New TV Deal In La Liga

The cornerstone of North America’s efforts to achieve competitive balance in a league is revenue sharing. Some teams make far more money than others, but if some of the money from high-revenue teams is sent to low-revenue teams, everyone gets rich and healthy. The richer teams may not enjoy it, but it isn’t really about them. After all, they’ll live. It’s not impressive to win if you’ve got nobody to play.

If you’re a soccer league with a promotion/relegation system, things get quite hairy on this front. Some teams will be in the league more often than others, and leaving the league via relegation means getting cut off from a hell of a lot of money. Sometimes clubs get so harshly stung by the loss of revenue- and players who immediately left to latch on to someone that isn’t relegated- that they get relegated again the next season, and maybe even the one after that as well. England provides parachute payments to freshly relegated clubs to make up for this in part, although this merely serves to move the gulf a little further south, into the muck of the next tier down.

A large part of that revenue sharing comes from television deals. While at least in the US- I have no idea how it works in other larger nations- teams independently strike up local TV deals to air their games regionally (and this is a big part of baseball’s money gulf), the bread and butter of a league’s TV situation are the deals to air games nationwide. In smaller countries, the bulk of Europe included, it’s really not practical to have local TV deals anyway- and if you’re making overseas broadcast deals, ‘regional’ games aren’t really a thing. When nationwide deals are done, it’s a given that it’s going to involve every team in the league, and the networks will get predetermined games and/or flex in key matchups as the season goes.

Unless you’re Spain.

For some time now, La Liga has been operating under two TV deals: one for Real Madrid and FC Barcelona, and one for the other 18 clubs. The Real/Barca deal, which only has to be split two ways, is worth three times the non-Real/Barca deal, which must be split 18 ways. The rules in Spain allow teams to negotiate their own deals, leading to the big two essentially teaming up for the purposes of taking all the money for themselves and fighting it out amongst each other while the remainder of the league is forced to beg for scraps. That, however, is slated to change. Under a deal before the Spanish government, the league would switch to a model more akin to the norm: 50% of the money generated from league TV deals would be split evenly among the clubs, 25% would be split according to ratings, and 25% would be split according to how teams finish in the table.

Ah yes. The league-table provision of revenue sharing. That creates inequalities of its own. The exact parameters of this can vary from place to place, but generally under this system, each position in the table is assigned a dollar amount- each successive position awarding more money- and where you finish determines how much you get. Most competitions feature some form of this system, and the money adds up as the competitions pile up; this, for instance, is the prize fund for England’s FA Cup this year. If you consistently finish well, you soak up more of the money.

If you get relegated, well… the deal also covers the second tier of the Spanish pyramid, the Segunda Division. 90% of the total money from the deal will go to La Liga; 10% will head to the Segunda Division. Getting relegated is still as bad an idea as ever if you want to stay financially healthy.

How much can be done about that, really, is a bit of a dilemma. Obviously, the best funding and the most attention is going to go to the best teams, but a healthy pyramid should see health at all levels, from champions to mid-table to yo-yo clubs on down to the grassroots projects. Getting relegated hurts, but you don’t want the club to be placed in immediate mortal peril for the experience. But then, how much money is out there to get people to watch lower-level clubs on TV?

At least finishing third won’t be such a disaster anymore.

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