Uruguayan soccer wants new model as Mediapro sets $50m goal
Wilmar Valdez, the president of the AUF, the Uruguayan soccer federation, has said that the model that is the basis for its long-running commercial partnership with sports agency Tenfield is “extinct,” and that it needs to find other means of extracting full value from domestic rights.
Valdez was responding to a report produced for the federation by Mediapro, the Spanish rights agency, which claimed that Uruguayan soccer has the potential to generate $50 million a year.
At present, the AUF receives just $11.6 million a year from Tenfield for broadcasting rights to competitions including the top-tier Campeonato Uruguayo, in a deal that runs until at least 2025.
In an interview with Uruguayan radio station Del Sol FM on Monday, Valdez said: “What is clear is that this model has become extinct. We are coming from a relationship of 19 years working in the same way and we have the same business model. We cannot continue like this.”
He added that “even if there is a signed contract” with Tenfield, “the reality shows you something else, that you have to look for necessary ways with the necessary intelligence and talking with the company itself to do another deal."
Valdez said that he and his fellow executives are “responsible as leaders of the AUF not to do things in a hurry and put the AUF in any legal difficulty,” but they are also “responsible for changing a system that is leading to a place that is a vicious circle in which the same thing happens year after year.”
Given the profile of the national team (pictured), which has qualified for its third successive World Cup in 2018, and comparisons with other South American countries, Uruguayan soccer is now regarded as somewhat undervalued.
Tenfield, which is headed up by renowned player agent Paco Casal, and leading clubs close to the company are said to be interested in extending the current rights deal until 2030.
However, Valdez said: “We are clear that an extension of the contract with the same model is impossible. There may be a new negotiation for a certain number of years and we will try another model, with different distribution. There cannot be a contract extension with the same model we had 20 years ago.”
He welcomed the Mediapro report, the result of an appointment made in February, in which the Spanish company was commissioned to advise the AUF on its commercial strategy, including maximising revenues from broadcasting and sponsorship.
Valdez said: “Although Mediapro did not have access to the Tenfield contracts, the presentation was made with real data and after studying the Uruguayan market. They understand that what football generates is that figure [$50 million].”
The agency’s report claimed that media rights alone should generate $40 million per year, advertising $5.6 million, the sponsorship of Uruguayan telecoms company Antel $1.2 million, and a deal with streaming partner Poipes $3.2 million, and made an estimate of the amount Tenfield pays to Nacional and Penarol, the two largest clubs, which have a separate deal from the other clubs that was not reported to Mediapro.
Valdez said the study showed that Uruguay generated less in broadcasting revenues than any other South American country, and that Paraguay earned $15 million from fewer pay-TV subscribers even though its population is twice as high (6.7 million vs 3.4 million).
Mediapro said that one way in which the AUF could fulfil its broadcasting potential would be through the launch of a dedicated television channel to show domestic soccer, along the lines of Canal del Fútbol in Chile.
The agency proposed a business model under which 20 per cent of the revenue would go to the operator, 7 per cent for investment in infrastructure and the remaining 73 per cent to the clubs.
The profit would amount to $36.5 million per year, meaning the clubs would get $2.28 million each per year, up from $737,500 at present.
Late last week, the ANFP, the Chilean football federation, announced that it had entered exclusive negotiations with Turner to sell CdF to the USA-based media giant in a deal worth around $1.3 billion.
The AUF has this year reclaimed from Tenfield sponsorship rights to the national team and secured income of $3 million, a figure which is set to rise in 2018, as seven companies have signed up to support the team, according to Valdez.
The AUF head said: “It has been an arduous job. Mediapro gave us an estimate and guided us on how to do the negotiations. The AUF negotiated and that is a source of pride.
“Going out with the general manager and marketing people as the AUF was complicated because the companies were not used to it. But it was excellent, we achieved the figures and we showed that, as the AUF, we could specify what Mediapro had told us.”