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.

Historic collective rights sale for La Liga fetches €600m

Chinese billionaire close to Atletico Madrid stake

There are reports floating around that Atletico Madrid is about to take on a new minority owner. Chinese billionaire Wang Jianlin, the country’s fourth richest man, is reportedly buying a 20% stake in the Colchoneros.

According to Madrid-based sports newspaper AS, Wang is set to purchase a 20 per cent stake in the team for a fee of around €40 million (US$46.4 million) from current owner Miguel Ángel Gil Marín, who is in Beijing with club president Enrique Cerezo to conclude the deal.

Should the investment go forward Wang would be the second high-profile investor from Asia to take a stake in La Liga following Peter Lim’s takeover of Valencia last May. It’s not hard to imagine why Wang chose Atletico; a storied history in Spanish soccer, recent upturn in fortune and Madrid location were surely big selling points.

However it remains to be seen whether the investment is a stepping stone to larger ownership in the club, a strategic partnership supporting his other businesses or merely about financial return.

Chinese billionaire close to Atletico Madrid stake

Deloitte Annual Review of Football Finance 2012

Deloitte’s 2012 Annual Review of Football Finance is out. It covers financial developments in the Premier League and the rest of European football/soccer in the 2010-11 season. Some notable highlights:

OVERALL REVENUE

  • EPL: +12% (+ £251m) to £2.26bn
  • Bundesliga: +5% (+€83m ) to €1.75bn
  • La Liga: +5% (+€82m ) to €1.72bn
  • Serie A: +1% (+€15m ) to €1.55bn
  • Ligue 1: -3% (-€30m ) to €1.04bn

WAGES / REVENUE

Deloitte Annual Review of Football Finance 2012

The Month in Soccer Business: February 2012

A monthly compilation of interesting business news related to soccer. February 2012. Continue reading “The Month in Soccer Business: February 2012”

The Month in Soccer Business: February 2012