Top Soccer Leagues Get 25% Rise in TV Rights Sales, Report Says

Growth in television rights deals in Germany and England lifted broadcast revenues of Europe’s top five soccer leagues 25 percent to a combined 5 billion euros ($6.7 billion) a season, according to a report.

TV Sports Markets, an information provider for broadcasters and sports organizations, said in its Football Media Money League report that the latest cycle of rights sales through 2016 in England, France, Germany, Italy and Spain added 1 billion euros a season to the previous three-year period.

“League football remains the most sought-after media content in the world and all the indications are that broadcaster appetite for the sport at elite level shows no sign of diminishing,” Frank Dunne, Editor of TV Sports Markets, said in an e-mailed statement.

Demand for soccer broadcasting was underlined two days ago when BT Group Plc (BT/A) said it’s paying about 900 million pounds ($1.44 billion) for exclusive three-year U.K. live rights for the Champions League and Europa League from 2015-18. The deal is worth worth more than double the current arrangement with British Sky Broadcasting Group Plc and ITV Plc, the British Broadcasting Corp said. Sky said BT’s bid was “far in excess” of its own valuation.

England’s Premier League generates 2.2 billion euros a year in domestic and international television rights sales, more than double the 975 million euros earned by second-ranked Italy’s Serie A, according to the TV Sports Markets report.

Bundesliga Rights

While the German Bundesliga’s rights sales of 541 million euros per season is the lowest of the five leagues, the 54 percent rise in its domestic contract is bettered only by the Premier League’s 63 percent jump. England’s elite competition is in the first season of a three-year agreement with BSkyB (BSY) and BT Group worth 3.02 billion pounds. The Bundesliga’s TV income will grow to 674 million euros per season from 2015, the report said.

“The domestic rights in German football have historically been low because of the lack of competition in the German pay-TV market,” Dunne said. “Only in the most recent deal, when Deutsche Telekom looked like being a genuine rival, was Sky Deutschland forced to up its price.”

Spain’s Primera Division ranked third, generating 70 million euros more than the 710 million euros made by France’s Ligue 1. The Spanish league is the only one of the five competitions which doesn’t sell its rights collectively.

Real, Barca

As a result Real Madrid and Barcelona, its two biggest teams, secure more money from television rights than rivals in other countries. Real earned a combined 178.4 million euros, about 3 million euros more than Barca, from the sale of TV rights to league, domestic cup and European Champions League matches, according to the report.

“The two Spanish clubs have benefited in recent years from strong performances in the Champions League,” said Dunne. “But their real advantage over clubs in the rest of Europe is down to the system of individual selling of media rights by La Liga clubs, which guarantees them the lion’s share of the earnings from their domestic broadcast deals.”

The arrangement also gives them an advantage when it comes to new regulations introduced by European soccer body UEFA that seek to stop clubs from spending beyond their means. According to accountant Deloitte LLP, the Spanish duo rank first and second in total soccer income, with nine-time European champion Real leading with 512.6 million euros during the 2011-12 season.

Turnover Equals Talent

“Financial fair play is predicated on the fact the teams with highest turnover will be able to spend the most on labor,” Sean Hamil, director of the University of London’s Birkbeck Sport Business Centre, said in a telephone interview. “If you’re one of the most-popular clubs and you’re able to sell your own broadcasting rights you’ll have higher turnover.”

Collective selling still has its benefits, according to Hamil, as seen in the success of the Premier League, where champion Manchester United got 20 million pounds more than the 40 million pounds paid to last-place Queens Park Rangers. More equitable distribution means that “one club can beat another on any given day,” Hamil said. Barca and Real’s TV income accounts for about half of the Primera Division’s total.

Access to the Champions League helped Italy’s Juventus and AC Milan, with 154 million euros and 124 million euros respectively, secure the third and fourth highest TV incomes for individual clubs, according to the Football Media Money League report. The teams benefited from a performance-based pay structure and a share of the TV rights payments made by broadcasters in the clubs’ home markets.

Manchester United has the most TV income among English clubs, getting 108 million euros last season, the report said. That’s 1 million euros more than Europa League holders Chelsea received.

TOP 10 SOCCER TEAMS BY TV INCOME, SEASON 2012-13
================================================

CLUB                     SALES
                    (EU MILLIONS)
 1. Real Madrid          178
 2. Barcelona            175
 3. Juventus             154
 4. AC Milan             124
 5. Manchester United    108
 6. Chelsea              107
 7. Arsenal               99
 8. Manchester City       98
 9. Bayern Munich         92
10. Paris Saint-Germain   89

To contact the reporter on this story: Tariq Panja in Rio de Janeiro at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.