Ex-Spanish sports minister: Soccer TV rights growth can't continue
Spanish soccer cannot rely on broadcasting rights revenues continuing to grow, but does benefit from the clubs being public limited companies, according to former sports minister Javier Gómez Navarro.
Earlier this month, Javier Tebas, the president of LaLiga, said the league was expecting to generate €2.3 billion ($2.7 billion) per season from the sale of domestic and international broadcasting rights in the next cycle starting in 2019.
This compares with around €1.6 billion in the 2016-17 season.
However, Gómez Navarro, who was head of the CSD, the Higher Sports Council, from 1987 to 1993, does not believe that the inflation can be maintained, as rights-holders are not getting a return on their investment.
Speaking at an event on Thursday organised by the Sports Press Association of Madrid to mark 25 years of SADs (sports limited companies), he said: “We must be prudent. Football can continue to think television rights will grow to inconceivable limits, they will not because all those who are buying are losing money.”
Tebas claimed that LaLiga is targeting €1.3 billion per year from domestic rights and €1 billion internationally, and it was reported in Spain this week that internet giants such as Amazon and Facebook could enter the bidding when the rights for the next cycle, from 2019-20 to 2021-22, go on the market early next year.
However, as in the UK, where England’s Premier League is preparing a tender for the rights for the same period, many observers doubt whether these companies are yet prepared to put up the huge sums required to wrest live coverage from established pay-television broadcasters.
At present, Mediapro, the Spanish sports rights agency, and its pay-TV partner BeIN Sports, and Movistar Plus, the satellite and IPTV pay-TV service of telecoms giant Telefónica, hold the major live rights packages for LaLiga in Spain in three-year deals worth a total of €2.65 billion.
Broadcasting revenues have climbed significantly since the introduction of collective rights sales in 2015.
However, Gómez Navarro does not believe that the correct decisions have necessarily been made, pointing to a fall in the TV audience in China, the country which now has the fourth-largest following for the Spanish league.
He said: “La Liga sold them [the rights] to the television [company] that paid the most, not the one which had the highest audience.”
Gómez Navarro played a significant role in the organisation of the Barcelona 1992 Olympic Games as vice-president of the organising committee and oversaw the implementation of the 1989 Sport Law which led to many soccer clubs, albeit not LaLiga giants Barcelona and Real Madrid, becoming SADs, and to be more professionally managed and stave off debts, according to the former sports minister.
Gómez Navarro claimed there is “no other better model than that of the SADs,” though he admitted that the initiative had not worked as well as hoped at first because television revenues were not factored in.
He said: “The clubs took the conversion as a punishment even though it was the way to free them from debt, although the first restructuring plan failed miserably because the television rights were not seen as a method of payment. They [the clubs] lowered the income of the Primitiva [national lottery]."
LaLiga has made debt reduction a priority in recent years and in the 2015-16 season the combined debt of the clubs in the league’s top two divisions stood at €2.389 billion, a fall of €835 million since the 2011-12 campaign, while debt owed to public authorities had fallen from €643.1 million to €222.7 million.
The revenues of the two divisions increased by 15.9 per cent to €3.034 billion in 2015-16, following the return to collective rights selling.
On the future, Gómez Navarro said: "If a better formula is found than the SAD [then so be it]... but if you try to hold the members, subscribers and shareholders accountable then it is an absolute failure. There is no credibility. There is no better legal regime than that of the SAD with the responsibilities of the leaders."
To read the views of David Murray, the former head of sports rights at the BBC, on the forthcoming English Premier League tender, click here.