La Liga’s financial disparity stems from TV rights flaw

By Simon Jalie
cristiano ronaldo
Real Madrid spent a record €93m to bring Cristiano Ronaldo to Spain (Photo: Jan Solo)

cristiano ronaldo

Tuesday 31 August provided a quiet closing day of transfer activity in Spain, which is clearly indicative of a gradual slowdown in the economic market.

Rather than looking for last minute additions, the big two were largely pre-occupied with off-loading their unwanted stars as the clock ticked down. Barcelona managed to get rid of Aleksander Hleb and Martin Caceres before the deadline, while Real Madrid left it extremely late to show Royston Drenthe and Rafael van der Vaart the door.

As it stands, a huge gulf in spending power separates the financial clout of Real Madrid and Barcelona from pretty much every other team in the division. It is true that Barca and Real make more money because of their consistent Champions League outings, their merchandising power and by filling their large all-seater stadiums. But more fundamental than all of that is their stranglehold on the broadcasting rights, which maintains and supplements their riches while simultaneously keeping the other clubs impoverished.

The basic flaw in the allocation of television money in La Liga, which has led to the bipartite domination of the league by Real Madrid and Barcelona, is to blame. The system permits the clubs to negotiate their own deals privately with the broadcasting companies without sharing revenue.

With the games involving the two ‘super clubs’ always likely to garner much larger audiences, this effectively allows them to demand around a 50% share of the cash designated for the whole league (estimated to be around €500million for the current season).

Unsurprisingly, the remaining clubs in the top flight are in favour of a switch to the collective bargaining method utilised in the Premier League, which sees the television money evenly distributed. Also unsurprisingly, Barcelona and Real Madrid, who hold so much political sway, are not interested in changing things at all.

Until they do, La Liga will increasingly come to resemble the Scottish Premier League and the threat of a breakaway division will continue to loom.

Having said all that, the summer has provided a financial wake up call to both giants of Spanish football. Barcelona are more financially stricken than their rivals in the capital as new president Sandro Rosell has inherited the debts brought on by his predecessor’s—Joan Laporta’s—extravagance. Huge losses made on players such as Zlatan Ibrahimovic and Dimitriy Chygrynskiy have not helped.

Meanwhile, Real Madrid have, by José Mourinho’s own admission, been usurped as the world’s richest club by Manchester City. The Madrilenos lost out to City in the pursuit of Aleksandar Kolarov and David Silva and perhaps failed to sign others such as Maicon because they could not stretch to what Sheikh Mansour was offering, even if the player was not interested in a move to Eastlands.

The spending has not stopped by any means, but if we look at the five most expensive La Liga signings this summer compared with the same period last year we begin to see a pattern emerging:

2010-11
David Villa (Barcelona) – €40m
Angel di Maria (Real Madrid) – €25m
Javier Mascherano (Barcelona) – €21m
Mesut Ozil (Real Madrid) – €15m
Sami Khedira (Real Madrid) – €12m

2009-10
Cristiano Ronaldo (Real Madrid) – €93m
Kaka (Real Madrid) – €65m
Zlatan Ibrahimovic (Barcelona) – €46m
Xabi Alonso (Real Madrid) – €35m
Karim Benzema (Real Madrid) – €30m

The figure for the five most expensive players has dropped from 269m euros to 113m in a single season. We have to concede that last year was an exceptional one in terms of Real Madrid’s expenditure, but this still provides further evidence that the transfer market is slowing down across Europe.

Financial analysts Deloitte believe the £250m spent by Premier League clubs this summer is the lowest outlay since 2006. If you factor in Manchester City’s portion of that sum it makes for very frugal reading. In England, just as here in Spain, it appears the belts they are a-tightening.

Read more on Spanish football at Simon Jalie’s La Liga Blog

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