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Spain to sell collective TV rights for Liga clubs

June 27, 2013

Spain’s government plans to push for a new law that will give the Spanish football league control over the collective sale of television rights in a move to improve club finances, collect outstanding taxes, and increase competitiveness.

Miguel Cardenal, president of Spain’s Sports Council, said on Thursday that he wants to present the new law by the end of this year to give the league more power over the individual clubs.

Currently, powerhouses Barcelona and Real Madrid earn several times more than the rest of Spain’s clubs from TV rights which they sell individually.

Barcelona and Madrid rake in a reported 140 million euros ($182 million) each from television revenues, while the next-highest earner, Atletico Madrid, makes 47 million euros ($61 million) and minnow Rayo Vallecano just 14 million euros ($18.2 million).

The two top earners have divvied up the last nine league titles between them.

Spain’s football clubs have reduced their tax debts by 80 million euros ($140 million) but still owe the tax office around 670 million euros ($874 million). Cardenal said that having the league control TV revenues would increase transparency and improve the state’s ability to collect on its tax bills.

“The centralization (of TV rights) would let the public administrations be the first to get paid,” he said. “Thirty-five percent of revenues from TV rights won’t be passed on to the clubs that can’t show they are up to date on their payments.”

Cardenal also said the government’s new plan for sustainability has set a target of reducing the debt of Spain’s football leagues from 4 billion euros ($5.2 billion) to 3 million euros ($3.9 million) by 2016.

In order to achieve this goal, Cardenal said the government’s plan called for clubs to slash their collective budget for the season from 750 million euros ($975 million) to 650 million euros ($845 million).

However, Cardenal acknowledged that the push to balance club finances would lead to more top players being sold to foreign leagues and to the widening of the competition gap between Barcelona and Madrid and all the rest.

“Real Madrid and Barcelona have a level of debt that is acceptable given their capacity to earn revenues,” he said. ”(The plan calls for) a reduction of 12-13 percent affecting most of the other teams, and some of them will say they have to sell players.”

Cardenal argued the talent drain to leagues like the Premier League, which is home to a growing number of Spanish internationals such as Fernando Torres, David Silva and Juan Mata, is the new status quo.

“We have become an exporting country,” Cardenal said. “It’s a historic change and Spanish football has to recognize it.”

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