Market Insight

Spanish government decrees collective sale of La Liga TV rights

May 01, 2015  | Subscribers Only

Tim Westcott Tim Westcott Director – Research and Analysis, Programming, IHS Markit

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Spain's Council of Ministers this morning published a Royal Decree which will require football clubs in the top two divisions of la Liga to sell their TV rights collectively rather than, as they do at present, negotiating deals individually. The new law will take effect from the 2016/17 season, although it may be brought forward to 2015/16 if clubs which have already signed agreements are able to execute escape clauses.

The new law is designed to close the revenue gap between the biggest clubs in Spain - in particular Real Madrid and FC Barcelona - and smaller clubs by ensuring a fairer distribution of rights sales. Some 90% of revenues will be shared between the first division clubs, with the second division taking 10%. Half of the first division clubs' share will be divided equally between the 20 clubs, with the remainder divided up on a weighted basis according to results over the past five seasons, together with the club's membership and attendances.

Our analysis

The law looks certain to benefit the smaller clubs in Spain's first division by giving them a larger share of the rights revenue, but may only make a small dent in the revenues of the top two clubs - provided they maintain their success on the pitch. Less clear is what the ramifications of a more stable rights licensing process will be on the Spanish pay TV market.

Following the approval of its full takeover of Canal Plus, Telefónica will be the undisputed leader in the pay TV market. In anticipation of the takeover, the telco has already signed a rights agreement with FC Barcelona for the 2015/16 season, as well as three other Primera Division clubs.Under the conditions imposed by regulator CMNC, Telefónica will have to make its premium sports channels available to other platforms. Under a three-year agreement between Mediapro and the outgoing Canal Plus owner Prisa ending this summer, one match per week is exclusive to the Canal Plus 1 channel, another eight matches air on Canal Plus La Liga and Mediapro’s Gol TV channel, with one other match on free TV owned by Mediaset.

In theory, a single operator will be able to acquire exclusive rights to La Liga, although much will depend on how the league chooses to sell the rights from 2016/17. Certainly, Gol TV looks increasingly exposed. According to the CNMC, Gol TV's subscriber base fell for the second successive year to 231,400 at the end of 2014, compared to 1.8 million pay TV subs for Telefónica and 1.7 million for Canal Plus. 

Geography
Spain
Organization
Mediapro Telefonica
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