Monday, October 10, 2011

Will TV Money Reshape European Football?

When I ask people who know much more than I do about European football there is a consensus that the answer is "no -- things will stay much the same."  Perhaps my views are overly influenced by the havoc in US college sports that has resulted from the scramble for TV money.  But I do see potential for major change to take place within the UEFA leagues, motivated by TV revenues. The latest data point comes from the EU Parliament:
The European Parliament is set to put forward a motion which will pressure La Liga to introduce a collective television deal in order to tackle the dominance of Barcelona and Real Madrid in Spain's top division.
Individual television rights deals are negotiated by Spanish clubs at present, meaning Barcelona and Real Madrid, with the largest fan bases and who can count on the support of 57 per cent of football fans in the country - according to a 2007 survey - can rake in far more revenue than any rival.

Each year the duo make approximately €120 and €140 million (£105 million-£122 million/$162 million-$189 million) from television rights, with the next highest recipient being Valencia - the last team to win La Liga in 2004 - who receive just over €40 million (£37 million/$57 million).

A new deal last year, which was still based on individual rights, was agreed by most Spanish clubs and would see the big two's dominance reduced slightly, but would mean they still take 34 per cent of all television rights money.

Valencia and Atl├ętico Madrid would then share 11 per cent between them, and the rest of the division the remaining 55 per cent.

Though UEFA is powerless in the matter, they are keen to help influence a new collective television deal in Spain . . .
UEFA clearly desires consolidation of TV rights, and such consolidation will make it more likely that leagues will see integration via revenue sharing, and down that slippery slope lies the possibility of new forms of cross-league competition if not realignment.  Far fetched?  Maybe.

1 comment:

  1. My (admittedly vague) memory of past anti-trust investigations of the EPL, blurred with anti-trust investigations of Sky's dominance as the only buyer capable of ponying up the relevant sums, is that the legal competition authorities get understandably confused between legitimate collective bargaining, a league collectively banding together to sell its rights based upon some internal deal regarding revenue sharing, hopefully on some coherent basis to benefit the sport's revenue as a whole, and the rights of individual clubs to sell their product and individual broadcasters being locked out of soccer because they can't play the money game for the large packages on offer.

    It isn't easy stuff, and compromises have to be found by the likes of Manchester United to get them to accept what on the face of it is less than their % share so that the EPL as a whole wins, and Man U end up with more cash than otherwise to enable them to take on Real and Barcelona in Europe while still remaining top dog in England.

    Which of course leads to smoke-filled rooms hammering out compromises, a scenario that the competition authorities, whenever they have seen it before, know leads to anti-competitive practices.

    It really isn't easy competition theory when the overall product, the EPL, itself has no competitors, so the usual troika of competition abuse - restricted output, higher prices, lack of innovation - can't really apply.