Catalans threaten a billion-euro business

Political uncertainty has interrupted negotiations over the sale of television rights to matches in Spain’s La Liga.

The Spanish government on Saturday restricted Catalonia’s autonomy. On the other hand, local politicians are speaking out more and more openly about declaring independence. This political crisis on the Iberian Peninsula is also having a significant impact on Spanish football. It has affected negotiations over the sale of international television rights, which are set to be the most lucrative in La Liga’s history. The president of the top division, Javier Tebas, admitted that, due to the Catalonia situation, they decided to put the talks on hold. “When you sell something, you need to know that it’s the right time. We decided that now is not the moment to sell our television rights,” Tebas said during the World Football Summit event in Madrid.

Two billion at stake
At the centre of the suspended talks is the pride of Catalonia, 24-time Spanish champion and five-time Champions League winner FC Barcelona. Alongside Real Madrid, the giant club built around the iconic Lionel Messi is the main driver of the growing global interest in La Liga. It is mainly thanks to them that three years ago there was a rapid increase in TV rights revenue: while the 2012–2015 period brought in €703 million, over the last three seasons the clubs have shared €1.9 billion. “They are now going to sell the rights for another three seasons starting in 2018/2019. Yet they cannot guarantee whether Barcelona will still be part of La Liga in three or four years,” Roman Krajniak, an expert in sports marketing, told the Economic Daily. From this perspective, the decision to suspend the negotiations is the right move by the league’s leadership. But it remains uncertain when, in the context of Catalonia’s independence debate, the right time will come. “Believing that the situation will improve in the coming weeks may be too optimistic. That is why buyers – the television companies – may now offer less money for the TV rights than the league’s management expects,” said Jozef Tokos, sports analyst and football agent. La Liga president Javier Tebas admitted that Barcelona’s departure would reduce the league’s total revenue by 20 percent. “But when it comes to revenue from the sale of international TV rights in particular, the percentage could be even higher,” Tokos added.

A blow to the budget
Just like resolving the political crisis, the future of Spanish league football is unpredictable. In the past decade, it has gone through several problems. During the economic crisis, banks saved clubs from bankruptcy, while debt levels reached record highs. “And only two years ago La Liga took a revolutionary step. Until then, Real Madrid and FC Barcelona sold their TV rights individually, but from the 2015/2016 season they became part of a single La Liga package,” Krajniak explained. Centralised sales helped even the weakest clubs in Spain earn more. Compared to the past, they no longer had to sell their biggest talents abroad. Their competitiveness increased, which in turn raised the quality of the entire league. “The current political uncertainty will also affect potential investors, advertising partners, and last but not least the players themselves,” Tokos noted. He was referring to the fact that for many talents, especially from South America, playing for FC Barcelona is a dream goal. Players such as Romário, Ronaldo, Ronaldinho, Luis Suárez, and Neymar have all fulfilled it. “The debate over Catalonia’s independence may cause players to question whether Barcelona is the right destination for a football career,” Jozef Tokos added.