La Liga’s big challenge
Posted on December 11, 2018
SPAIN’s La Liga may have lost Cristiano Ronaldo to Serie A, but it is well placed to deal with the inevitable transition that will take place once the other member of the celebrated duopoly, Lionel Messi, also moves on.
KPMG Football Benchmark’s latest paper looks at how the league has been internationalising itself to broaden the appeal of Spanish football. Ronaldo and Messi have dominated La Liga for the best part of a decade in what has been a golden era for Spanish football. But while Spain’s clubs and national team have been phenomenally successful, there is a certain irony that the most popular and idolised players came from from Portugal and Argentina respectively.
La Liga has, unashamedly, used the rivalry between Ronaldo and Messi to sell its global franchise.But the league has always been aware there would come a time when its prize assets would come to the end of their playing careers. In the aftermath of CR7’s departure the league’s president, Javier Tebas, has openly stated that Ronaldo’s move has not affected La Liga as much as it would have done a few years earlier.
KPMG suggests La Liga has had no small amount of foresight: “Aware of the passing of time and to make its core offering more marketable, La Liga has attempted to internationalise itself and harness new technologies to make the competition more attractive to the current generation, across all continents. Moreover, the success La Liga has had in securing more favourable broadcasting deals suggests sponsors and business partners have long since looked beyond the current era.”
La Liga, despite trailing behind the Premier and Bundesliga in terms of match attendances, has their second highest level of TV income. In six years, La Liga doubled its broadcasting revenues from EUR 729m in 2011-12 to EUR 1.5 bn in 2016-17. While this is an impressive trajectory, La Liga’s revenues are still less than half those generated by the Premier League.
The latest agreement, struck with Spanish telecommunications company Telefonica for the period 2019-2022, totalled EUR 3.4 bn, at EUR 1.14bn per season a 15% increase on the previous cycle. At the same time, the league renewed its contract with Medipro for the sale of international broadcasting rights. This five-year deal totalled EUR 4.5 bn, a 30% rise on the last three-year period. La Liga’s attractiveness to broadcasters has also manifested itself in the form of a ground-breaking transaction with Facebook, which includes the screening of 380 matches in India, Pakistan, Sri Lanka and other parts of Asia.
Asia is an important part of an expansion narrative for La Liga aimed at growing revenues, increasing sponsorship and media rights outside its traditional marketplace. The league is also securing partnerships that can develop youth academies, coaching programmes and marketing agreements.Beyond Asia, the league has announced a 15-year joint partnership with Relevant Sports to promote football in North America, which includes the controversial ambition of playing La Liga matches in the US, making it the first of the major football leagues to take its primary product abroad. At present there are hurdles, not least the resistance of the Spanish Football Federation, but support for the venture includes the backing of Gianni Infantino, the FIFA President.
KPMG said La Liga’s drive for technical reinvention has been an important part of the league’s growth strategy. This has included a ground-breaking project called the Global Network Programme, which uses young people with a high level of technical expertise to spread the La Liga word and connect – through social media – with the most active groups.
KPMG concluded that La Liga has the momentum to continue growing in the post Ronaldo-Messi period. “With clubs of the profile and size of Real Madrid, Barcelona and Atletico Madrid, La Liga’s competitiveness on the field of play appears to be assured.As the search for successors to Ronaldo and Messi gets underway, La Liga’s challenge is to retain the glamour, the economic power and investor interest to keep pace with other major leagues.”
To see Football Benchmark’s full report, click here