"[La Liga] is the dullest league in the world" - Eduardo Bandrés (former president of Real Zaragoza). Is it? How can a league with two of the most popular clubs worldwide be the "dullest league in the world"? The answer is simple. While Barcelona and Real Madrid continue to thrive, they make-up only ten percent of the league. The remaining ninety percent is really struggling.
At first glance, it would appear that La Liga is doing great. After all, Real Madrid and Barcelona were recently ranked at the top of Deloitte & Touche's rich list, and they also managed to scored more points than any other team in Europe two seasons ago. But if two teams are just so dominant both financially and on-the-field, then how can other teams compete? And if they can't compete, then how is this a league that millions of people would want to follow? Also, while one could assume that Madrid and Barcelona have amazing teams and that's why they lead the league in points, couldn't one also assume that the teams that they're playing are have horrible teams and that's why they consistently lose?
Unlike in other European soccer leagues, the teams in La Liga create their own TV rights deals. This appears to be fair because the better teams with the larger fan bases deserve more money. But when two teams are earning right around 120 million euros per year, and the next highest club is earning less than 30 million euros per year, this is not in the best interest for the league as a whole. La Liga is in a situation where the rich are only getting richer and unless something is done, it will only continue to get worse.
As much as it must be great to be Barcelona or Real Madrid right now, if current trends continue, these two teams are going to be left without any competition at all. The league is at risk of imploding if eighteen of the twenty teams are forced to spend more money than they take in just to have a small chance each year of competing. As one director reportedly told Jorge Pérez, the secretary of the Spanish Football Federation, "if I do a good job economically, we'll go down and they'll kill me." The teams in the league have to be financially irresponsible in order to have a chance to win. If they're financially responsible, they have no chance to win, they'll be relegated out of La Liga, and then making money or having a chance to win become just that much harder.
While the top two teams continue to thrive, the large majority of the league is stuck in a vicious, paradoxical cycle of being forced to spend too much money in order to stay afloat as a club. Until something changes, whether it be through a salary cap, changing up the TV revenue sharing, or some other way, La Liga will continue in this weak state.
Sources: http://www.guardian.co.uk/football/blog/2010/mar/28/barcelona-real-madrid-spain ; http://aeryssports.com/soccer/files/2011/05/fmkjd.jpeg
This debate is similar to the one we were talking about in class. Most European teams utility-maximize rather than profit-maximize. The quote that Jorge Pérez makes alludes to this exact dilemma. He says if he were to run the club with a profit-maximizing scheme, he would immediately be fired because his club would not do well in the league. However, his club struggles economically when this approach is taken.
ReplyDeleteSo if the only way to succeed is to act financially irresponsibly, does this suggest the La Liga clubs truly are too big to fail?
ReplyDeleteDo you think the new rules that FIFA is bringing in next year, such as the financial fair play rules, is going to help LaLiga's balance between teams? Or are Barcelona and Madrid already too dominant for other teams to catch up.
ReplyDeleteThat is a great question Sean for a couple reasons. Obviously Barcelona and Real Madrid are two of the biggest clubs when it comes to expenditures. However, these two clubs are also highest on the revenue charts meaning they are considered "sustainable." For example, a club like Manchester City in the Premier League has a pay roll of 120% of their revenue meaning they are unsustainable. This is not the case with Madrid and Barcelona. Personally, I don't think Barcelona and Madrid will continue to make this much money unless they are able to break into other markets. Think of it this way, Barcelona is having the most successful run in club history (maybe in all history) and they are still behind Madrid in revenue.
ReplyDeleteBut you also have to take into account Barcelona and their youth system. One factor of being sustainable is being able to produce your own players. Barcelona with La Masia has arguably the greatest youth system in the world. Names like Xavi, Iniesta, Messi, Pique, Puyol, Fabregas and others are all from this youth system. And with young stars Thaigo, Cuenca, Delofeu, Espinosa, Rafinha and more there does not seem to be an end in sight.