Historic collective rights sale for La Liga fetches €600m

Telefonica has bought the domestic broadcast rights for Spain’s La Liga and Segunda Division in a €600m (~$667m) sale. The one year deal covers the broadcast and audio coverage rights of La Liga, the second division and Copa del Rey matches for the 2015/16 season. International rights are still in contention and expected to yield a similar figure.

Historic Sale

The sale is the first time that Spanish clubs have sold their rights as a package. Traditionally clubs have negotiated media deals on an individual basis, an arrangement which heavily favors Barcelona and Real Madrid, with both commanding huge contracts thanks to their global brands and high profile players. Other clubs have benefited much less from the explosion in interest in Spanish soccer, with the two giants often taking as much as half of the TV money flowing into the league.  The disparity is particularly pronounced for clubs in the second division with several clubs declaring bankruptcy over the past few years as a result of the financial crisis and low media coverage.

Worries about balance in the league have simmered for years but calls for change accelerated recently and culminated in a royal decree mandating collective rights negotiation. The decree was approved by the government in May and set off a brief strike as Spanish players protested the interference and distribution of TV revenues. The National Court quickly ruled the stoppage unlawful and allowed the season to end in normal fashion.

2015/16 and Beyond

The 2015/16 package is still a half step towards complete collective bargaining, as Telefonica holds individual deals with Barcelona and Real Madrid’s for one more season. Each contract is estimated to be worth approximately €140m ($160m); when combined with the €600m deal this suggests a combined value of domestic Spanish rights in the ~€900m ($1bn) range for the 2015/16 season.

While the collective sale is a triumph for the LFP the value still falls short of the eye-watering growth of the English Premier League. Jut in February the Premier League announced a new domestic deal worth €2.32bn annually (2.59bn) over three seasons beginning in 2016, a 70% rise on the previous €1.39bn (1.55bn) agreement. Much of the difference is explained by a much less developed market for subscription tele€vision in Spain (2014: ~€2bn) compared to the UK (2014: ~€6bn); but while currently smaller, the Spanish subscription tv market is growing rapidly adding 76% more subscribers in 2014 alone.

International Rights

Much of the short term potential for La Liga is likely to be realized outside of Spain. International rights sales only brought in €200m in 2014/15 and expectations around the new deal are high with many predicting at least a doubling in value. With Telefonica submitting a €450m bid as recently as two weeks ago an even greater increase seems possible.

The established pay-tv markets of Western Europe are low hanging fruit for La Liga, especially with growing interest in clubs outside the big two like Atletico and Valencia. The biggest opportunity though remains increasing league adoption in Asia and tapping into a generation of supporters that have grown up idolizing Ronaldo and Messi. The potential has not gone unnoticed with clubs have been taking on Asian investors and forming strategic commercial and media partnerships to spread their influence in the region.

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Historic collective rights sale for La Liga fetches €600m

4 thoughts on “Historic collective rights sale for La Liga fetches €600m

  1. dlx says:

    Where did you get the information that Telefonica holds individual deals with Barcelona and Real Madrid and that final number for domestic rights is app. €900m.?

    1. The Barca deal was rumored to be in the 140m range (ex. Reuters in February), others have estimated in the same range based on financials. I recall reading a similar report for Real Madrid but cannot find it now unfortunately, but I don’t think it would be too far off the mark to guess it being in the same range.

      1. dlx says:

        But several sites reported the the new deal is only slightly better than the previous deal which was €588m and many reports are saying that the final number will be €1200m.
        With €900m for domestic rights and at least €550m for international the number would be significantly higher. Plus there was an article in Marca saying Bein is ready to offer €250m on top of international and domestic rights for exclusive 20 Barca and Real matches.

        How much do you think La Liga will get in total from TV rights in 2015/16? And how much could they get from 2016 onwards. In order to be competive as a league (compared to EPL) they would need at least €1.8 bn. I know this is purely speculation, but I am realy interested in your opinion.

        Great blog by the way.

      2. As I understand it the €600m domestic rights package does not include Barca-Real, hence adding in the speculated amounts to reach the ~€900m value for all of La Liga together. The €1200m number people are citing is just the €600m domestic and the expected €600m international deal, my number is simply the domestic estimate.

        Glad you are enjoying the writing, thanks for the kind words.

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