We ask for a better distribution of the TV rights revenues in European football. Huge disparities can no longer be tolerated for the best interest of all.
People love their football clubs and care about how finance affects the competition. Across the five largest football leagues in Europe can be found some of the most legendary football and masterful players in the world. Yet despite an almost universal love for watching the sport, there is a great disparity in the ways in which TV revenues are distributed between teams. The English Premier League has what many would call the fairest allocation, whereas the Spanish La Liga has the worst. In order to ensure every team receives the revenues they deserve and the beautiful game continues to reach and inspire millions, we ask for a fair and uniform distribution of TV rights across all of the European leagues.
5 big leagues, 5 systems
Below is a breakdown of each of the big league’s distributions of revenues. We will explain how it works, and what the consequences are in terms of disparity between the top and the bottom teams. (All figures from the 2013/2014 season.)
The English Premier League is the richest league of the five in terms of TV revenues. From national TV revenues alone, the league generated 1 142 million euros. Including revenues from its global broadcast, which is particularly popular in Asia, it grossed other 733 million euros, for a total of 1 875 million euros in 2013/2014.
National TV rights are distributed following 3 criteria:
- 50% of the amount is evenly split between all the teams.
- 25% of the amount is split according to the number of times a game from the team was broadcast. In this category, the difference between the team receiving the greatest revenues and the team getting the least is a 2:5 ratio.
- 25% of the amount is split according to the ranking at the end of the season. Each team gets approximately 1.5 million euros more than the team ranked under it. That way, there is an interest for the teams to rank the best they can, even if they are not fighting qualify for European competitions or to avoid relegation.
International TV rights are evenly split between all the teams.
In the Premier League, almost 70% of the TV rights are evenly split (50% of the national rights and all the international rights). As a result, the highest grossing team (Liverpool) earned 117.1 million euros, only 1.57 times the lowest grossing team (Cardiff) with 74.5 million euros.
The total TV revenue generated by the German Bundesliga was 495 million euros in 2013/2014. The German system works in two phases:
- First, teams are ranked according to their ranking in the last season (40%), the season immediately before (30%), and the two seasons before that (20% and 10% respectively). This gives a ranking for the last 4 seasons.
- Then TV rights are split according to this ranking, with the top team (Bayern) earning 36.9 million euros, and the last team, Eintracht Braunschweig, earning 18.2 million euros. The ratio between the highest grossing team and the lowest was 2.03.
The French League earned 488 million euros in TV revenues in the season 2013/2014. The way this is split is similar to the English system for national rights:
- 49% of the amount is evenly split.
- 24% of the amount is split according to the ranking at the end of the season.
- 5% of the amount is split according to the ranking of the past 5 seasons.
- 22% of the amount is split according to the number of times a game from the team was broadcasted.
Last season, this system gave Paris Saint Germain 44.7 million euros, and the team who earned the least, Ajaccio, earned 13.2 million euros. The ratio between the two was 3.39.
The Italian League is the second biggest market in Europe in terms of TV rights. Last season, 846 million euros were shared between the clubs. Italia has another different system of allocation:
- 40% of the amount is evenly split.
- 25% of the amount is split according to the number of supporters and ticket sales.
- 15% of the amount is split according to the ranking of the past 5 seasons.
- 10% of the amount is split according to the ranking since 1946.
- 5% of the amount is split according to the ranking of the last season.
- 5% of the amount is split according to the size of the town where the club is located.
Last year, Juventus earned 94 million euros, while Sassuolo earned 17.9 million euros. The ratio was 5.25.
The Spanish League earned 755 million euros in TV revenues in the last season. In Spain the system is very different from the other four European leagues, as each club has the ability to negotiate TV rights. As a result, the two biggest teams, Real Madrid and Barcelona, were awarded a large part of the revenues, and even if they gave back part of the money to other teams, the differences in their earnings are huge.
Real Madrid and Barcelona each earned 140 million euros during the last season, while teams like Almería, Elche or Valladolid only received 18 million euros. The ratio was 7.78.
The Spanish Government wants to change this and there is a project to centralize and split TV rights differently, starting at season 2016/2017. The split would be as follows:
- 50% of the amount would be split evenly.
- 25% of the amount would be split according to the ranking of the past 5 seasons.
- 25% of the amount would be split according to TV audiences (national and international).
The objective is to reduce the ratio between the highest and lowest earning teams from 7.78 to something more similar to Italy’s 5.
Why do we want an equitable split of TV rights?
It’s for the best interest of the competition
There develops a vicious circle in the country with an uneven split of TV rights: the big clubs get more money, use it to build better teams and win more games, cementing their position. For example, in Spain, Barcelona and Real Madrid have won 9 of the last 10 championships, and 15 of the last 20. With a more equitable split, other teams will have better chances to progress and offer a more varied and exciting league.
Top clubs don’t depend so much of TV rights
The biggest clubs in Europe have other sources of income, and TV rights are less important in their budgets than for smaller teams. TV rights of their national league only represent 34% of the budget of Juventus, 25% of Real Madrid, 21% of Manchester United, 9% of PSG and only 8% of the budget of Bayern. Big clubs are able to make vast sums with publicity contracts, franchised products and shirt sales, and so one might argue that smaller or developing clubs should receive a greater share of TV revenues.
There are 20 (or 18) clubs in a league
If every team but the two or three richest in the league is unable to afford to field a squad, who would these powerhouses play? National championships are the base of the European football, and require a variety of clubs to compete. This is where teams qualify for European competitions, and where they can win prestigious titles like the championship or the national cups. Top clubs need small teams the same as small team need top clubs (for image and promotion). That is why it is vital to insure that small clubs can get a fair share of TV rights.
What do we ask?
We ask UEFA and the national leagues to standardise the rules which allocate TV rights between teams. We ask that they be shared in a way that no team will earn more than twice the amount earned by any other team, the ratio between the highest grossing team and the lowest grossing team to be 2 at most. Today, only Premier League and Bundesliga would fulfil this rule.
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