presentación final sports economics

Workshop 3 Q7:

Group B7

Marta Gómez-Guadalupe IzaguirreAna Epalza Diaz-Guardamino

Félix Brezo FernándezPeter Karsten Munch Christensen

Mads Østrup Christensen

Is it possible in Europe to introduce the Financial fair

play principles?

Even with the money earned from the Champions League, clubs still overspend.

Right now, the debts between the clubs within the top leagues of England, Spain, Italy, Germany, and France is:

5.5 billion Euros

Financial fair play:

Turn the dirty and relatively hidden debts into a clean balance in which you only spend as much as you earn. If you don’t do it, you won’t get to play in European competitions.

The plans have already been aproved.

Under the new rules, any club that spends more than it earns would be barred from European competition.

MICHAEL PLATINI’s PLAN:

no deficit by 2017

What counts as deficit?

• Building a new stadium, or investing in youth academies.

• Buying players and paying their wages.

• Building a new stadium, or investing in youth academies.

The amounts of money that clubs earn from the Champions League and the Europe League are incredible.

This past season there were 746.4 million Euros distributed to clubs taking part in the Champions League.

Inte

r M

ilan

Man

ches

ter Uni

ted

Bayer

n M

unich

Barce

lona

Chelsea

Arsen

al

0102030405060

MILLIONS

PROS

Fair competition

Control of earnings and spendings

Leverage on wages

CONS

Unrealistic plans

Not planying? What will happen with fans?

Discuss some expectable pro´s and con

´s from major stakeholders.

Who are the stakeholders?

Owners

CoachesFans

MediaLocal businesses

Players

Owners

There will not be unfair competition

Great wealth would not undermine the

competition

Local business

Without risk of disappearance, they will still have incomes the matchdays

Players/coaches

Wages would decrease: the clubs will not

be able to cope with such high

costs

Media

More teams fighting for the

title

Audience may pay less attention to nowadays ‘super teams’ games

Matches will be more exciting

Fans

Risk of club disappearance

decreases

More spread victories

Big team supporters could be disappointed

Is The European Leagues ready to apply financial fair

play, maximum players salaries and other similar

“American diseases”?

The main starting point is: are these measures necessary?

We can take a look to the wealthiest teams in terms of revenue…

Real Madrid and FC Barcelona are

Top 2 in Europe in terms of revenue

(mill. €)

Can you remember last season’s classification in the Spanish “La Liga”?

There is a difference of 25 points between the top2 and the 3rd in the table…

This year’s trend is the same…

Almost 2 matches in 13 games played…

Another stat: maximum scorers in the league are…

Messi:

15 goals

Cristiano:

16 goals

Not everyone is competing using the same resources!

What should be done to face this problem?

Balancing the revenues to boosten the true product…

74% of revenues

including media and mechandising

In some countries TV rights are negotiated separately…

TV revenues in million € by team / league

To create a strong competition, clubs

should think as a whole

Is it of any significance, that a national league makes a

profit or is not too unprofitable?

4. Is it of any significance, that a national league makes a profit or is not too unprofitable?

EU◦Maybe

Structure of the league

US◦Yes

Structure of the league

Explain individually for the major leagues the different trends and why you think Broadcasting and foreign

investors have become such an important aspect?

Q7.5

◦England Divides half of the revenues amongst the

clubs The League with the highest

broadcasting revenues Looking to increase their revenue by

70%, benefiting all the clubs, over the next three years

Q7.5

◦Spain Barcelona and Real Madrid are the two top

money league clubs Accounts for most of the broadcasting

revenues in Spain Are looking at a large increase in

broadcasting revenues Able to negotiate their own (TV) deals.

Q7.5

◦Italy Able to negotiate individually More competition amongst television-

broadcasters Must Pay 19% of a negotiation to the

other clubs Typically Italia, everything is uncertain at

the moment, do to political pressure for redistribution

Q7.5

◦Germany 40 % increase Redistribution among the clubs More money to the top clubs Earns less money then the top money

league clubs Are dependent on money from

Champions League and Commercial rights

Has one of the highest match day attendance

Q7.5

◦France New Deal (Canal Plus) 60% money increase

Q7.5

The foreign legion A trend of higher earnings (Commercial,

tv broadcast, Sponsor) Needs to control wages. “A Billionaires playground” Revenues is seen as a good incentive to

invest, even though wages are astronomical (This report is made prior to the financial crisis!)

Comment on the article in the upload “Balancing the books

SB 2010-08”.

Q7.6

Sponership• League sponsorship• Sponsorships come from all kinds of

places (including the public).• Clubs need to activate their sponsorship

better• Recognition rate to low