Download - Presentación final sports economics
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Workshop 3 Q7:
Group B7
Marta Gómez-Guadalupe IzaguirreAna Epalza Diaz-Guardamino
Félix Brezo FernándezPeter Karsten Munch Christensen
Mads Østrup Christensen
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Is it possible in Europe to introduce the Financial fair
play principles?
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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
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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.
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MICHAEL PLATINI’s PLAN:
no deficit by 2017
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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.
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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.
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Inte
r M
ilan
Man
ches
ter Uni
ted
Bayer
n M
unich
Barce
lona
Chelsea
Arsen
al
0102030405060
MILLIONS
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PROS
Fair competition
Control of earnings and spendings
Leverage on wages
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CONS
Unrealistic plans
Not planying? What will happen with fans?
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Discuss some expectable pro´s and con
´s from major stakeholders.
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Who are the stakeholders?
Owners
CoachesFans
MediaLocal businesses
Players
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Owners
There will not be unfair competition
Great wealth would not undermine the
competition
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Local business
Without risk of disappearance, they will still have incomes the matchdays
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Players/coaches
Wages would decrease: the clubs will not
be able to cope with such high
costs
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Media
More teams fighting for the
title
Audience may pay less attention to nowadays ‘super teams’ games
Matches will be more exciting
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Fans
Risk of club disappearance
decreases
More spread victories
Big team supporters could be disappointed
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Is The European Leagues ready to apply financial fair
play, maximum players salaries and other similar
“American diseases”?
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The main starting point is: are these measures necessary?
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We can take a look to the wealthiest teams in terms of revenue…
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Real Madrid and FC Barcelona are
Top 2 in Europe in terms of revenue
(mill. €)
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Can you remember last season’s classification in the Spanish “La Liga”?
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There is a difference of 25 points between the top2 and the 3rd in the table…
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This year’s trend is the same…
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Almost 2 matches in 13 games played…
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Another stat: maximum scorers in the league are…
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Messi:
15 goals
Cristiano:
16 goals
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Not everyone is competing using the same resources!
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What should be done to face this problem?
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Balancing the revenues to boosten the true product…
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74% of revenues
including media and mechandising
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In some countries TV rights are negotiated separately…
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TV revenues in million € by team / league
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To create a strong competition, clubs
should think as a whole
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Is it of any significance, that a national league makes a
profit or is not too unprofitable?
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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
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Explain individually for the major leagues the different trends and why you think Broadcasting and foreign
investors have become such an important aspect?
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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
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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.
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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
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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
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Q7.5
◦France New Deal (Canal Plus) 60% money increase
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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!)
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Comment on the article in the upload “Balancing the books
SB 2010-08”.
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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