After a huge amount of protest, the Spanish government enacted and imposed legislation in 2015, creating a revamped TV rights deal for La Liga which sought to centralise the distribution of profits in the league. The deal kicked-off during the 2016-17 season. One year on, we analyse how the new deal has shaped Spain’s top-tier football competition.
Much has been said about how La Liga giants Barcelona and Real Madrid have hoarded and gobbled up all the money in Spanish football. Indeed, they are the two largest clubs in the country and appear to be the only ones who seem to be earning cash. During the 2015-16 campaign, Los Blancos recorded gross income values of no less than £543-million. While their Catalan counterparts Barcelona earned an outstanding £595-million.
Barcelona were crowned champions during the 2015-16 season, with Real Madrid coming in at a close second. As such, the small difference in revenue was understandable. And yet, this was not the case with the rest of the league. Atletico Madrid, who came in third during the same year, only managed to reel in £167-million in revenue, a staggering three-fold difference in contrast to the top two sides.
This disparity in income between Spain’s top two and the rest of the clubs has been a point of argument for many fans and pundits alike in the country ever since the introduction of their first income model back in 1997, when the clubs were free to negotiate their own TV deals in a sort of every-team-for-itself manner.
Barca and Real Madrid
As such, hugely popular clubs like Barcelona and Real Madrid were able to acquire for themselves huge TV deals, while the minnows like Eibar, Levante, and Getafe, to name a few, simply didn’t get any. Indeed, comparing to those nine-digit sums of profit, Eibar, for the 2014-15 season, only racked up revenues of close to £11-million.
As the disparity in income grew, so did the clamour for changing the system. The call had become so compelling the Spanish government had to enact new legislation to address the problem. The new legislation, which kicked in during the 2016-17 season, proposed that La Liga’s TV rights revenue stream be changed similar to the model the English Premier League uses. In effect, much of the TV money is now distributed equally among the 20 clubs, with additional cash prizes based on merit and ability to generate income.
Furthermore, other systems were also introduced. Parachute payments for relegated clubs are now installed, and 10% of the total money in the deal is now sent and given to Spain’s second division, the Liga Adelante.
Ever since this announcement, the amount of matches available for broadcast understandably increased, with all clubs now on equal footing to get their games televised. Enter Spain’s broadcasting companies, who were all too eager to feature some beloved football in their channels.
Just two years ago, La Liga signed a three-year deal worth £2.38-billion with three broadcasting conglomerates: Telefonica, Mediapro, and Vodafone-Orange. It is important to note that Telefonica owns Movistar Plus, a streaming service similar to Netflix. Meanwhile, Mediapro owns BeIn Sport, a pay-per-view channel available in much of Asia. The deal, in effect, was able to spread La Liga beyond Europe, promoting the likes of Atletico, Valencia, and Real Sociedad, in other parts of the world.
For the first time ever, La Liga clubs other than Barcelona and Real Madrid, are now able to rake in profits that come close to that of the Premier League. Furthermore, they are now able to gain new fans and followers, thanks to their expanded reach across the world.
But an increase in income, for many fans, can be translated best only one way: transfers.
Before the new deal kicked in, it was Barcelona and Real Madrid who dominated the transfer market. True enough, of the top five most valuable transfers during the summer of 2015, the two biggest teams and La Liga bought three of those. The Catalan giants brought in defender Arda Turan for £31-million, while Real Madrid signed right-back Danilo and holding midfielder Mateo Kovacic for a combined value of £57-million. Total expenditure for La Liga back then was at £488-million.
Fast forward to now, with the new TV money pouring in Spain’s top-flight, we see a change. Excluding the Ousmane Dembele purchase, which Barcelona was able to pull off for £94-million because of the Neymar sale, it was Atletico Madrid who now had much of the action. They brought in Diego Costa from Chelsea and left winger Vitolo for a combined value of £88-million.
Down the line we now see Sevilla pull off big money deals, buying striker Luis Muriel and defender Ever Banega. Relative minnows Celta de Vigo were able to purchase Turkish winger Emre Mor for £12-million – a value which would’ve been just above their whole TV revenue three years ago.
Clubs in Spain are now able to afford their player’s wages. Former Manchester United winger Adnan Januzaj was brought in by Real Sociedad, former Chelsea sharpshooter Loic Remy was brought in by underdogs Las Palmas, and former Barcelona winger Christian Tello was brought in by Real Betis. These clubs were once relative unknowns in the footballing world, but thanks to the new TV rights deal they are able to negotiate deals that they simply didn’t have the resources for three years ago.
And make no mistake, the more equal footing has started to translate into results. While it is still early in the season, after seven games, only Barcelona have found themselves still on top of the table. Atletico is currently in fourth place while Real are in fifth. Sevilla and Valencia are currently on second and third, while Real Betis find themselves in a Europa Legue spot at sixth. Close behind them are Leganes with just two points difference.
Betis, for their part, were able to defeat Real Madrid 1-0 in September, while Las Palmas were able to beat Athletic Bilbao 2-1.
Taking all these into consideration, a new era appears to be dawning on La Liga. And as football fans, we can only be excited at the prospects it offers for the future.