TV Rights in Europe: here’s how the Big-5 divide E3,6 billions

Filed under: Club,TV Rights,Highlights,TB Report |

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.

 

Diritti TV Big 5 - 01 divisione fra Leghe

 

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).

 

 

 

Diritti TV Big 5 - 03  valori per squadra

 

 

  • Spain basically applies the "law of the jungle" Real Madrid and Barcelona share out 50% of the total TV rights, leaving the other teams the breakdown of the rest;
  • in Italy, from 2011/12,  money is assigned on the basis of multiple criteria designed to give some advantage to the small-medium, while maintaining a sort of status quo ("everybody happy" criteria);
  • England, Germany and France, albeit with different criteria, tried to get a much more equitable distribution, conditioned by the actual results of the Clubs.

 

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.

 

 

 

Diritti TV Big 5 - 04 first to last

 

 

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.

 

Diritti TV Big 5 - 05 quota prima e prime 5

 

 

 

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.

 

 

 

England (2012-13)

 

 

Diritti TV Big 5 - 06 Inghilterra

 

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"

  • 50% in equal parts;
  • 25% based on the finishing position in the ranking;
  • 25% based on the number of times a game has been broadcast on television (there is no direct match for all).

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.

 

Germany (2013-13)

 

 

Diritti TV Big 5 - 07 Germania

 

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:

  • for each year are awarded from 36 to 18 points for each of the teams in Bundesliga 1 and 18 to 1 point for those of Bundesliga 2;
  • points are multiplied by a factor that increases the annual value of the most recent season (4 for one year, 3 for the previous one, etc.).
  • at the end of this calculation shows a total ranking of four, used to allocate the share of rights according to the "2:1", that is, providing that the winner is entitled to have twice the last (ie 5.76 % of the total as against 2.88%).

 

The international share, however, is reserved for the Bundesliga teams 1 and is divided as follows:

  • 63.3% of the total based on the position in the ranking (assigning the 14.5% in the first, 11, 8% in the second, 9.2% in the third, 6.6% in the fourth and fifth and then dividing the remaining 51% among the other 11 teams);
  • the remainining 37.7% is split between the teams who took part in UEFA competitions the previous five years on the basis of contributions actually given by each of them the creation of the national UEFA coefficient (ie the one that determines the number of teams participating in CL and EL).

The ratio of first-to-last is 2.11 and the top ten teams get about 65.4% of the total budget.

 

 

France (2012-13)

 

Diritti TV Big 5 - 08 France

 

 

TV rights are negotiated centrally and divided according to three main criteria:

  • a first part (approximately 50%) in equal parts among all the participants in the Ligue 1;
  • a portion (approximately 21%), on the basis of the television audience;
  • the last part is instead attributed on the basis of sport merit with a strong impact of the result of the last season (25%) and, to a lesser extent the aggregate, than the previous four seasons.

The first-to-last ratio is 3.71 and the top ten teams get about 66.6% of the total budget.

 

Spain (2011-12)

 

 

Diritti TV Big 5 - 09 Spagna

 

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)

 

Diritti TV Big 5 - 10 Italia

 

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.

 

 

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