Bloomberg News

Spain’s La Liga Chases Mediaset for TV Cash as Real Faces Freeze

February 18, 2014

The Spanish soccer league wants to charge broadcasters such as Mediaset Espana Comunicacion SA (MS) for airing match highlights in a push to increase revenue for Real Madrid, Barcelona and other teams.

The league is negotiating with the government to change legislation that allows television companies to show all league goals for free, league president Javier Tebas said in an e-mail. The value of the rights is as much as 40 million euros ($54.8 million) per year, Tebas added.

Other television companies that air highlights include Atresmedia Corp. de Medios de Comunicacion SA. The league is pushing for revenue to try to make sure Real Madrid and Barcelona don’t suffer from a freeze in the television income that helps make them the world’s richest clubs by sales, according to Catherine Davies, who covers Spanish media for London-based consultancy Sportcal.

The biggest La Liga teams won’t be able to receive more than four times as much TV income as the smallest under forthcoming legislation, Tebas said in an earlier e-mail. They currently get about 6.5 times as much. The change will see Real and Barcelona’s television income stop increasing for “a few years” as other teams catch up, Atletico Madrid Chief Executive Officer Miguel Angel Gil said.

New TV rights legislation is scheduled to be approved this year and take effect in 2015, a government official, who didn’t confirm the change, said by phone.

Illegal Streaming

The league aims to boost total television rights income to 1 billion euros from 752 million by 2017, Davies said by telephone. It is also seeking to combat illegal streaming of matches, remove a weekly game from free-to-air television, and increase sales from foreign broadcasters in Asia and South America, Davies added.

The plan to charge broadcasters for highlights was reported earlier today by El Economista newspaper.

Subscriptions to pay-per-view television stations that broadcast live soccer have declined amid the economic slump in Spain. Subscribers to Telefonica SA’s Movistar TV, which shows all Real Madrid and Barcelona’s league games, fell 26 percent to 611,251 between the end of 2011 and the third quarter of 2013, according to government data.

Real and Barcelona had revenue of 519 million euros and 483 million euros respectively for the year through last June, making them soccer’s richest clubs by sales, according to a Jan. 23 report by Deloitte LLP.

‘Significant’ Advantage

The size of their TV contracts with Mediapro, which expire next year, gives them a “significant revenue advantage” over other European clubs including Bayern Munich and Manchester United (MAN:US), Deloitte said in the report.

Real and Barcelona each had broadcast income of 188 million euros in 2012-13, while Bayern and United received 107 million and 119 million euros, respectively, according to Deloitte.

The English Premier League has had a more equal distribution of TV money since its foundation in 1992. Champion Manchester United, which had the biggest share last season, received barely 1.5 times what lowest-earning Queens Park Rangers got, according to league data.

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net


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