Real, Barca hegemony threatens La Liga TV
MADRID (Reuters) -- Monday's "Clasico" between La Liga giants Barcelona and Real Madrid serves as a timely reminder of the growing dominance the world's richest two clubs exert over their domestic league.
That strength is derived mainly from their stranglehold over about 600 million euros ($799 million) in annual revenue from audiovisual rights, which, in turn, is due to Spain's system of clubs negotiating with TV companies individually rather than collectively as in most rival European leagues.
Real and Barca, who meet at the Catalan team's Nou Camp stadium for a match that will be watched by millions around the world, suck in about half the total, which helps them pay the astronomical transfer fees and wages for the best players.
The other La Liga clubs are left to thrash out their own deals as best they can and many have tumbled into the red and even administration as a result. They have no real hope of winning the league.
An agreement brokered this month with 11 other top-flight sides on sharing some of the TV cash from 2015 is likely to cement Real's and Barca's advantage while helping the others only marginally, analysts said.
It will be harder to market the TV rights for a league of 20 in which only two teams battle for the title each season and over the longer term Real and Barca will lose out along with their Spanish peers, they added.
Under the deal, Real and Barca would get 34 percent of TV income negotiated in a new collective deal from 2015, with 11 percent for Valencia and Atletico Madrid and the rest shared out based on positions in the league standings.
Angel Barajas, associate professor of financial management at the University of Vigo, noted that conditions in the crisis-hit TV market may have changed significantly by 2015 and the clubs' hopes of reaping an extra 200 or 300 million euros may be optimistic.
"Given the lack of competitive balance it could be that La Liga is not sufficiently attractive to promote a bidding war for the rights," Barajas told Reuters.
"If things carry on the way they are, interest in La Liga will diminish and, as a result, income from TV."
The six La Liga clubs who did not sign up to the agreement -- Sevilla, Villarreal, Athletic Bilbao, Espanyol, Real Zaragoza and Real Sociedad -- back an alternative system more like that used in the English Premier League, where the gap between rich and poor is much smaller.
A study published in May by Sport+Markt, a consulting firm, showed Real and Barca earned almost 19 times more from TV deals than the smallest clubs in the top division, by far the biggest gap among European leagues.
The richest clubs in the Premier League, which generates just over a billion euros a year in broadcast revenue, earned about 1.7 times more than their smaller rivals.
"In the last five years the percentage of league titles going to the big two was 100 and in future years there will be no chance for any of the other clubs to aspire to competing for the title with Real Madrid or Barcelona," Sevilla president Jose Maria del Nido said last week.
"This is something that just does not happen in our European neighbours," he added. The six clubs have also said they will take the case to Spain's competition authority.
Their alternative proposal would see 40 percent of income being shared equally and 60 percent distributed according to criteria such as results on the pitch and audience share.
Jose Maria Gay, a professor of accounting and soccer finance expert at the University of Barcelona, said Spain had turned into another Scotland with two teams -- Celtic and Rangers in the SPL -- handing out regular thrashings to the also-rans.
"The clubs who have joined the accord with the big two are signing away their ability to grow and surrendering the league to the two most powerful clubs," Gay told Reuters.
"Over the long term, the Spanish league will get weaker and people will lose interest. It's already very hard to sell the La Liga product around the world. It will be a sad future for the league if things are not sorted out."
Real Mallorca was one of the club's that signed up to the Real-Barca agreement.
Utz Claassen, a German businessman and management professor who recently bought a stake in the Balearic Islands club, acknowledged the distribution of TV income in Spain was particularly uneven but said any movement toward a fairer system was welcome.
"In some cases in life, evolution is better than revolution and therefore an agreement that goes in the right direction is better rather than worse," he told Reuters.
"In the long term, a more fair and more even distribution of TV revenue is also in the best interests of Real Madrid and Barcelona.
"Competition is important for yourself to stay world class so I think if the competition became too uneven and too easy for Barca and Madrid it would ultimately not help them but jeopardise their international competitiveness."