaining is the most widely used in countries such as England, France, Italy and Germany. This kind of negotiation sells the rights to the whole league all in one package, and the proceeds from this contract will be distributed in a somewhat equitable way between the clubs in these leagues. At the English Premiership for example, there are three criteria for the sharing of the pie: 50% is divided equally between all 20 clubs, 25% is divided based on the league standings at the end of the season, and the final 25% partitioned is based on TV audiences. This way, there are not so many discrepancies between what the team that earned the most in the 2010 season, Manchester United, who made 58M on broadcasting rights compared to 10th place Manchester City with 45M or Middlesbrough, which was the team who least received broadcasting rights fee with 35 million Euros.
Out of the Big 4 football leagues, Spain is the only one where clubs negotiate individually. This has allowed for a huge gap between Real/Barca and the rest of the league. While the top two teams received more than 150 Million Euros each just for broadcasting rights (that is more than the total revenue earned by Atletico de Madrid, the 3rd richest club in Spain, that made 124 million euros in 2010), Atletico and Valencia (3rd and 4th best paid) receive each approximately 50 millions each, and sides like Almeria, which made around 20 Million last season, almost 10 times less than the two giants. This exorbitant difference might explain how a once so competitive league like the Spanish had results like the 8 x 1 Real Madrid win against poor Almeria this past week. This was not the first time such a diluted result happened this season: Real Madrid had already scored 8 against Levante and 7 against Malaga, while Barcelona also scored 8 against Almeria.
Studies have shown that collective bargaining makes the total pie much larger. In fact, despite having the two teams with greatest broadcasting revenue in the world, the Spanish league only ranks 4th in Europe in Broadcasting revenues per season, and that is even after the most recent contract with Media Pro, which considerably increased the revenue on TV rights in relation to past seasons. Even the French League makes more as a whole than La Liga, though no French team has won an Uefa Champions League for almost 20 years.
Perhaps this might actually be the reason why Spanish fans do not seem to be generally concerned with this duopoly of the broadcasting revenues. With 50% of football fans in Spain rooting either for Real Madrid or Barcelona, they are quite happy to see at least one Spanish team going far every year in the European competition. It is clear that this extra boost in cash is necessary for the Spanish teams to maintain squads that are competitive enough with other European sides, especially after Spanish government revoked what was known as "La Ley Beckham" which was nothing more than the Spanish clubs taking advantage of a national law that was designed to bring top paid executive and reserachers to the country, in order to make football starts pay much less tax than they would pay in England or Germany, and thus have a salary that would be attractive enough to play in Spain. Without this insane income distribution, it would be hard to think Real Madrid would be able to have players worth 30 million euros sitting at their bench.
While indeed it is nice for Spanish Nationalism that the two giants are able to compete in "equality" with other European giants this model is unsustainable in the long run. The Spanish league as we know today is divided into two different tournaments. While Real Madrid and Barcelona fight to see who will lose less points against the smaller teams, the other 18 compete for "The other League". In the past seven seasons there were no other champions except for Real Madrid and Barcelona. On the 2011 season, the 3rd placed Valencia had more than 20 points less than second placed Real. The league is becoming as boring as the Scottish league which also has only two teams (Celtic and Rangers) dueling for the cup. Another important aspect to this flawed model is that in order to compete with the huge investments made by Real and Barcelona, other teams had to incur in huge debts and many clubs are on the verge of bankruptcy. Total debt of first division teams has topped 4.5 billion Euros last year. The funny thing is that despite they're amazing revenues, Real Madrid and Barcelona are actually responsible for a good part of this debt.
It is clear that something must change in this partition, even if this means being less competitive on European competitions, otherwise, Spanish league risks going bankrupt as a whole, which wouldnt be a good business for Barcelona and Real Madrid either. I guess you could say that in this case, Greed is not good! :)
If you like the topic, here is another interesting article about it.
There are two types of negotiations for broadcasting rights of the national leagues of European football. Collective bargaining is the most widely used in countries such as England, France, Italy and Germany. This kind of negotiation sells the rights to the whole league all in one package, and the proceeds from this contract will be distributed in a somewhat equitable way between the clubs in these leagues. At the English Premiership for example, there are three criteria for the sharing of the pie: 50% is divided equally between all 20 clubs, 25% is divided based on the league standings at the end of the season, and the final 25% partitioned is based on TV audiences. This way, there are not so many discrepancies between what the team that earned the most in the 2010 season, Manchester United, who made 58M on broadcasting rights compared to 10th place Manchester City with 45M or Middlesbrough, which was the team who least received broadcasting rights fee with 35 million Euros.
Out of the Big 4 football leagues, Spain is the only one where clubs negotiate individually. This has allowed for a huge gap between Real/Barca and the rest of the league. While the top two teams received more than 150 Million Euros each just for broadcasting rights (that is more than the total revenue earned by Atletico de Madrid, the 3rd richest club in Spain, that made 124 million euros in 2010), Atletico and Valencia (3rd and 4th best paid) receive each approximately 50 millions each, and sides like Almeria, which made around 20 Million last season, almost 10 times less than the two giants. This exorbitant difference might explain how a once so competitive league like the Spanish had results like the 8 x 1 Real Madrid win against poor Almeria this past week. This was not the first time such a diluted result happened this season: Real Madrid had already scored 8 against Levante and 7 against Malaga, while Barcelona also scored 8 against Almeria.
 |
| source: futebolfinance.com |
Perhaps this might actually be the reason why Spanish fans do not seem to be generally concerned with this duopoly of the broadcasting revenues. With 50% of football fans in Spain rooting either for Real Madrid or Barcelona, they are quite happy to see at least one Spanish team going far every year in the European competition. It is clear that this extra boost in cash is necessary for the Spanish teams to maintain squads that are competitive enough with other European sides, especially after Spanish government revoked what was known as "La Ley Beckham" which was nothing more than the Spanish clubs taking advantage of a national law that was designed to bring top paid executive and reserachers to the country, in order to make football starts pay much less tax than they would pay in England or Germany, and thus have a salary that would be attractive enough to play in Spain. Without this insane income distribution, it would be hard to think Real Madrid would be able to have players worth 30 million euros sitting at their bench.
While indeed it is nice for Spanish Nationalism that the two giants are able to compete in "equality" with other European giants this model is unsustainable in the long run. The Spanish league as we know today is divided into two different tournaments. While Real Madrid and Barcelona fight to see who will lose less points against the smaller teams, the other 18 compete for "The other League". In the past seven seasons there were no other champions except for Real Madrid and Barcelona. On the 2011 season, the 3rd placed Valencia had more than 20 points less than second placed Real. The league is becoming as boring as the Scottish league which also has only two teams (Celtic and Rangers) dueling for the cup. Another important aspect to this flawed model is that in order to compete with the huge investments made by Real and Barcelona, other teams had to incur in huge debts and many clubs are on the verge of bankruptcy. Total debt of first division teams has topped 4.5 billion Euros last year. The funny thing is that despite they're amazing revenues, Real Madrid and Barcelona are actually responsible for a good part of this debt.It is clear that something must change in this partition, even if this means being less competitive on European competitions, otherwise, Spanish league risks going bankrupt as a whole, which wouldnt be a good business for Barcelona and Real Madrid either. I guess you could say that in this case, Greed is not good! :)
If you like the topic, here is another interesting article about it.
No hay comentarios:
Publicar un comentario