State of La Liga

[IrvDizzle]

don't waste your time, J ... you've made a great argument. as a fellow economist I love it. if someone cannot understand the difference between an asset's (or in this case, player's) book value and market value, and furthermore, cannot understand why it is a problem for someone like Dyer to be "worth" so much then it's a lost cause. throwing in net income to revenue and PPP and other ratios will just confuse the issue more.

I get the point about TV revenue increasing smaller clubs' revenue by 100%, but the thought that said smaller teams would use that revenue efficiently is a crap shoot. Just look at Real Betis or Leeds. Now that's not to say that they don't deserve a chance to use that money, but I thought the problem here was figuring out a way to stop La Liga from turning in to the SPL.

 

[House of Flies]

don't waste your time, J ... you've made a great argument. as a fellow economist I love it. if someone cannot understand the difference between an asset's (or in this case, player's) book value and market value, and furthermore, cannot understand why it is a problem for someone like Dyer to be "worth" so much then it's a lost cause. throwing in net income to revenue and PPP and other ratios will just confuse the issue more.

I get the point about TV revenue increasing smaller clubs' revenue by 100%, but the thought that said smaller teams would use that revenue efficiently is a crap shoot. Just look at Real Betis or Leeds. Now that's not to say that they don't deserve a chance to use that money, but I thought the problem here was figuring out a way to stop La Liga from turning in to the SPL.

Thank you Irvin. Arguments here calling for an equal share of TV money does not make any sense to me because they are asking Real and Barca to reduce their operating budgets by 100m, putting their domestic TV revenue/operating budget ratio to less than 0.1. Would that be fair for Real or Barca who have actually made La Liga a marketable brand that was previously trailing to the likes of Serie A and EPL? Its like biting the hand that is feeding you because Real and Barca going down would be the worst thing that could happen to La Liga as Asian markets will be disinterested in watching Real or Barca lite. Domestic issues are bound to arise as spaniards have Barcelona or Real as their primary or secondary teams due to the past political scenarios which isnt the case in England.

La Liga wouldnt turn into SPL and one reason for that is- a strong Barcelona or Real continually provide the rest of the league with the promise of qualifying for the Champions League. Participation in Champions league alone nets you 30m euros. That is substantial if teams are bitching about 5-6m euros. SPL does not offer that chance because only the champion gets that position whilst La Liga offers the chance for 2 unlocked spots. Its even better than EPL where team like Man City had to spend close to 1.5b pounds to break the top 4 and get itself a CL spot. As, I have already showed previously, EPL system did not favor the smaller clubs because they always found themselves not competing for the 30m cashpot. This cash injection is vital for a team with a smart management (Valencia of today) to put themselves on path to prosperity and later, challenging Real and Barca for the title. Real and Barca are spending ridiculously but they often pay inflated fees to their La Liga counterparts whilst other 18 clubs are not. Real and Barca are sharing the wealth, involuntarily. This also undermines Barcelona and Real because 'there is nothing like free lunch' and thus, bad transfers lead to higher debt which is the case as already seen in motion. Then teams like Sevilla and Villarreal buy these flops on bargain basement fees and wages, improving the quality of the teams.

Why Real and Barcelona are running away with the league right now is due to Real buying marketable players to maximise its commercial revenue (which is working) and Barcelona having the best generation of La Masia graduates coming through. Also they have the best coaches in the world (bar Man Utd). These factors may not last for a long time.

 

[IrvDizzle]

when I say SPL, I mean a duopoly at the top.

The reason why the gap is so big b/w FCB and Real is because of cause and effect:

cause: FCB is one of the greatest teams of all time.
effect: Real, as sworn enemies, cannot allow that to happen. So they have decided to use their massive commercial appeal and brand to build an army worthy of Mordor, in order to stop FCB. Valencia, Sevilla, Villarreal cannot hope to compete with that, unless they are bought out by billionaires. it is that simple.

FCB will continue to dominate thanks to: 1. supposedly more shrewd purchasing (Asexis and Cesc deals were really well done) 2. La Masia is a conveyor belt 3) There will, from 2006 onwards, continue to be a major emphasis on La Masia to continue to produce top-level talent (thus adding to a culture that is already steeped in success). Nothing is going to stop FCB from achieving a high level of play except: 1. injuries (crap shoot) 2. complacency (this is dependent on #3) 3. hiring a retarded manager (mmmmmmm ... I dunno who could replace Pep). which means that nothing is going to stop Real from constantly spending money to improve their band of thugs and alleged superstars. which means that the gap will continue to rise. which means that La Liga is going to have to do a better job of 1) reducing the debt of the "2nd tier teams" 2) marketing said "2nd tier teams" so that 3) foreign investment can buy in to La Liga and help teams compete with Real and Barça.

in the mean time, article from ESPN Soccernet: Are Real and Barça killing La Liga?

 

[House of Flies]

when I say SPL, I mean a duopoly at the top.

The reason why the gap is so big b/w FCB and Real is because of cause and effect:

cause: FCB is one of the greatest teams of all time.
effect: Real, as sworn enemies, cannot allow that to happen. So they have decided to use their massive commercial appeal and brand to build an army worthy of Mordor, in order to stop FCB. Valencia, Sevilla, Villarreal cannot hope to compete with that, unless they are bought out by billionaires. it is that simple.

FCB will continue to dominate thanks to: 1. supposedly more shrewd purchasing (Asexis and Cesc deals were really well done) 2. La Masia is a conveyor belt 3) There will, from 2006 onwards, continue to be a major emphasis on La Masia to continue to produce top-level talent (thus adding to a culture that is already steeped in success). Nothing is going to stop FCB from achieving a high level of play except: 1. injuries (crap shoot) 2. complacency (this is dependent on #3) 3. hiring a retarded manager (mmmmmmm ... I dunno who could replace Pep). which means that nothing is going to stop Real from constantly spending money to improve their band of thugs and alleged superstars. which means that the gap will continue to rise. which means that La Liga is going to have to do a better job of 1) reducing the debt of the "2nd tier teams" 2) marketing said "2nd tier teams" so that 3) foreign investment can buy in to La Liga and help teams compete with Real and Barça.

in the mean time, article from ESPN Soccernet: Are Real and Barça killing La Liga?

I agree with you. Especially your point regarding other clubs.

http://www.elpais.com/articulo/deportes/bipartidismo/dispara/Liga/elpepidep/20110831elpepidep_2/Tes

Here is a very good article regarding the points that we have made.

 

[Guardian]

You do realise that even EPL clubs dont do that. Wolves earned 30m and Man Utd got 51m so equitable balance would never occur. Also, the current TV deal is based on the basis of popularity hence At. Madrid and Valencia got the next 2 shares. Furthermore, if everyone doubled their TV revenues, then wages would subsequently increase because of inflation. You are continually assuming that wages and other variable costs will be fixed hence your argument regarding inhaling easier is ridiculous because Everton, a top half club, is unable to sign anyone even with a fairer TV deal because they dont have an underwriter.

Ratio indicates that TV revenues are not disproportionate to their operating budget for all clubs. If TV revenues were less than 20% of a given team, then one could argue for a fairer distribution of TV revenue because the club had done everything to maximize other streams. Because if you were to read Swissramble, you would get enlightened how damaging can TV revenues to operating budget ratios could be damaging to clubs. Equal sharing would severely damage Barcelona and Real Madrid on a global circuit, significantly cutting their competitiveness in CL. Furthermore, loss of TV revenues would lead to increase in ticket prices in order to improve the matchday stream. Would that be fair on Barcelona and Madrid fans?

Ouch, the poor Barca fanboy, the English clubs significantly cut their competitiveness in the CL too, but they can deal with that, so what's wrong with Barca and Real? Are they afraid or smth? There is a reason why the EPL is the most successful league financially and there is a reason why they have underwriters. Because their income is predictable and fixed, MORON. Can't you see that? CRY me a river. Oh no, probably it's everything about freemasons and a huge conspiracy theory that serves the English clubs! BHAHAHA What an unbelievable piece of dumbfuck.

All the numbers and articles you have posted imply that a fair share will boost the smaller clubs and radically will change the league. I just couldn't believe that you're such an imbecile to not see that. Take Sporting Gijon for instance. Add the extra 15M from TV revenues, and you can see how their budget will exceed their debts.

BTW Everton's case is different, simply because they have lots of well paid stars like Fellaini, Heitinga, Arteta, and midtable Spanish clubs can only dream about them. They policy s different, they rather prefer to pay the high wages of Arteta, Fellaini and Heitinga, rather than dealing with underwriters. Even without underwriters they signed expensive players in the past. Their policy is just different.

anyway, keep making self a smart imbecile. And then put the blame on the English for having the most successful league and fairly more competitive than the joke that La Liga has become (+25 points between the second and the third team LMAO) Who shat in my pants?

EDIT: I meant Osasuna, Gijon wasn't a good example

 

[Guardian]

when I say SPL, I mean a duopoly at the top.

The reason why the gap is so big b/w FCB and Real is because of cause and effect:

cause: FCB is one of the greatest teams of all time.
effect: Real, as sworn enemies, cannot allow that to happen. So they have decided to use their massive commercial appeal and brand to build an army worthy of Mordor, in order to stop FCB. Valencia, Sevilla, Villarreal cannot hope to compete with that, unless they are bought out by billionaires. it is that simple.

FCB will continue to dominate thanks to: 1. supposedly more shrewd purchasing (Asexis and Cesc deals were really well done) 2. La Masia is a conveyor belt 3) There will, from 2006 onwards, continue to be a major emphasis on La Masia to continue to produce top-level talent (thus adding to a culture that is already steeped in success). Nothing is going to stop FCB from achieving a high level of play except: 1. injuries (crap shoot) 2. complacency (this is dependent on #3) 3. hiring a retarded manager (mmmmmmm ... I dunno who could replace Pep). which means that nothing is going to stop Real from constantly spending money to improve their band of thugs and alleged superstars. which means that the gap will continue to rise. which means that La Liga is going to have to do a better job of 1) reducing the debt of the "2nd tier teams" 2) marketing said "2nd tier teams" so that 3) foreign investment can buy in to La Liga and help teams compete with Real and Barça.

in the mean time, article from ESPN Soccernet: Are Real and Barça killing La Liga?

Well that article and the quote of Villarreal's boss says everything indeed

 

[oz187]

The other problem with asking for equal share is that it does not take account of the fact that Barca and Real are competing on a European level. Currently they get around 25% of the TV revenue each, with the new deal that is going to be reduced to 17.5% each. If you say equal share that goes down to 5% each, which even the EPL doesn't do. And considering the greater amount of revenue that they generate would be completely unfair and would hamper La Liga success in the Champions league.

The big teams, the successful teams always get more TV share. The current system is unsustainable, but things are already moving in the right direction. 18 of the clubs agreed to the deal, there's only 2 dissenters. Sevilla and Villarreal presidents are just overhyping the issue for their own selfish gain, not the interests of the league. The real problem is that clubs have been badly mismanaged(Valencia sacking Flores when he was doing a great job, and also the disaster of trying to build a new stadium).

 

[House of Flies]

Hey Irv, how do you explain to a village idiot that a loss of 110m Euros (approx 22% of their operating budget) is something that Real and Barcelona would accept so that they can take one for the team?

I wonder if he even gives 22% of his own net income to a charity in order to benefit the less fortunate. And no, whores do not count.

Also Barcelona were to give away 110m euros, then who would you give away?

Messi, Pedro and Cesc

Or

Pique, Xavi and Iniesta

cause yah, books need to be balanced in terms of wages as well.

 

[IrvDizzle]

Well that article and the quote of Villarreal's boss says everything indeed

it does, and if you think revenue sharing TV money is going to fix the issue, then you would also think that putting a bandaid on a broken leg would work too. Furthermore, without billionaire money, Manchester United would have won every title from 2006 onwards and would be running away with the title this year too. The article also showed how a team (Zaragoza) is €90m in debt, but splashed out €9m for a goalkeeper.

if anything, FCB and Real are pushing other teams further in to the abyss of red ink. La Liga needs to enact rules forcing a balanced budget for all teams, which includes a provision whereby a club in debt must pay down a certain % of their debt with the end goal to have all teams near 0 debt. I guess redistributing tv money will help with that, but not if clubs will just use that money to spend more on players who may or may not be successful (and lets face it, if clubs are going to spend money that they don't have, if you think that they'll use the TV money efficieintly, well, bandaid on a broken leg!!). that's the biggest advantage that the EPL has over La Liga. That's the only advantage that the EPL has over La Liga, but it is a major advantage because it makes buying a club more attractive, and you can just spend money on players.

because let's be honest, as great as the "revenue sharing" (it's not true revenue sharing) is in the EPL, if not for oil money, ManUtd wins every title from 2006, and probably every title over the next 10 years. At least Real can give FCB a run for the Liga and CL, if no oil money then:

the last time Chelsea won a League title was in the 50s me thinks? well it's still been that long, cuz Roman bought Valencia instead of Chelsea
ManCity is still the Don Swayze to Patrick, cuz the Sheik bought either Atl Madrid or Espanyol.
Arsenal is still imploding due to poor Arsene Wenger
Liverpool are still trying to recover from Rafa's rant (and maybe the Red Sox have bought Sevilla or Villarreal)

debt reduction is the most important thing for Liga teams right now. if they don't have the financial discipline to keep their books in order, then they cannot be trusted with more revenue (unless there is a change of management).

 

[House of Flies]

it does, and if you think revenue sharing TV money is going to fix the issue, then you would also think that putting a bandaid on a broken leg would work too. Furthermore, without billionaire money, Manchester United would have won every title from 2006 onwards and would be running away with the title this year too. The article also showed how a team (Zaragoza) is €90m in debt, but splashed out €9m for a goalkeeper.

if anything, FCB and Real are pushing other teams further in to the abyss of red ink. La Liga needs to enact rules forcing a balanced budget for all teams, which includes a provision whereby a club in debt must pay down a certain % of their debt with the end goal to have all teams near 0 debt. I guess redistributing tv money will help with that, but not if clubs will just use that money to spend more on players who may or may not be successful (and lets face it, if clubs are going to spend money that they don't have, if you think that they'll use the TV money efficieintly, well, bandaid on a broken leg!!). that's the biggest advantage that the EPL has over La Liga. That's the only advantage that the EPL has over La Liga, but it is a major advantage because it makes buying a club more attractive, and you can just spend money on players.

because let's be honest, as great as the "revenue sharing" (it's not true revenue sharing) is in the EPL, if not for oil money, ManUtd wins every title from 2006, and probably every title over the next 10 years. At least Real can give FCB a run for the Liga and CL, if no oil money then:

the last time Chelsea won a League title was in the 50s me thinks? well it's still been that long, cuz Roman bought Valencia instead of Chelsea
ManCity is still the Don Swayze to Patrick, cuz the Sheik bought either Atl Madrid or Espanyol.
Arsenal is still imploding due to poor Arsene Wenger
Liverpool are still trying to recover from Rafa's rant (and maybe the Red Sox have bought Sevilla or Villarreal)

debt reduction is the most important thing for Liga teams right now. if they don't have the financial discipline to keep their books in order, then they cannot be trusted with more revenue (unless there is a change of management).

thank you. good to see this.

i certainly dont want to see the massive loss of players that would come with the decrease of 110m.

 

[IrvDizzle]

Hey Irv, how do you explain to a village idiot that a loss of 110m Euros (approx 22% of their operating budget) is something that Real and Barcelona would accept so that they can take one for the team?

I wonder if he even gives 22% of his own net income to a charity in order to benefit the less fortunate. And no, whores do not count.

Also Barcelona were to give away 110m euros, then who would you give away?

Messi, Pedro and Cesc

Or

Pique, Xavi and Iniesta

cause yah, books need to be balanced in terms of wages as well.

no whores, huh. mmmmmm ... if there was no CL (competition from outside villiages for a valuable resource only available once a year) then it would be easier. but the CL is what trumps everything. Real and FCB need to be competitive in the CL (FCB because they got a taste of the cocaine and they want more, Real because they have always been obsessed with it) and they would never, EVER, EEEEEEEEEVVVVVVVVVVEEEEEEEEERRRRRRRRRRRRRRRRRRRRRRRR willingly give up 22% of their budget. Because then you might as well hand the CL to United one year and Chelsea the following year.

because I don't see how Tottenham, Everton, Aston Villa, and Newcastle have benefited from the EPL's revenue sharing laws. I see how City and Chelsea have, and that has had nothing to do with the EPL TV money.

 

[House of Flies]

no whores, huh. mmmmmm ... if there was no CL (competition from outside villiages for a valuable resource only available once a year) then it would be easier. but the CL is what trumps everything. Real and FCB need to be competitive in the CL (FCB because they got a taste of the cocaine and they want more, Real because they have always been obsessed with it) and they would never, EVER, EEEEEEEEEVVVVVVVVVVEEEEEEEEERRRRRRRRRRRRRRRRRRRRRRRR willingly give up 22% of their budget. Because then you might as well hand the CL to United one year and Chelsea the following year.

because I don't see how Tottenham, Everton, Aston Villa, and Newcastle have benefited from the EPL's revenue sharing laws. I see how City and Chelsea have, and that has had nothing to do with the EPL TV money.

Thank you. But yeah, EPL doesnt share it equally either. It only shares 50% of domestic and 100% of international rights equally. Rest are based on popularity and performance-- favoring big clubs.

Also, its not like you are giving to money to someone responsible because responsible people dont buy something when they know that they cant pay for it (aka Zaragoza for Angel Lafita).

 

[IrvDizzle]

Thank you. But yeah, EPL doesnt share it equally either. It only shares 50% of domestic and 100% of international rights equally. Rest are based on popularity and performance-- favoring big clubs.

oooo really? popularity and performance. interesting. that's not revenue sharing then, that's just like giving the popular kids preferential treatment. most interesting.

Also, its not like you are giving to money to someone responsible because responsible people dont buy something when they know that they cant pay for it (aka Zaragoza for Angel Lafita).

what are you talking about? there is nothing wrong with that. it's not like we're in the midst of a financial crisis because people acted like that to create a real estate bubble or anything. I mean I'm sure that if the people who were buying houses that exceeded their means would have been more responsible if they had more money. that's logical right?

 

[House of Flies]

Yep. Club popularity, which dictates how many times a viewer wants to see their game is nicely termed into facilities fees.

Here's the breakdown of the deal

The League's TV money is allocated in three ways: 50 per cent is shared equally between the 20 clubs, 25 per cent is spent on prizemoney depending on finishing position and 25 per cent is used for "facility fees" depending on how many of a club's games are televised live.

Its not really that much fair cause top club will get 80m pounds a season and relegation fighters will make 39m pounds. Barcelona and Real Madrid had given up 50% of the total revenue to 34%. With more money coming through, I dont doubt that Barcelona and Real will agree to less percentage than that if essentially, it would mean receiving the same amount of coin.

 

[DucdeOrléans]

People are overreacting as usual.

A more equal TV revenue would improve the competitiveness of the league although not change the superiority of FC Barcelona and RM.

This can also be witnessed by the PL, where the top 4 (5) are way above every other team when it comes to earnings despite the more equal TV revenue.

People tend to forget that there have been 5 different winners in the last 15 years in La Liga, as many as in Serie A and the Bundesliga and more than in PL (only Ligue 1 have had 7 different winners in the last 15 years)

It is also not more than 4 years ago that Sevilla of all teams were a victory away from being crowned as La Liga champions. Nobody talked about equal TV revenues back then.

The last 3 La Liga seasons have been marked by arguably one of the best football teams ever (also dominant in the CL) and a team, which has spend more money than anyone else in the history of world football. Both those clubs also happens to have the highest revenues of all teams. No wonder that they dominate the league.

But the league will gradually change (and improve). Already seen by Málagas presence (owned by Qataris). Getafe will soon follow as well (Dubai-based Royal Emirates Group will take over the club from July 1, 2012 . It could be way worse.

Put the two best teams in Europe in the lot (Barca and RM) together with potential big spenders on the long run, Málaga and Getafe, apart from the usual suspects Sevilla, Atletico Madrid, Valencia and Villarreal and you have a very interesting league. Let us also not rule out that more clubs will be bought in the future. Especially if the income from TV revenue will be adjusted further.

The fixture list (changing the kick off times and not having more than 2 matches played at the same time) to attract the Asian market is also a step forward.

Again, the situation could be way worse but people tend to overreact as always.