The advent of pay-TV in the 90s has definitely changed the way we think football, providing teams seemingly endless amount of money that, in most cases, went straight into the pockets of players and agents, in escalation on purchase prices and remuneration that only the recent crisis seems to have begun to question.
The so-called Big-5 leagues (Premier League, La Liga, Serie A, Bundesliga and Ligue 1) move with the TV rights around E3.6 billion per year. We will try to understand how this mass of money is poured on the Club
The data that we will observe all come from official sources, with the exception of the Serie A, the only one that does not disclose the details of the subdivisions for the team and for which we will rely on our estimates. For Premier League, Bundesliga Ligue 1 and Serie A, data refer to 2012/13, for La Liga we will use the values for the 2011/12 season.
Premier League dominates, Serie A follows
Among the 5 Leagues, Premier League, with a total of E1.13 billion is the leader. And we're not still taking into account the approximately 40% increase already obtained from the 2013/14 season (the next) that will bring this competition alone, to aprox E2 billion revenues.
Serie A follows with E865m, ahead of Liga BBVA (E604m), Ligue 1 (E491m) and Bundesliga (E343m, but divided among 18 teams).
Centralization vs. Individual bargaining
Looking at the distribution criteria adopted, we first note that, gradually, it has abandoned the system of individual bargaining (it resists only in Spain and Portugal) in favor of a centralized system of collective bargaining.
Spain itself, however, is already working towards the adoption of a model similar to the Italian one, so it is probable that from 2014/2015 all five major leagues will have adopted collective bargaining, managed by either the Football League or by the National Federation.
The different distribution criteria
Beyond the methodology adopted, what is clear is the diversity of approach of the various Leagues on the distribution criteria . The chart below allows us to perceive at a glance that there are, in fact, three distinct results sought (and obtained).
The "first-to-last" ratio, ie the gap between the TV rights received by the first team of each country and the last, is a first distinctive feature: it is 11.7 times in Spain, in Italy 4.4 times, 3.7 times in France, in Germany and only 2.1 times 1.6 times in England.
But it is perhaps observing the absolute values (right graph) that is best perceived the gap: despite, for example, France has a ratio of 3.2 (not too far from 4.4 Italy), Olympique Lyonnais receives only" E30m more than in Dijon; in Italy, Juventus has exceeded by E74 million Pescara.
We then wanted to test the weight of the first Club, but also the first five of each competition.
The scene, Spain aside, seems to be slightly different, looking at the various competitions; what it does changes, however, is the different opportunities given to all teams to be able to actually get to the finish line more.
Let's see now, for each of the major leagues, distribution rules and their effective enforcement.
Premier League makes a distinction between domestic and international share share.
The domestic share (about 61% of the total) is distributed on an "50-25-25"
The international share (39% of the total) is instead divided equally among all clubs.
This means that 70% of TV rights are divided equally among all the Clubs. The ratio of first-to-last is the lowest of all (1.55) and the top ten teams get about 55.5% of the total budget, in a situation of great balance.
TV rights are negotiated by the League Football Association (DFB) on behalf of the Bundesliga teams 1 (which is responsible for 79% of the total) and Bundesliga 2 (21%). The distribution mechanism is exclusively on sporting merit, based on the rankings last four years and the participation in European competitions.
The fee shall be assigned as follows:
The international share, however, is reserved for the Bundesliga teams 1 and is divided as follows:
The ratio of first-to-last is 2.11 and the top ten teams get about 65.4% of the total budget.
TV rights are negotiated centrally and divided according to three main criteria:
The first-to-last ratio is 3.71 and the top ten teams get about 66.6% of the total budget.
Contracts are for the time being traded on an individual basis. This has produced a system strongly in disequilibrium with Real Madrid and Barcelona that divide 50% of the pot. Then there is a second tier of clubs (Atlético Madrid, Valencia and Sevilla and Villarreal to a lesser extent) that have revenues comparable to those of their competitors in other national competitions. The rest of the teams, however, are basically satisfied with the "crumbs".
Not by chance the first-to-last ration is 11.66 and the top ten teams get about 79.4% of the total budget (but 65% is already taken by the top five).
Italy (our evaluation on 2012-13)
For the full analysys of ther Italian system, please refer to our recent post by Donato Biancosino.
For those interested in pursuing the matter further, may we suggest a 2010 study done by EPFL (European Professional Football League) entitled "European Financial Solidarity at Leagues and European Level", which among other things, makes an analysis of the criteria used in all major European Leagues. Some have possibly changed in the meatime, but you may however get a rough idea of the topic.