War economy in soccer

Javier Tebas will be seen today by videoconference with the First and Second clubs, separately, within one of the hottest Division Boards of which he will direct in his seven years in office. The stakes are high. LaLiga will discuss with them the economic crisis that is plaguing Spanish football as a result of the coronavirus crisis and which, for the moment, has already given rise to the fact that four professional clubs (Barça, Atlético, Espanyol and Alavés) have requested an ERTE since several more, five according to AFE, double according to the employers, are about to cling to them to offset losses that could reach 678 million. The meeting will try to establish a common strategy regarding temporary layoffs and salary readjustments (payrolls represent 50% of budgets), with proposals even retroactive. Returning to work and rearranging the calendar, being important, are now secondary issues.

The panic in the clubs is enormous to the point that, in part, many efforts have been stopped until they have an exact photograph of the crisis so as not to enlarge the hole that is causing inactivity in budget items that, according to specialized portals in the industry of sport like Palco23, it represents 51% of the income. They expect gestures from footballers who, until now, and unlike other countries, have not arrived or are delaying. For this reason, LaLiga, as if it were a bank, has entered each club, in advance, the third payment of television income corresponding to the 2019-20 season. Almost 500 million of the 1,915 that he hopes to distribute between now and the end of the season if the remaining 11 games are played and it is not necessary to renegotiate the more than one hundred audiovisual contracts that it has signed by the world.

Despite the aid, many entities (especially Second) have self-imposed containment since that payment (57% is for national rights and 43% for international rights) it is due to future benefits not yet generated and they fear that, although it is unlikely, they will have to be returned or converted into a check for another concept if the competition is not ended.

The income that is really on the wire is the fourth and last, the summer, which is usually the most generous (about € 550M) since it is when the impact adjustment linked to the end of the course is made. A reality that also affects the LaLiga president's fees. Thebes charges, by approval of the clubs in 2018, 1.2 million net plus 250,000 euros for variables that, to a large extent, depend on audiovisual marketing that is now not insured and that no policy allowed to bind since it was a pandemic.

Every president already knows what his losses will be apart from TV, whether the League resumes or not (41 million, among the 42 clubs, for ticket offices and 88 for season tickets). Those with the most diversified income (the big ones) are the ones who will suffer the most having good merchandising and box office income. Others, with an audiovisual dependency of 70% in the budget, will suffer less if it is played. What the clubs agree on is that they already take it for granted that, in the best of scenarios, it will be played again on May 14 and that it will be necessary to compete after June 30. The presidents have internalized that there will be a League in the summer and that the next campaigns will be modified, being able to play, as they applaud, at Christmas. What they carry the worst is that the virus has reminded them that football, being important, is not essential and we have to wait.

From 840 million from 13-14 to 2,111 now?

Television rights have been key in the club economy in the past decade. Joint marketing has given Spanish football the opportunity to grow, clean up, stop owing the Treasury and invest in infrastructure. However, the fact of having based the budgets on that item makes now more than one tremble. When Thebes came to LaLiga, the clubs 840 million entered (580 for the national sale and 260 for the international one). That amount has always grown since then: 860 in 2014-15, 1,272 in 15-16, 1,624 in the following years until 1,849 in 2019 with all the final readjustments. With the latest official data (see attached table), the ceiling had not yet been reached. This season about 1,915 million will be entered if everything is played, but the most optimistic forecasts of months ago pointed to 2,111. Each club contributes 3.5% to the Compensation Fund for those descended to Second and 2nd B.