La Liga vs. EPL: Television Rights

   

  

     How does La Liga sell it's television rights?  What are the differences between La Liga's set-up and that of the European Premier League?  There are pros and cons of each, but which one is better?

     In La Liga, each team is on their own to set-up television deals.  This means that the better, or more popular, teams are more likely to reach more lucrative deals for their clubs, while the less successful teams will simply take what they can get.

     In the EPL, the structure is much more equitable.  The television rights are sold collectively, rather than individually.  The total revenue is split into three groups.  The first group has 50% of the revenue, which is split equally amongst each of the twenty EPL clubs.  The second group has 25% of the revenue, and this is split-up based on league rankings.  The team at the bottom earns X amount of money from this 25%; the 19th-place team earns 2X, 18th-place team earns 3X, and so on.  The team who comes in first will receive 20 times more money from this pool than the team that finished in last.  The remaining 25% makes up the third group.  This money is paid as facility fees, which are determined based on the number of TV appearances.

     There are a few key points to think about when analyzing the differences between the two set-ups:  which one is more fair for the clubs, which one better maintains a competitive balance throughout the league, and which one brings in more money for the league as a whole.

     We'll start with the issue of fairness.  It seems only right that if you succeed on the pitch, you should be rewarded for this.  The better teams deserve to get more money than the worse teams.  In this way, La Liga is more fair than EPL.  But keep in mind that EPL does still give an advantage to the teams who do better.  They split up 25% of the revenue based entirely on league rank.  Is the EPL giving enough money to the better teams in the league?  Are the better teams in La Liga receiving too much money for their success?  If the EPL split up the 25% evenly, and the 50% based on rank, would that be more fair than either of these two current set-ups?

     Competitive balance, which is undeniably a good thing for a league, is clearly more likely to be achieved through the EPL's more equitable distribution of the revenue.  Having more teams in the league with similar finances minimizes the chances for one or two teams to monopolize the talent.

     Finally, we need to look at which television rights structure more greatly benefits the league financially.  Looking at the Domestic markets, we see that while the EPL brings in 1,179 million euros from its television deal annually, La Liga brings in only 500 million euros each year.  In addition, more than half of this 500 million goes to just two clubs, Barcelona and Madrid.  La Liga as a whole not only brings in less than half of the EPL, but it makes less from Domestic TV deals than Serie A and Ligue 1.  This evidence shows that La Liga's teams, outside of the top two, are not getting anything close to what they deserve financially from television deals.

     It seems clear that the EPL structure is better for the league as a whole without a doubt.  La Liga benefits Barcelona, Madrid, and maybe a couple of other clubs who have gained popularity and achieved success throughout the years, but the large majority of the league misses out on receiving much more revenue.  The EPL benefits the league as a whole, but if the top teams in the EPL decide they don't like sharing the money that they're bringing in, could this be yet another factor in setting up the much talked about European Super League?  Even if we assume that the EPL set-up is better, which not everyone does, this does not mean that the EPL set-up is the best.  Would changing the percentages of the three groups to decrease the amount of money split equally and increase the amount of rank-based distribution make things more fair while still keeping the desired competitive balance?

Sources:  http://www.premierleague.com/page/Faqs/0,,12306,00.html ; http://forzafutbol.com/2011/04/tv-revenues-comparative-view.html ; https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8wzYBj0IjBWcpBYqlvdaP20YyEDU-4r7Nrt6PX0C2gdNaf31lp02yH53uUw7xxkkmOw69MCpbkRfHudi7-WnePZibUjtgP1_YNlV-Ye2p7Q5Wh2y51mGHAVEpwQwCdeOOAwu_hoBiSw/s400/16+Hearts+TV+Rights.jpg