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Barcelona Said to Agree to Cut Soccer League Income Gap

Four-time European champion Barcelona agreed to a proposal to share Spanish soccer league television revenue more equally among smaller teams, two people with direct knowledge of the situation said.


fig 1 Barcelona vs Real Madrid

Under the plan, Barcelona and Real Madrid would get no more than four times as much as the lowest-paid La Liga team from the 2016-7 season, said the people, who asked not to be identified because discussions are confidential. The two biggest clubs currently each get about 135 million euros ($172 million) from television production company Mediapro, almost 6.5 times as much as the smallest of the 20 squads.



A Real Madrid official, who spoke on condition of anonymity in line with club policy, said the team wants more time to discuss how to increase and share television income. Barcelona spokesman Chemi Teres declined to comment on the talks.

The league, which wants to make the championship more competitive, is aiming to incorporate the proposal into legislation by the end of the year. Real Madrid, the current European champion, and Barcelona have won nine of the last 10 La Liga titles. The plan could see their broadcast income remain unchanged for between two and four years as smaller teams bridge some of the income gap, the people said.



fig 2 Ronaldo vs Messi. Talismans of their respective teams

Spanish clubs currently negotiate TV rights individually. Under its proposal, the league will sell the rights collectively and distribute the combined income, currently about 800 million euros.

Real Madrid President Florentino Perez said Sept. 8 that it’s not clear if that model is the best solution for La Liga. He added that the real issue was how to get more money for every team because the gulf with the English Premier League was “disproportionate.”

Premier League clubs last season pooled 1.56 billion pounds ($2.5 billion) of TV money, more than twice as much as Spanish teams. English champion Manchester City received 96.6 million pounds in television revenue last season, about 1.5 times what lowest-earning Cardiff got, according to the league website.

As covered by the Independent also Real and Barça told to cut Spain's wealth gap to boost league's value
Real Madrid and Barcelona risk diminishing La Liga's appeal to television clients if they do not agree soon to share broadcast income more equitably with their rivals, a leading Spanish finance expert has warned.


fig 3. 20 teams in La Liga - guess who will win this year?

The Spanish league does not yet use the system of revenue distribution common among European peers. Real and Barca, who negotiate TV deals individually and are the world's richest clubs by income, get about half the total pot of around €600m (£526m). As a result, most other Spanish top flight clubs are unable to meet the huge wage demands of top players or pay the sizeable transfer fees needed to buy them and they have no real hope of competing for the domestic title.

Many have slipped ever further into the red, with several, such as Real Mallorca, Malaga and Levante, being forced into administration.


SD Eibar - debutantes in La Liga 2014/15. They had to raise €1.7 million online in order to get into La Liga

Barca set a points record in winning the league last season, with Real three back in second. Valencia, who were forced to sell their prize assets David Villa and David Silva in the close season, were 25 points behind Real in third.

"None of the other clubs, as it stands today, have serious and well-founded hopes of winning the title," explained Jose Maria Gay, a professor of accounting and soccer finance expert at the University of Barcelona. "If Real Madrid and Barcelona make the effort and give up part of their income to help the other clubs it would only be a short-term sacrifice.

"Over the longer term, with a more competitive league and a better level of quality among the other clubs, they would earn even more."


Real, Barca and their La Liga rivals have had several meetings to try to thrash out a deal on sharing TV revenue and are due to hold talks again on 22 October. However, any agreement would not come into effect until around 2014, after current contracts expire, and the proposals tabled most recently would guarantee current income and only share whatever extra amounts clubs managed to negotiate in any new deal with television companies.

The consensus among analysts is that they could expect between €200m and €300m more annually than the current total of around €600m.

Under a proposal from Real and Barca, the pair would get 34 per cent of the extra income, with 11 per cent for Valencia and Atletico Madrid and the rest shared among the remaining 16 clubs based on their position in the league standings.

An alternative proposal from Villarreal would result in 40 per cent of the extra income being shared equally and 60 per cent distributed according to results on the pitch.

"What is evident is that the two sides are far apart and the talks are very much open," Seville, who oppose the Real and Barca model, said in a statement after the latest meeting on 5 October.

The gap between rich and poor in La Liga is wide. A study published in May by Sport+Markt, a consulting firm, showed Real and Barca earned almost 19 times more from TV deals than the smallest clubs in the top division, by far the biggest gap among European leagues. The richest clubs in the English Premier League, by contrast, earned around 1.7 times more than their smaller rivals.

Real earned €145m (£127m) from selling broadcast rights for the 2008-09 season, compared with €2.6m (£2.28m) for Sporting Gijon and €2.4m (£2.1m) for Numancia, according to a study Gay published in May. Manchester United earned £53m last season while relegated Portsmouth got £31.8m, according to Premier League figures.



fig. 5 Barcelona and Real Madrid vs... everyone else



fig. 6. Teams in the English Premier League to compare

Angel Barajas, associate professor of financial management at the University of Vigo, said it would be better from the point of view of balanced competition to share total income.

The most effective system for Spain would be one similar to that used in the Premier League, with a fixed minimum, a percentage according to a club's position in the final standings and a percentage according to how many games are broadcast.

There should also be financial aid for clubs that are relegated to offset the income loss, as in the Premier League, Barajas added. "It must be remembered that any new deal would take effect only in 2014."


The Premier League is proud of its distribution model, which has been in existence since the league was created in 1992. "The purpose of the model was to create a stable platform while rewarding success," league spokesman Phil Dorward said.

source
the source

OP: I've always said that La Liga needs to divvy up that money to make the league competitive, and surprises may be afoot.
Tags: league: la liga
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