Domination and Capitulation: La Liga Finances

The Spanish have no footballing equals.

La Furia Roja dominate European and World football in an unprecedented era of success. The team that made history, claiming back to back European Championships with the small matter of a World Cup win sandwiched neatly between these triumphs, offer no evidence to suggest this unparalled period is close to halting. The forecast indicates further success. The Spanish are reaping a rich harvest.

The Under 23 squad enter the Olympic Games amongst the favourites to claim the coveted gold medal. The Under 21’s are the present European Champions whilst the Under 19’s have just defended their European Championship crown with a panache reminiscent of their superiors.

This is the era of tiki-taka.

The announcement of fixtures for the forthcoming La Liga campaign will alter Spanish eyes. The triumphs on the international front will soon be consigned to distant memories as players return to their respective clubs and the gaze refocuses upon the domestic product. And there will be interest, as ever, in the relegation zone where La Liga specialises in the production of tense, nervous last day drama. The quest for the title will be as thrilling as ever. There will be twists and turns, outbursts in the media crudely camouflaged as “mind games” amidst games containing moments of sublime and captivating skill, delivered by some of the greatest players that the world has ever known.

And the title race will contain just two teams.

Two footballing giants in a land of, financially speaking, pygmies. A league which contains twenty teams but in which eighteen of those teams have no realistic possibility of even challenging for the league title. The real excitement in La Liga this season will, as it has done for the past four seasons, center around the race for third place.

For as it is on the international scene, so, strangely enough, is it replicated on the domestic scene. Whilst Spain dominate internationally, domestically, their teams capitulate. For a reason.

At home, there are two clubs who push forward remorselessly, aggressively. Barcelona and Real Madrid have no equals. The gap between second place and third place grows by the season reaching a high of 30 points in the season past. To finish third is to finish closer to the relegation zone than challenge for the title.

It was not always this way.

There was a time when the gap was smaller,  when there were more than just two teams competing. Yet it all seems so far away now. A distant memory which is unlikely to be replicated any time soon. The concern is whether the gap grows or has it reached its pinnacle, now ready to plateau? The possibility of the gap growing further is beyond contemplation.

Could the gap really move beyond 30 points in the forthcoming season?

And where are those teams who offered a challenge? Who provided a momentary break in the duopoly that has engulfed La Liga?

The Deportivo side under Irureta who reached the semi finals of the Champions League and contained talents such as the gifted, gliding figure of Juan Carlos Valeron. A shadow of their former self, promotion from la Segunda ensures survival will be their sole priority this season.

The Valencia team guided by Benitez, built upon a superb defence marshalled by Roberto Ayala with Ruben Baraja and David Albelda adding further strength in midfield. Under Emery, Los Che threatened to challenge but never quite made it as they became embroiled in their own financial crisis. With hindsight, perhaps Valencia fans will acknowledge that finishing third in La Liga was a substantial achievement given their main opponent was always their crippling debt.

In four seasons at Valencia, Unai Emery never once defeated Barcelona yet it is arguable if any other coach challenged Barcelona so effectively in individual games during that spell. Emery is now gone. A victim of his own success and the thirst of Club President Manuel Llorente and Valencia fans’ desire to achieve more and reclaim the glory days of Benitez. To move beyond their station.

Two great sides who were victorious and temporarily halted the Barcelona / Real Madrid duopoly.

Even the pretenders led by Juande Ramos’ Sevilla and followed by the great Villarreal side under the tutelage of Pellegrini have meekly surrounded, moved off into the shadows. The Yellow submarine have sunk to the depths of la Segunda.

Who will challenge Barcelona and Real Madrid on the pitch in the forthcoming season?

Can Bielsa’s Athletic side add some consistency to the form they have demonstrated in cup competitions? Could Diego Simeone bring defensive stability to an Athletic team which has always scored goals. And conceded them in equal measure. Will Pellegrini continue the project at Malaga? A Champions League qualification place has been gained at the first attempt. Is 3rd place next on the agenda?

And what of Pellegino arriving at Valencia. Is this a bold move in the vein of appointing Emery? Or is it a return to the boldness shown by the appointment of Koeman? And finally we arrive at Sevilla. Under Michel can they re-emerge aided by the inspired signings of Monchi?

The challenges on the pitch are considerable but they are simply the manifestation of what occurs off the pitch. This is where the real battle will be fought. La Liga is not won or lost on the pitches of the Sanchez Pizjuan, La Rosaleda, Camp Nou, Vicente Calderon, Mestalla or Santiago Bernabeu.

For it has already been lost within the boardrooms of the clubs. Agreements reached over the imminent TV deal scheduled to commence in season 2013/14 and which guarantees Real Madrid and Barcelona a minimum of 35% of TV revenues, in doing so enshrining the inequalities within the league. A new deal which brings a collective element to the league, replacing the individual TV deals but which brings other, unwanted, baggage.

That the majority of clubs, with one or two key exceptions, agreed to the deal aptly demonstrates the lack of collective will within the league. Each club making key decisions as if they operate in isolation, a vacuum where their decisions have no operational effect on anyone else. We cannot beat Real Madrid or Barcelona? Fine, we’ll agree to a deal that ensures we still beat you.

Real Madrid and Barcelona have always been the dominant forces in Spanish football in the post war era. Depor winning the title in 2000 and Valencia winning titles in 2002 and 2004 were just blips, seasons in which the trend was bucked. Yet over the past few seasons, the complete domination of Real Madrid and Barcelona, breaking numerous records in the process, has led many to ponder if there will be a competitive edge to La Liga outside the big two in the coming years.

It’s what led the Sevilla President, Jose Maria Del Nido, to describe La Liga as “rubbish – the greatest pile of junk in Europe”.

Del Nido attempted to gather support amongst the other clubs into altering the TV deal less in favour of Real Madrid and Barcelona. They would still receive much more than the others but only 17% as opposed to the minimum 35% which was eventually agreed. With more cash for the Valencias, Sevillas etc, perhaps you would have more competition for the title. Perhaps Sevilla would mount a challenge again and succeed where they failed in 2007. Maybe Real Sociedad could take the final step they failed to take in 2003 and claim the biggest prize on offer in Spanish football. Perhaps. The new TV deal ensures that the discussion will remain hypothetical.

The deal, when agreed, according to Villarreal President, Fernando Roig, means that there is “no league”. Monchi sounding depressed simply stated “this reminds me more and more of Scotland”. Roig and Del Nido were so outraged because their clubs are amongst the sixteen clubs sharing 45% between them whilst their main rivals, Valencia and Atletico agreed to the deal and receive a slightly larger piece of a tiny cake – 11% between them.

Although with relegation for Villarreal, Roig’s eyes will be firmly focused on steering the submarine through the choppy, and financially draining, waters of the Segunda. Villarreal will not benefit from a parachute payment but harsh cutbacks combined with the sale of numerous players means Villarreal will avoid financial oblivion as they descend into La Segunda.

And here the importance of the TV deal can be seen by all. Many of Spain’s teams are in severe financial difficulties. Teams are forced to sell their best players in an attempt to balance the books, bringing in cheaper replacements whilst still being competitive on the park. It’s an experience which Unai Emery seemed to thrive upon. As eighteen teams toil, two teams stride forward.

Barcelona and Real Madrid will always complete for the league but the point has been reached whereby only Barcelona or Real Madrid can win the league. The competitive edge of La Liga has been eroded, one fears, irrevocably. Sid Lowe referred to draws for Real Madrid and Barcelona as being the new defeats last season such was their dominance. A draw being celebrated by the opposition whilst the big two wondered, would this draw have a terminal effect on our title challenge?

The past four seasons have seen huge change at many of La Liga’s top clubs. Valencia has seen all of their World Cup winners depart. Now, with the departure of Alba who returns “home” to Camp Nou, another name is added to the list of Champions who no longer perform for Los Che; Villa, Silva, Mata, Albiol and Marchena have all departed the Mestalla as International Tournaments winners. Yet under Emery, Valencia serviced their debt, rebuilt and continually secured third place. As Valencia have lost their winners, Real Madrid have acquired theirs, demonstrating their vast powers of acquisition. From just two members of the 2008 European Championship squad, to the present 2012 squad with five members. Yet the players who arguably should have been there but failed to make it astheir development stalled, provides a more compelling, and equally, damning list. The players that Real Madrid acquired to prevent others from using and whose development has suffered as a result. Granero, Parejo, Canales etc. And whilst Real Madrid may excel at this, Barcelona can be just as damaging to the league with Seydou Keita, a prime example. An integral player for Sevilla yet mainly utilised as a bit part player at Barcelona.

The constant accumulation of a glut of players from teams who should be able to provide a challenge continues apace, facilitated by the TV monies which flow inextricably towards the big two.

Over the course of the next five seasons, it is projected that Valencia will make roughly £350million less than either of the big two. That’s Valencia. The team that has finished third in the last three seasons and the team that is supposed to offer competition to Real Madrid and Barcelona.

La Liga is offering up a product which is hugely entertaining with players from around the world in a competition which is as competitive as the SPL. Deportivo fans demonstrated their anger and the futility of the pretence of a competitive league as they crashed 4-0 at home to Barcelona in January 2011.

“We don’t want another Scottish league”

That maybe be unduly harsh. With Rangers removed from the SPL due to their ongoing financial implosion, La Liga remains more competitive. For the time being.

A more equal division of TV revenue is not a panacea for the current ills which face La Liga nor will it resolve the duopoly at the top. But it would be a positive step forward to redressing the balance and crucially, it offers hope and competition. What is sport without competition?

The opportunity, for the time being, has been missed. Two behemoths will continue to consume everything around them in their quest for national and international dominance on the club scene, propelling each other further and further on completely unaware, or rather unconcerned, of the long term structural damage which they are wreaking to their domestic competition.

Next season? I’ll take 22 please.

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6 Responses to Domination and Capitulation: La Liga Finances

  1. Jackie says:

    Spain with 24% unemplyment now is a 3rd world country and it’s league is run like one.

    Morons run Spain and Liga. I doubt Spain will win the WC2014 or CL in 2013.

    Your Fact on Villarreal are off:

    Villarreal are not geting much money from parachute payments since Villarreal
    never signed the TV Deal.

    Also, you realize the businesses of Villarreal owner actually are making money and Villarreal don’t owe money to other clubs or the Spain Govt unlike Valencia, Atl Madrid, Malaga and with players sale Villarreal will do o.k in coming season,

    • Whether or not Spain win the WC in 2014 or a La Liga club wins the CL in 2013 is almost entirely unrelated to the TV deal.

      The only Spanish sides who are going to win the CL in 2013 are the big two and they make the most money from the present set up and are amongst the highest earners in Europe. They also supply the bulk of the national squad too.

      There are problems with how RFEF operate and major issues with how La Liga is promoted in comparison to how the Premiership is marketed but these issues will not be resolved overnight and as I state, a revised TV deal is not a panacea.

      With regard to Villarreal, their playing budget is being reduced between 20-30M euros this season. Roig sold some shares to release capital for investment in the club to sustain it in the Segunda. The club was already in the process of restructuring with a greater reliance upon la cantera and this will not be accelerated. Roig’s main business enjoyed a successful 2011 but this came on the back of some disappointing performances in the preceding years which in part led to the change in how Villarreal was being run.

      I’ll double check the parachute payments again. My understanding was that these began to kick in a year or so ago with Deportivo being one of the first to benefit (they also had an insurance policy which paid out in the event of relegation to fall back onto as well)

  2. Jackie says:

    “Although with relegation for Villarreal, Roig’s anger at the TV deal is likely to be calmed by the newly introduced parachute payments which, along with the ongoing fire sale, means Villarreal may avoid financial oblivion as they descend into La Segunda.”

    Again Villarreal never signed the TV deal and vill not get much money..

    Parachute money is not saving Villarreal in Segunda:
    1) Most sponsor are sticking with Villarreal for 2012/12 season
    2) Villarreal have already sold players worth 30m
    3) Salary saving from sale
    4) Will still have 30m budget / down from 60m
    Most loss for Villarreal is TV Money of 30m

    etc

    and TV money doest make Real Madird an Barca stronger than other clubs in La Liga

    • Yes, Villarreal have sold players with others likely to follow and that is my point.

      The drop to the Segunda is massive in financial terms. Villarreal have made huge cuts along with Roig selling shares to reinvest the money into the club to provide financial stability this season.

      I told you I would check up on the parachute payment. When I have an answer, I will post it here and amend the article if necessary.

      Finally, of course the tv deal helps the big two and you suggesting otherwise is nonsense.

    • You are correct about Villarreal not receiving a parachute payment. Depor receioved 7M Euros but the submarine opted out of any such agreement.

      I will update that section of the article shortly.

  3. Pingback: Which League is the World’s Best? | Ballon d'or

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