Spain will not make clubs strike joint TV deals
MADRID (Reuters) -- The Spanish government will not legislate to force soccer clubs to adopt collective bargaining for audiovisual rights, according to secretary of state for sport Jaime Lissavetzky.
A battle over hundreds of millions of euros of income from TV deals escalated this month when some richer teams said they planned to create a separate first division. Poorer clubs urged the Socialist government to introduce the collective negotiation used in rival European leagues to boost their income and help them avoid insolvency.
In an interview with Reuters, Lissavetzky said there was nothing stopping clubs agreeing to strike collective deals with TV companies and it was up to them to sit down and sort out the problem themselves.
"I don't believe that you would be happy to see an interventionist government," he said. "It's an issue they have to resolve themselves, there has to be self regulation," he added. "They have to sit down at the table and work out the best model." In Spain, clubs negotiate their own deals with TV companies, unlike in the English Premier League, the German Bundesliga and France's Ligue 1, where deals are struck together and revenue shared out.
Real Madrid and Barcelona, the world's richest clubs by revenue, take half the pot, with deals worth about $188 million a season, leaving the rest, some of whom are in dire financial trouble, to fight over the scraps. Cash-strapped clubs like Valencia, Sevilla and Atletico Madrid, who should be challenging for the La Liga title, earn around 30 million euros or less a season.
The poorer clubs asked the government to include rules on collective bargaining in a sports law that is being drawn up.
Real and Barca have repeatedly said they are unwilling to accept a system of collective bargaining, arguing it will hurt their competitiveness in European competition but Lissavetzky said ideally the wealthier clubs would follow the English model. "It's important to have this concept of solidarity," he said. "If that can be achieved with agreement between all clubs so much the better."
The planned sports law will also create an independent body to control clubs' finances, with powers to punish transgressors by excluding them from competition, Lissavetzky said.
The 20 La Liga clubs had combined debt of $4.41 billion in 2008/09, up from 3.49 billion the previous season, according to a study published last week by University of Barcelona accounting professor Jose Maria Gay. Revenue growth more than halved to a tepid 4 percent, from 10 percent in the 2007/08 campaign, and operating costs rose to 1.704 billion euros, outstripping income of 1.455 billion euros by 249 million. Only Real and Barca and lowly Numancia, who were relegated, made an operating profit. "We are experiencing a global economic crisis and I believe the biggest cause was a lack of regulation of the financial sector," Lissavetzky said. "We have to learn from the subprime (mortgage crisis) and this is why there will be an independent control body that will allow clubs to take part or not take part in competitions according to the state of their accounts."
Clubs would not be allowed to spend more than about 70 or 75 percent of their income on salaries and player purchases, Lissavetzky added. According to Gay's study, Sevilla, Atletico and Valencia all spent more than 120 percent of their operating income on labor costs, which include amortization of player purchases, in the 2008/09 season.
The government also planned to change rules on going into voluntary administration, contained in the so-called "Ley Concursal", to prevent soccer clubs from exploiting them to cut their debt burden before continuing to live beyond their means, Lissavetzky said. "We don't want clubs that are badly run to be able to exploit a situation and damage others."