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2. International benchmarking of major football leagues
CHAPTER 2
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Distribution models in football
The international benchmarking analysis of major professional football leagues sought to answer specific questions, by gathering concrete examples of action regarding the process of centralization of audiovisual rights in Portugal. It aimed to develop a deeper understanding of the ability of this model to generate higher added value for clubs and for national professional competitions. In that sense, it sought to understand and systematize the modus operandi of the major professional leagues in terms of ownership of audiovisual rights, the way they are negotiated and commercialized in national and international markets, the number of matches broadcasted live, how revenues are distributed among the clubs and the main challenges associated with the process.
10 What are the main challenges?
09 What is the evolution of revenues?
08 How are negotiations performed?
07 How the contents are distributed?
06 How many matches are broadcasted?
Dimensions of analysis
01 Who owns the rights?
02 How is the commercialization model?
03 How are the agreements established?
04 How are international rights commercialized?
05 What is the revenue distribution model?
Who owns the rights and how is commercialization performed?
According to the reality presented previously and the table below, in 2019, the professional football leagues with the highest audiovisual revenues were those that have implemented a centralized model for the commercialization of audiovisual rights. In all these leagues, the team that plays “at home” is the owner of the rights.
In Spain and Italy, the transition to a centralized model for the commercialization of audiovisual rights was processed through legislative initiatives of the national governments. This reality contrasts with that of England, Germany and France, where the centralization of rights was processed by the clubs and leagues’ own will.
Among the benchmarked leagues, the Liga NOS and the Brazilian Série A are the only professional competitions where the negotiation of audiovisual rights is undertaken individually by clubs.
League Holder
Home club
Commercialization model
Decentralized
Home club (mandatory concession to the league)
Home club (mandatory concession to the league)
Home club and league (co-ownership) Centralized
Centralized
Centralized The Melandri-Gentiloni Decree established a centralized model headed by Lega Calcio. It aimed to reduce income disparities between clubs and reduce the possibility of further manipulation of results after the scandals of 2008.
Home club and league (co-ownership) Centralized Clubs and the DFL communicated to the European Commission their intention to commercialize audiovisual rights in a centralized manner, similarly to what happened in UEFA and the Premier League. With the approval in 2003, Clubs began negotiating in a centralized way.
League (co-ownership) Centralized Law 84-610 of July 16, 1984 established that ownership of rights belongs to the events’ organizers. In football, rights are centralized by the Ligue de Football Professionnel, organizer of Ligue 1 and 2.
Home and visitor club Decentralized
How commercialization agreements were achieved
Individual negotiations. 17 clubs closed deals with a single media group. SL Benfica broadcasts their matches at home through Benfica TV.
The agreement established between The Football Association (The FA) and the 20 clubs in the first edition of the Premier League marked the beginning of the centralized commercialization of audiovisual rights.
Royal Decree 05/2015 put an end to individual club negotiations, with LaLiga taking over the centralization of audiovisual rights.
After the end of the “Club of the 13”, which centralized the commercialization of rights, Brazilian clubs began negotiating individually.
How are matches negotiated and broadcasted?
All the professional football leagues analyzed, except the Portuguese and the Brazilian have a centralized commercialization model in which a rule of “no single buyer” applies. This clause prevents audiovisual rights from being transferred solely and exclusively to one media operator.
In addition to not having an exclusive buyer, major professional football leagues tend to commercialize audiovisual rights by structuring them in packages/bundles. This practice consists of creating groups of matches considering the match day, time or platform. The strategy and criteria defined for this grouping is under the responsibility of the leagues.
Finally, it should be noted that the matches of the main European leagues are broadcasted through the subscription of premium sports channels or streaming platforms, while in Brazil broadcasting in open signal is more important.
League Broadcast matches Distribution channels Do negotiations include packages/bundles?
306
380
380 Pay-TV
Pay-TV and Streaming*
Free-to-air, Pay-TV, PPV** and Streaming Liga NOS matches are broadcasted by two channels, Sport TV and BTV. Sport TV broadcasts all matches, except SL Benfica’s matches at home, which are broadcasted by the club’s channel.
Seven packages were negotiated with specific characteristics in terms of time, days and number of matches. BT (52 matches), Sky Sports (128 matches) and Amazon (20 matches) were the buyers of the current season Premier League rights. Premier League matches are broadcasted to 188 countries around the world. Eight packages were negotiated with specific characteristics in terms of time, days and number of matches. Mediapro (one match per week and broadcast in public spaces, bars and restaurants) and Telefónica (nine matches per week and Sunday matches) were the buyers for the 201920 to 2021-22 seasons.
380
306
380 (280 in 2019-20 because of the COVID-19 pandemic) Pay-TV and Streaming
Free-to-air, Pay-TV and Streaming Packages were negotiated with two companies: one with 266 matches with Sky Sport (Pay-TV) and another with 114 matches with the media group DAZN (Streaming).
Seven packages were negotiated with specific characteristics in terms of days and number of matches. Sky acquired 200 matches on Saturdays (Pay-TV); DAZN (Streaming) 106 matches on Fridays & Sundays; and ProSieben/Sat1 acquired 9 specific matches for open channel broadcasting.
Free-to-air, Pay-TV, PPV**, Streaming Packages were negotiated with two companies: eight matches per week for Téléfoot and two matches per week for Canal+.
380 Free-to-air, Pay-TV and PPV** Decentralization does not favor bundles’ negotiation. The two rightsacquiring media groups decide the platforms on which they will broadcast (Free-to-air, Pay-TV, PPV).
* A pivot test for the commercialization of Premier League matches in PPV mode was recently performed. However, it had limited success. Additionally, in response to the COVID-19 pandemic, matches from the 2019-20 season were broadcast free of charge. ** PPV – Pay-per-View
All analyzed leagues, with the exception of Liga Portugal, negotiate their international audiovisual rights using a centralized model.
The highest rated professional football leagues place a special focus on the centralized commercialization of international audiovisual rights. They recognize it as the main tool in the internationalization strategy of their tournaments and clubs, fueling growth in the number of fans and supporters. Furthermore, the centralization of audiovisual rights, through a more equitable distribution of revenues, increases competitiveness among clubs, promotes football as an energizing show and attracts a larger fan base. The expansion of that base in international markets generates larger audiences. In turn, it enhances the value of audiovisual rights to progressively boost the competitiveness of professional football and clubs.
League
International rights commercialization model
Individually
Through the League
Through the League
Through the League
Through the League
Through the League
Distribution of revenues of international rights
Non-existent. -
Internationalization strategy
Rules apply to all clubs. Starting in 2020, any increase in the current value will be distributed according to performance (not affecting the equitable component).
Are integrated in the national revenue commercialization model. The Premier League always allocates one “big six” club to the premium time in the Asian market. Additionally, the Premier League has hired several professionals with regional expertise.
In El Clásico, the first of two yearly matches is on a Saturday at lunchtime to reach the Asian market, and the second is on a Sunday night to reach the American market.
Integrated in the national revenue commercialization model.
50% based on the last five years performance, 25% in equitable shares, 25% based on the number of European matches played.
Integrated in the national revenue commercialization model.
Collectively through the National Football Commission (since 2020) Equal share to all clubs*. Processo de “degustação” pelos próximos 4 anos focado na penetração de mercado, mesmo que sacrificando receita no curto prazo
* In the international negotiation for 2020-24, an equitable distribution system is expected to be implemented.
How are revenues shared between clubs?
With a model of individual negotiation and commercialization of rights, the difference in revenues between the first ranked clubs and the last becomes wider.
Liga NOS and Série A (Brazi)l are the professional football leagues that have the greatest disparity when comparing the audiovisual rights revenue of the highest earning club and the median value of that league. With the exception of these two leagues (Portugal and Brazil), all other have a centralized negotiation and employ a distribution model for the revenues of audiovisual rights. This includes a fixed and equal component for all clubs, a component indexed to sports performance, and a component indexed to audiences and ticketing. Some have a share linked to the involvement of younger players in the matches.
League
Direct and individual sale
Distribution of national rights Difference in clubs’ revenue*
15,4x
50%/25%/25%: 50% are equally distributed among clubs; 25% based on audiences; and 25% based on the club’s performance.
50%/25%/17%/8%: 50% are equally distributed among clubs; 25% based on club performance in the past five years; 17% based on audiences; and 8% based on the average number of tickets sold in the past five years.
50%/20%/15%/10%/5%: 50% are equally distributed among clubs; 20% based on the dimension of the fan base; 15% based on club performance in the last season; 10% based on club performance in the past five years; and 5% based on historical performance.
70%/23%/5%/2%: 70% based on club performance in the past five years; 23% linked to club performance in the past five years, but divided by 36 clubs (Bundesliga 1 and 2), with different shares for each club with the exception of the top six, that receive the same amount; 5% based on club performance in the past 20 years; and 2% based on the use of under-23 years-old players (an incentive to develop and empower youth). 3,5x
50%/30%/20%: 50% are equally distributed among clubs (30% fixed and 20% regarding licensing agreements with the league, related e.g., with infrastructure, financial ratios, among other factors); 30% based on club performance (25% regarding the current season, 5% the past five seasons); and 20% based on broadcasted matches (national and international).
Globo - 40%/30%/30%: 40% are equally distributed among clubs; 30% base on club performance; and 30% based on broadcasted matches. In PPV, distribution is based on subscribers.Turner - 50%/25%/25%: 50% are equally distributed among clubs; 25% based on club performance; and 25% based on audiences of the club’s matches. Fortaleza receives fixed revenues through a contract with Turner**. 1,6x
3,5x
4,7x
3,1x
6,4x / 5,2x**
*Difference between the club with the highest and lowest revenue of that league. **In the negotiations with Turner, Fortaleza competed in Series C and decided to settle for a fixed fee of 9 million Brazilian reais for the transmission in a private signal instead of a variable fee. Subsequently, the clubs that negotiated with Turner decided to equitably divide the variable fee of 140 million Brazilian reais , in which Fortaleza did not participate. Excluding Fortaleza from the analysis, the difference would be 5.2x.
The evolution of the value of audiovisual rights
In professional football competitions, the adoption of a centralized model for the commercialization of audiovisual rights is a key instrument to increase the competitiveness of tournaments and clubs.
Income growth, coupled with an equitable distribution of revenues, increases the clubs’ investment capacity and consequently improves and raises the quality of the sport. Additionally, the centralized commercialization of the international audiovisual rights is essential to increase commercial returns and leverage promotion and awareness in international markets.
The Premier League and LaLiga have consistently and continuously increased, not only their internal and external competitiveness, but also their international projection. Highquality football and the centralization of audiovisual rights have been key to these developments. Regarding the Premier League, the existence of a centralized model and the competitiveness and attractiveness of its football lead to an increase in the value of audiovisual rights of 43% in the 2016-17 contract renewal.
In the Spanish case, centralized commercialization began with Royal Decree 05/2015 and allowed LaLiga’s audiovisual revenue to grow by 34%. No club has seen a decrease in revenue compared to previous seasons. This has also reduced the disparities in revenue among clubs.
Bundesliga, despite having less 74 matches than the other European leagues, holds the third place in audiovisual revenues.The last renewal of audiovisual rights contracts in Brazil was the only one that did increase substantially total value for clubs. The value for Ligue 1 for the 2021-22 season does not consider Mediapro’s breach of contract, which will require new negotiations.
(values in billions of euros)
Notes: For seasons 2019-20, 2020-21 and 2021-22, the amounts in the chart refer to total values divided by the number of seasons, with the exception of LaLiga in 2019-20, which until now was the only one to disclose these values in 2020. For the 2021-22 season, Bundesliga commercializes its audiovisual rights for a period of fours years.
How is football reacting to the impact of Covid-19?
Broadcasting of matches through open signal channels
In 2020, after the COVID-19 outbreak and to minimize the impact of banning audiences from stadiums, the Premier League and the rights’ owners (Sky, BT and Amazon) broadcasted the remaining matches of the 2019-20 season through open signal, or granted free access via streaming platforms (for Amazon). Note that this procedure was not applied for the 2020-21 season, in which matches were once again broadcasted in a closed model, as before the COVID-19 outbreak.
Changes in the distribution of revenues from the commercialization of audiovisual rights
During the pandemic, Bundesliga was the first league to negotiate the commercialization of national audiovisual rights of the four seasons that follow 2021-22. The negotiation resulted in a 13% reduction in the value of the current contract (close to 200 million euros).The reduction in the value of audiovisual rights became a trend before COVID-19. In 2019, the English league registered a reduction of 8%, despite the increase in the commercialization value on international markets. The DFL changed its distribution model for upcoming seasons to support the clubs with the mitigation of the long-term financial impact of the pandemic:
• Fifty-three percent of revenues from the commercialization of rights in the domestic market in seasons 2021-23 will be equally distributed among clubs, 42% based on team performance in the past four seasons, 3% based on the use of under-23 years-old players and 2% based on “club interest”*. For the following seasons (2023-25), the distribution will be based on a 50%, 43%, 4% and 2% model, respectively.
• The distribution of international revenues will be made as follows: 35% of the amount distributed equally among the 18 clubs and the remaining 65% according to performance in European competitions.
Launch of a “media company” with the involvement of investment funds
The Italian League, with the support of the Serie A clubs, created a new media company to manage the commercialization of audiovisual rights. Aiming to provide greater liquidity to the market that was severely affected by COVID-19, and also to boost revenues from the commercialization of audiovisual rights, Lega Calcio is negotiating the commercialization of 10% of the media company’s shares to private equity funds CVC Capital Partners, Advent International, and the Italian fund (Fondo Strategico Italiano, 1%). The total value of the contract is approximately 1.7 billion euros.
Broadcasting matches through streaming platforms
The transmission of matches via streaming platforms such as Amazon Prime Video and DAZN has been on for some seasons. However, as a way of involving more and new fans, some Brazilian clubs broadcasted their matches through streaming channels within the e-sports universe of Twitch. Recently, the clubs of Série A and Série B of the Brazilian championship negotiated their international audiovisual rights with the company GSRM, which transmits the matches via its streaming platform.
* “Club interest” of Bundesliga and Bundesliga 2 will be analyzed through market research, with a survey of 23 thousand people, representative of the German population aged 14 years-old and older. The distribution of this portion of revenue is made at the end of the season.
