BLOG ESPANA
Wednesday February 13 2013
Madrid and Barca’s TV effect

As figures are released showing Real Madrid and Barcelona’s percentage income from television, Dave Redshaw looks at their effect.

According to a new study by Deloitte, Real Madrid and Barcelona top the list of world football clubs with most revenue, although more alarming for La Liga is that they are the only two Spanish clubs in the top 20. Even so, despite the big two being only 10th and 13th respectively in the percentage list of total revenue earned directly from television, with 39 per cent of Real’s budget dependent on TV and 37 per cent of Barcelona’s, the figures still demonstrate the massive revenue each club produces overall.

By extension, the latest figures show the growing difference with other Primera clubs, where the percentage is much higher. Rayo Vallecano, in stark contrast, has an operating budget that is the lowest in La Liga and relies on 80 per cent of TV revenue, with President Martin Presa having presented a projected figure before the start of the season with an expected income of €19.9m and €16.6m expenditure. With regard to this income, television rights generate around €15.8m with just €1.96m derived from gate receipts.

Rayo are not on their own in counting on money earned from the TV companies, with almost all the other top-flight Spanish clubs managing to survive in similar circumstances,. Meanwhile, the Spanish Sports Council – or CSD - has been alerted to the danger and is currently attempting to help the broadcasters. Miguel Cardenal, the organisation’s President, has even requested that the Commission of Intellectual Property, which operates under the umbrella of the Ministry of Education and Science, seeks to find ways to combat the illegal broadcasting of games in bars and clubs.

With free live streaming of almost all matches via the internet also a problem, it is becoming increasingly difficult to address and Mediapro, responsible for the broadcasting of La Liga fixtures, is now trying to put games on all possible channels, including free-to-air TVE. Consequently, it has been financially problematic for many companies in recent times and Canal Plus in particular are reported to be in some trouble, with rumours of a struggle to honour its shirt sponsorship deal with Real Sociedad.

As for total revenue growth among Europe’s elite clubs, a Deloitte report published in January revealed the top 20 generated over €4.8 billion during the 2011-12 season, a 10 per cent increase on the previous year and four times the combined income of the  top 20 earning clubs in the 1996-97 campaign, when Deloitte first published its money analysis.

Indeed, the 20 clubs now contribute more than a quarter of the total revenue in European football, while Italian outfits are those most dependent percentage-wise upon the TV operators. In fact, Inter, Napoli and Roma are the top three clubs in the list, which is in contrast to how well the Bundesliga is administered, with Schalke, Bayern Munich and Hamburg the final three.

However, while the rich get richer, Real Madrid and Barcelona continue to grow ever stronger and add to their stranglehold on the Spanish game, with the rest continuing to fight over the TV scraps in what appears to be an ever diminishing market. Indeed, a number of La Liga clubs have been pushing for a more equitable distribution of television income over the past two years as the gap between the big two and the rest increases season after season.

At present, unlike in other European leagues where combined income is distributed on a sliding scale, Spanish clubs are free to negotiate their own deals individually, a state of affairs that could have long term repercussions further down the pecking order if not arrested.

The percentages TV earnings against total income, according to Deloitte, are:

  1. Inter                       60%
  2. Napoli                     58%
  3. Roma                     55%
  4. Lyon                       54%
  5. Marseille                 52%
  6. Milan                      49%
  7. Juventus                 47%
  8. Chelsea                  43%
  9. Tottenham              43%
  10. Real Madrid            39%
  11. Man. City               38%
  12. Arsenal                  37%
  13. Barcelona              37%
  14. Liverpool                34%
  15. B. Dortmund          32%
  16. Man. Utd               32%
  17. Newcastle              26%
  18. Schalke                 22%
  19. B. Munich              22%
  20. Hamburg               19%

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