Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The EU State aid and Sport Saga: Hungary revisited? (Part 2)

On 18 May 2016, the day the first part of this blog was published, the Commission said in response to the Hungarian MEP Péter Niedermüller’s question, that it had “not specifically monitored the tax relief (…) but would consider doing so. The Commission cannot prejudge the steps that it might take following such monitoring. However, the Commission thanks (Niedermüller) for drawing its attention to the report of Transparency International.”

With the actual implementation in Hungary appearing to deviate from the original objectives and conditions of the aid scheme, as discussed in part 1 of this blog, a possible monitoring exercise by the Commission of the Hungarian tax benefit scheme seems appropriate. The question remains, however, whether the Commission follows up on the intent of monitoring, or whether the intent should be regarded as empty words. This second part of the blog will outline the rules on reviewing and monitoring (existing) aid, both substantively and procedurally. It will determine, inter alia, whether the State aid rules impose an obligation upon the Commission to act and, if so, in what way. More...

The Rise and Fall of FC Twente

Yesterday, 18 May 2016, the licensing committee of the Dutch football federation (KNVB) announced its decision to sanction FC Twente with relegation to the Netherland’s second (and lowest) professional league. The press release also included a link to a document outlining the reasons underlying the decision. For those following the saga surrounding Dutch football club FC Twente, an unconditional sanction by the licensing committee appeared to be only a matter of time. Yet, it is the sanction itself, as well as its reasoning, that will be the primary focus of this short blog.More...

The EU State aid and Sport Saga: Hungary’s tax benefit scheme revisited? (Part 1)

The tax benefit scheme in the Hungarian sport sector decision of 9 November 2011 marked a turning point as regards the Commission’s decisional practice in the field of State aid and sport. Between this date and early 2014, the Commission reached a total of ten decisions on State aid to sport infrastructure and opened four formal investigations into alleged State aid to professional football clubs like Real Madrid and Valencia CF.[1] As a result of the experience gained from the decision making, it was decided to include a Section on State aid to sport infrastructure in the 2014 General Block Exemption Regulation. Moreover, many people, including myself, held that Commission scrutiny in this sector would serve to achieve better accountability and transparency in sport governance.[2]

Yet, a recent report by Transparency International (TI), published in October 2015, raises questions about the efficiency of State aid enforcement in the sport sector. The report analyzes the results and effects of the Hungarian tax benefit scheme and concludes that:

“(T)he sports financing system suffers from transparency issues and corruption risks. (…) The lack of transparency poses a serious risk of collusion between politics and business which leads to opaque lobbying. This might be a reason for the disproportionateness found in the distribution of the subsidies, which is most apparent in the case of (football) and (the football club) Felcsút.”[3]

In other words, according to TI, selective economic advantages from public resources are being granted to professional football clubs, irrespective of the tax benefit scheme greenlighted by the Commission or, in fact, because of the tax benefit scheme. More...

International and European Sports Law – Monthly Report – April 2016. By Marine Montejo

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.  


The Headlines

This month saw the conflict between FIBA Europe and the Euroleague (more precisely its private club-supported organizing body, Euroleague Commercial Assets or ‘ECA’) becoming further entrenched. This dispute commenced with FIBA creating a rival Basketball Champions League, starting from the 2016-2017 season with the hope to reinstate their hold over the organization of European championships. The ECA, a private body that oversees the Euroleague and Eurocup, not only decided to maintain its competitions but also announced it would reduce them to a closed, franchise-based league following a joint-venture with IMG. In retaliation, FIBA Europe suspended fourteen federations of its competition (with the support of FIBA) due to their support for the Euroleague project.More...


The boundaries of the “premium sports rights” category and its competition law implications. By Marine Montejo

Editor’s note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an Intern at the ASSER International Sports Law Centre.

In its decisions regarding the joint selling of football media rights (UEFA, Bundesliga, FA Premier league), the European Commission insisted that premium media rights must be sold through a non-discriminatory and transparent tender procedure, in several packages and for a limited period of time in order to reduce foreclosure effects in the downstream market. These remedies ensure that broadcasters are able to compete for rights that carry high audiences and, for pay TV, a stable number of subscriptions. In line with these precedents, national competition authorities have tried to ensure compliance with remedy packages. The tipping point here appears to be the premium qualification of sport rights on the upstream market of commercialization of sport TV rights.

This begs the question: which sport TV rights must be considered premium? More...

Guest Blog - Mixed Martial Arts (MMA): Legal Issues by Laura Donnellan

Editor's note: Laura Donnellan is a lecturer at University of Limerick. You can find her latest publications here.


Introduction

On Tuesday the 12th of April, João Carvalho passed away in the Beaumont Hospital after sustaining serious injuries from a mixed martial arts (MMA) event in Dublin on the previous Saturday. The fighter was knocked out in the third round of a welterweight fight against Charlie Ward. Aside from the tragic loss of life, the death of Carvalho raises a number of interesting legal issues. This opinion piece will discuss the possible civil and criminal liability that may result from the untimely death of the Portuguese fighter.

It is important to note at the outset that MMA has few rules and permits wrestling holds, punching, marital arts throws and kicking. MMA appears to have little regulation and a lack of universally accepted, standardised rules. There is no international federation or governing body that regulates MMA. It is largely self-regulated. MMA is not recognised under the sports and governing bodies listed by Sport Ireland, the statutory body established by the Sport Ireland Act 2015 which replaced the Irish Sports Council. MMA is considered a properly constituted sport so long as the rules and regulations are adhered to, there are appropriate safety procedures, the rules are enforced by independent referees, and it appropriately administered.

The Acting Minister for Sport, Michael Ring, has called for the regulation of MMA. Currently there are no minimum requirements when it comes to medical personnel; nor are there any particular requirements as to training of medical personnel. The promoter decides how many doctors and paramedics are to be stationed at events. In February 2014 Minister Ring wrote to 17 MMA promoters in Ireland requesting that they implement safety precautions in line with those used by other sports including boxing and rugby.

Despite this lack of regulation, this does not exempt MMA from legal liability as the discussion below demonstrates.More...



Guest Blog - The Role of Sport in the Recognition of Transgender and Intersex Rights by Conor Talbot

Editor's note: Conor Talbot is a Solicitor at LK Shields Solicitors in Dublin and an Associate Researcher at Trinity College Dublin. He can be contacted at ctalbot@tcd.ie, you can follow him on Twitter at @ConorTalbot and his research is available at www.ssrn.com/author=1369709. This piece was first published on the humanrights.ie blog.

Sport is an integral part of the culture of almost every nation and its ability to shape perceptions and influence public opinion should not be underestimated.  The United Nations has highlighted the potential for using sport in reducing discrimination and inequality, specifically by empowering girls and women.  Research indicates that the benefits of sport include enhancing health and well-being, fostering empowerment, facilitating social inclusion and challenging gender norms.

In spite of the possible benefits, the successful implementation of sport-related initiatives aimed at gender equity involves many challenges and obstacles.  Chief amongst these is the way that existing social constructs of masculinity and femininity — or socially accepted ways of expressing what it means to be a man or woman in a particular socio-cultural context — play a key role in determining access, levels of participation, and benefits from sport.  This contribution explores recent developments in the interaction between transgender and intersex rights and the multi-billion dollar industry that the modern Olympic Games has become.  Recent reports show that transgender people continue to suffer from the glacial pace of change in social attitudes and, while there has been progress as part of a long and difficult journey to afford transgender people full legal recognition through the courts, it seems clear that sport could play an increasingly important role in helping change or better inform social attitudes.More...



Unpacking Doyen’s TPO Deals: The Final Whistle

Footballleaks is now operating since nearly half a year and has already provided an incredible wealth of legal documents both on TPO (and in particular Doyen’s contractual arrangements) and on the operation of the transfer system in football (mainly transfer agreements, player contracts and agents contracts). This constant stream of information is extremely valuable for academic research to get a better grip on the functioning of the transfer market. It is also extremely relevant for the shaping of public debates and political decisions on the regulation of this market. As pointed out on the footballleaks website, it has triggered a series of press investigations in major European news outlets.

In this blog, I want to come to a closure on our reporting on Doyen’s TPO deals. In the past months, we have already dealt with the specific cases of FC Twente and Sporting Lisbon, reviewed Doyen’s TPO deals with Spanish clubs, as well as discussed the compatibility of the TPO ban with EU law. In the Sporting Lisbon case, Doyen has since earned an important legal victory in front of the CAS (the ensuing award was just published by Footballleaks). This victory should not be overstated, however, it was not unexpected due to the liberal understanding of the freedom of contract under Swiss law. As such it does not support the necessity of TPO as an investment practice and does not threaten the legality (especially under EU law) of FIFA’s ban.

In our previous blogs on Doyen’s TPO deals we decided to focus only on specific deals, Twente and Sporting Lisbon, or a specific country (Spain). However, nearly six months after the whole footballleaks project started, we can now provide a more comprehensive analysis of the TPO deals signed by Doyen. Though, it is still possible that other, yet unknown, deals would be revealed, I believe that few of Doyen’s TPO agreements are still hidden. Thanks to footballleaks, we now know how Doyen operates, we have a precise idea of its turnover, its return on investments and the pool of clubs with which it signed a TPO agreement. Moreover, we have a good understanding of the contractual structure used by Doyen in those deals. This blog will offer a brief synthesis and analysis of this data.More...





Unpacking Doyen’s TPO Deals: TPO and Spanish football, friends with(out) benefits?

Update: On 14 April footballleaks released a series of documents concerning Sporting de Gijón. Therefore, I have updated this blog on 19 April to take into account the new information provided.  

Doyen Sports’ TPO (or TPI) model has been touted as a “viable alternative source of finance much needed by the large majority of football clubs in Europe". These are the words of Doyen’s CEO, Nélio Lucas, during a debate on (the prohibition of) TPO held at the European Parliament in Brussels last January. During that same debate, La Liga’s president, Javier Tebas, contended that professional football clubs, as private undertakings, should have the right to obtain funding by private investors to, among other reasons, “pay off the club’s debts or to compete better”. Indeed, defendants of the TPO model continuously argue that third party investors, such as Doyen, only have the clubs’ best interests in mind, being the only ones capable and willing to prevent professional football clubs from going bankrupt. This claim constitutes an important argument for the defendants of the TPO model, such as La Liga and La Liga Portuguesa, who have jointly submitted a complaint in front of the European Commission against FIFA’s ban of the practice.[1]

The eruption of footballleaks provided the essential material necessary to test this claim. It allows us to better analyse and understand the functioning of third party investment and the consequences for clubs who use these services. The leaked contracts between Doyen and, for example, FC Twente, showed that the club’s short term financial boost came at the expense of its long-term financial stability. If a club is incapable of transferring players for at least the minimum price set in Doyen’s contracts, it will find itself in a financially more precarious situation than before signing the Economic Rights Participation Agreement (ERPA). TPO might have made FC Twente more competitive in the short run, in the long run it pushed the club (very) close to bankruptcy.

More than four months after its launch, footballleaks continues to publish documents from the football world, most notably Doyen’s ERPAs involving Spanish clubs.More...

International and European Sports Law – Monthly Report – March 2016. By Marine Montejo

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked. 

Marine Montejo is a graduate from the College of Europe in Bruges and is currently an Intern at the ASSER International Sports Law Centre.


The Headlines

The Belgian Court of Appeal released its judgment this month regarding Doyen’s legal battle against the FIFA TPO ban. The Appeal Court confirmed the first instance decision and ruled out any provisional measures to block the ban’s implementation (for an in depth review, see our blog post). More importantly, the Court reaffirmed that Swiss based sport federations are liable in front of EU Members’ States courts when EU competition law is involved. That means the next important step for this legal battle is whether or not the European Commission is going to open a formal proceeding (Doyen already lodged a complaint) to assess the compatibility, and more importantly, the proportionality of the TPO ban with EU law. Only a preliminary ruling by the CJEU could hasten the decision if one of the European national courts, hearing a case brought by Doyen (France or Belgium), decided to refer a preliminary question.More...


Asser International Sports Law Blog | The Spanish TV Rights Distribution System after the Royal Decree: An Introduction. By Luis Torres

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The Spanish TV Rights Distribution System after the Royal Decree: An Introduction. By Luis Torres

On the first of May 2015, the Spanish Government finally signed the Royal Decree allowing the joint selling of the media rights of the Spanish top two football leagues. The Minister for Sport stated that the Decree will allow clubs to “pay their debts with the social security and the tax authorities and will enable the Spanish teams to compete with the biggest European Leagues in terms of revenues from the sale of media rights”.[1]Although the signing of the Royal Decree was supposed to close a very long debate and discussion between the relevant stakeholders, its aftermath shows that the Telenovela is not entirely over. 

This blog post will first provide the background story to the selling of media rights in Spain. It will, thereafter, analyse the main points of the Royal Decree and outline how the system will work in practice. Finally, the blog will shortly address the current frictions between the Spanish League (LFP) and the Spanish football federation (RFEF). 


I. The road to the royal decree 

The old individual selling system 

The individual selling model of media rights in Spain was adopted in the 1997/1998 season. The Spanish individualized marketing system required that the TV operators and the clubs sign individual agreements over the media rights for La Liga games. Obviously, not all the agreements were born equals. The two biggest clubs in Spain, Real Madrid and FC Barcelona, were soon deriving much more revenue from TV rights as the other clubs. Hence, it is not surprising that latter have been asking for a bigger share of the TV rights revenues since then. For the 2014/15 season, for example, Barcelona and Madrid earned 140 million € each, whereas Córdoba, Eibar and Deportivo la Coruña have only earned 17.5 million €. Even the last winner of La Liga (Atlético de Madrid) has received only 45 million € (3.1 times less than Barcelona and Madrid). Meanwhile, the overall sum paid by the operators to all the teams (MEDIAPRO Agency and PRISA Media Group) reached 742.5 million €/year for a three-year deal (2012/13 to 2014/15).[2] 

Due to the delay in approving the Royal Decree, some clubs (such as Barcelona) decided to sign an individual contract with a TV operator for the 2015/16 season. Consequently, it is unlikely that La Liga will be able to collectively sell its media rights for the next season. However, the new system should be in place for the 2016/17 season.  

Disagreements prior to the Royal Decree 

The negotiating process prior to signing the Royal Decree involved three main stakeholders: the Spanish Government (CSD –High Sports Council- and the Minister for Sport), the RFEF and, obviously, the LFP. The most difficult hurdle to overcome was the RFEF’s demand of a non-negotiable 2% share of the broadcasting revenues. Both the CSD and the LFP refused to budge and considered that the RFEF should not get more than 1%. The negotiations were especially tense as a consequence of a personal feud between the presidents of the main bodies involved.  

Why a Royal Decree? 

Notwithstanding the RFEF’s outspoken disapproval, the Royal Decree 5/2015 was adopted by the Council of Ministers on 30 April 2015 and was published in the Official Journal on the following day. In principle, a Royal Decree is only used for extraordinary and urgent matters and the Spanish Parliament must consolidate it in a law 30 days after its approval, which was done, last week. Nevertheless, one may question whether this was truly a matter of urgency requiring the introduction of a Royal decree. According to the explanatory memorandum of the Royal Decree it is justified on the basis of the public interest in securing a new system to commercialize the media rights. The justifications included in the Decree read as follows: 

“Concerning the media rights of professional football competitions, three reasons justify the need for an urgent response by the Government: first, the undisputed social relevance of professional sport, second, the repeated and unanimous demands to intervene from all parties involved and, finally, the need to promote competition in the market for the ‘pay-per-view’ television.”[3]

 

II. The new LFP’s media rights collective selling system 

The LFP’s media rights remain owned by the clubs. However, the football clubs are obliged to assign the right to commercialize them to the organizing bodies of the competition, i.e. the LFP (first and second division) and the RFEF (the cups).[4] 

The conditions for the joint selling of the media rights

In accordance with article 4 of the Royal Decree, the organising bodies will commercialize the media rights on an exclusive or non-exclusive basis.  Moreover, the procedure must be fair and equitable. The LFP and the RFEF will define the different packages commercialized in line with Article 4(4) of the Royal Decree.  These conditions will be attached by the organizing body into categories (‘packages’), depending whether it is on an exclusive basis or not, the time of the game and the duration (maximum 3 years), in accordance with the Article 4(4). The structure of the packages will be set out when the collective selling takes place.  

The specific distribution key of the revenues derived from the collective selling is enshrined in Article 5: 90% of the revenues will go to the first division clubs, and 10% to the second division clubs.   

Graph: Distribution of the money regarding the media rights of the first and second division:


 


Payments by the clubs after the distribution of revenue: The overdue debts to the Public Revenue and the indirect solidarity contributions.  

After receiving their share of revenue from the media rights, the clubs must first cover their overdue debts with the Spanish tax authorities. Indeed, Article 6(2) holds that “(t)he payment of overdue and payable debts owed to the ‘State Agency Tax Administration’ and the ‘General Treasury of the Social Security’ shall be considered on a preferential basis”. No club will be able to carry out the indirect solidarity payments foreseen by Article 6(1), if they do not reimburse their outstanding liabilities with the public authorities.

It is a well-known fact that Spanish football clubs have accumulated large amounts of debts over recent years. Indeed, at the end of the year 2013, the debt of the Spanish football amounted to 3.600 million € in total, with “around 700 million” to the public authorities. The Royal Decree is also aimed at tackling this longstanding debt “addiction” of many Spanish football clubs.                                             

Furthermore, in accordance with article 6(1) of the Decree, the clubs will have to make solidarity contributions to specific funds and Institutions promoting football and sport. These contributions will only be made after the obligatory contributions to the tax authorities have been paid. The five contributions include:

  1. 3.5% of the broadcasting revenues will be used to create a ‘Compensation Fund’ in order to assist relegated clubs from the first Division to the second and from the second division to the third division (in Spain known as the second division “B”). Out of the Compensation Fund, 90% will flow to the relegated clubs from the first Division and 10% to the relegated clubs from the second Division.

  2. 1% of the broadcasting revenues will go to the LFP for the purpose of promoting the League on the domestic and international market.

  3. 1% of the broadcasting revenues will go to the RFEF as a solidarity contribution to develop amateur football[5].

  4. Up to 1% of the broadcasting revenues will go to the Consejo Superior de Deportes (CSD), a Spanish Governmental body encouraging the development of sport in Spain. The goal of this contribution is to finance the social protection of high-level athletes (not just football players).

  5. A further 0,5% of the broadcasting revenues will go to the CSD, and shall be distributed in the following way:

    1. Aid to female football clubs participating in the Women’s First Division, covering social security contributions.

    2. Aid to football clubs participating in the Second Division “B”, in order to pay social security contributions.

    3. Aid to associations or unions of players (‘AFE’), referees, coaches and trainers. 


The Spanish cup and Supercup revenue-sharing criteria

The packages will be made according to the criteria similar to those applicable to the LFP’s media rights. The revenue generated by the RFEF’s competitions will be shared as follows (Article 8):

  1. 90% will be directly allocated to the LFP teams (first and second division). This money will be distributed to these clubs using similar criteria as for LFP Competitions. The revenue share depends on the results obtained by the teams in the cup. The distribution envisaged foresees 22%, for the winner; 16%, for the runner-up; 9%, for the semi-finalists; 6%, for the quarter-finalists; and 2,5%, for the clubs who got knocked-out the round of the last 16.

  2. 10% will be used for the promotion of lower (semi) professional football and amateur football, that is to say, for clubs who play in the cup but are not in first or second division.


III. The Problem with the Decree: RFEF and AFE’s Opposition 


The main beneficiaries, i.e. the clubs, are quite exultant after the publication of the Royal Decree. Nonetheless, two bodies believe that they are the principal losers of the distribution model adopted, namely the RFEF and AFE (Spanish Professional Footballer's Association). In fact, the RFEF and AFE’s discontent is such that they have threatened to organize a strike paralysing the last few games of the current season, should the Decree not be renegotiated.

RFEF

The RFEF wanted 2% of the total revenue for itself, but the Decree allocated to the RFEF only 1% of the total. , As discussed above, this share will be paid indirectly by the club as outlined in Article 6(1). This implies that the federation will get paid only once, and if, the clubs have serviced their overdue debts with the public authorities.

In addition to this, the Federation did not obtain any compensation for women’s football or (semi) professional football in lower divisions. The competence for supporting women’s football and lower professional football rests with the CSD even though it is the RFEF that is in charge of the organisation of the competitions. In other words the RFEF has no control over the money flowing into the competitions it is responsible for. 

AFE

The frustration expressed by AFE (Professional Footballer's Association) is also understandable. The players have not obtained a fixed share of the broadcasting revenues, as is the case in England (1.5%) or France (1.09%). Nevertheless, according to the Royal Decree, AFE will receive from the CSD a contribution of “up to 0.5%” (Article 6(1)(e), par. 3). Moreover, the players’ representatives claim they were unjustifiably excluded from the negotiations. Without the ability of partaking to the negotiations, they were unable to secure higher guarantees for the players regarding the payment of the salaries in the lower divisions of Spanish football. Given that many players do not receive their salaries on time in the lower Spanish divisions, this money would have been a potential solution to a chronicle problem.

The strike

In return, AFE (supported by elite players like Casillas, Xavi, Piqué or Ramos) threatened with a strike. For its part, RFEF suspended all the Spanish football competitions. In response to these moves, the LFP lodged a case against AFE in the Spanish Courts, requesting the suspension of the strike and the recognition of its illegality as it would lack a legitimate ground and would violate the existing collective bargaining agreement. 

The Audiencia Nacional (the National High Court in Spain) decided on 14 May in a preliminary decision to suspend the strike. This decision ensured that the last two games of the season and the final of the Copa del Rey will be played. The case is still pending and awaits a decision on the merits. The hearing will be held on 17 June. The parties have already commenced negotiations in order to reach an agreement before the hearing. But, given that the Royal Decree has been ratified by the Parliament, very few substantial changes to the system put in place by the Decree can be made. Thus, only minor peripheral adjustments are to be expected.  

Conclusion

In my opinion, there are two key aspects that must be kept in mind. First, the duty to pay overdue debts to the public Authorities. This mandatory requirement cannot be found in any other countries and is clearly linked with the specific problems that exist in Spanish football with regard to the clubs’ indebtedness and the enmeshment of local politicians in their management. On the other hand, the other key change introduced by the Royal Decree will be that La Liga will be in a position to negotiate a much hoped for gigantic TV deal with the broadcasters. A deal, which will not exclusively benefit Real Madrid and FC Barcelona. The economic gap between these two teams and the rest of the pack was growing bigger and bigger over the last years. With the new system in place, this gap is poised to be reduced. Nevertheless, the distribution method still heavily favours the status-quo. The traditionally large clubs are rewarded for having a large number of supporters, and for their past performances. Hence, it is still virtually impossible for a smaller Spanish clubs to become, over a short time span, one of the top-earning clubs in La Liga.



[1] IUSPORT: “Aprobado el Real Decreto-Ley de los derechos audiovisuales del fútbol”

http://iusport.com/not/6713/aprobado-el-real-decreto-ley-de-los-derechos-audiovisuales-del-futbol/

[2] MARCA, “Así será el reparto del dinero televisivo”, available at http://www.marca.com/2015/05/01/futbol/1430467483.html

[3] RD 5/2015, Explanatory Memorandum.

[4] Article 2 RD 5/2015.

[5] This percentage may be expanded by agreement

Comments (3) -

  • Marca Espana

    6/23/2015 1:20:22 PM |

    Interesting that the article fails to even mention that the new and "fairer" revenue sharing system will not be applicable until at least 2022 since the royal decree's transitional disposition provides that Barca and Real will continue to earn as much as they have been earning for at least six seasons. Smoke and mirrors but not a lot of change for the next six years. Our Spanish friends may have hoped that nobody would read the small print...

    For a more complete take on the new decree, I suggest reading the following article published by The Independent.

    www.independent.co.uk/.../...tv-deal-10243057.html

  • Luis Torres

    6/23/2015 3:56:16 PM |

    Thanks for the comment. You are right to point out that Real Madrid and FC Barcelona will continue to earn as much as they earned this season (2014/15) for the next six years. However, it is important to take into account that the revenue sharing favours the status quo. This is a formal way to state that RM and FCB are not going to suffer a disadvantage when the time to share the money comes.
    The second transitional provision (pages 15-16 of the Decree) will only jeopardise the applicability of new collective selling system if LaLiga sells the TV rights for a total amount which is less than the amount for which they are sold now individually by the clubs themselves. However, provided that the amount of money paid for the collective rights is bound to increase, the scenario that you sketch is, in my opinion, hypothetical.
    This provision, and specifically its point b), assures that if any club receives an amount lower than the amount received this season (2014/15) with the individual selling system, the other clubs will have to “compensate” this club. In other words, the clubs that are receiving a higher amount through the new collective selling system, will have to give this positive income to clubs which receive a lower amount.
    To conclude, and taking into account the amount that La Liga is expected to receive for the collective selling (at least €1,000M per season for the upcoming years), the situation you are exposing is merely hypothetical.
    Nonetheless, you are right, both RM and FCB will receive at least the same amount as this season, in a way similar as all the other clubs, who will also receive at least the same amount as this season.

    • Marca Espana

      6/24/2015 12:19:15 PM |

      Apologies but the numbers just do not add up. If La Liga were to sell its TV rights for the €1,000M that you mention (i.e. €900M for the first division and €100M for the second division), Real's and Barca's calculation would be as follows:

      - €22.5M which is 1/20 of the common pool
      - €37M of the merit pool for Barca. Real a bit less, about €34M since it has had worse results during the last few seasons
      - €45M of the support pool (which is capped at 20% for each club and it is likely that, since they are fully in control of the committee that decides how this is calculated, Real and Barca will pay themselves the maximum)

      This means that if the new "fairer" system would be applicable (i.e. in the absence of the transitional disposition) Barca would be entitled to €104M and Real to €101M instead of the €140M that they earned during the 2014/5 season.

      Just by way of comparison Rayo Vallecano's earnings would increase from €18M during the 2014/5 season to approx €34M
      (€22,5M common pool + €6M + €5,5M support) if they were calculated under the new "fairer" system.

      Unfortunately and by virtue of the feudal privilege provided to Real and Barca by the transitional disposition, "mighty" Rayo will be obliged by law to give up part of this increase to "compensate" poor Real and Barca for their loss to ensure that they keep on earning at least €140M until at least 2022.

      This means that the rest of the vassal clubs will have to pay their El Clasico lords as much as €75M annually to fund their European expansion.

      Crony capitalism at its absolute best. Fortunately we are fully aware by now that the juicy bits of any law related to Real & Barca are always to be found in the additional/transitional dispositions. The preamble and the first part of the laws ("PLCs are a great form of incorporation", "We have created a fair system to distribute the TV rights", etc.) shall be ignored.

Comments are closed