Why TV Rights Matter: A Counter-Proposal

Florentino Pérez: one face of the problem.

Arron Duckling at our SBNation colleague Barca Blaugranes posted a thought-provoking piece on TV rights in La Liga.  Take a gander at it and my response on behalf of Liga Justa.

In part three, I will move from deconstructivism to action painting.  La Liga is spinning out of control, but we can take hope from an unlikely source: Major League Baseball (MLB).

Background:

MLB is the world's top baseball league in the sport's birthplace, the United States.  MLB has thirty teams, eight of which make the upcoming playoffs.  That's a lower ratio than the six Spanish sides out of twenty which qualify for Europe.

Like La Liga, MLB has no salary cap.  Consequently, big spenders have flourished- take the current hegemony of the Boston Red Sox (post-2004) and New York Yankees (post-1980s).  The nouveau riche is represented by the Philadelphia Phillies, though money does not buy a top team: ask the Chicago Cubs, Los Angeles Dodgers, and New York Mets.  Some well-managed clubs get by on a smaller payroll: the Oakland Athletics (Brad Pitt movie!), Florida Marlins, and Chicago White Sox.

One big difference: who wins in MLB.  Last year's World Series featured the San Francisco Giants and Texas Rangers, teams with little modern history.  This season should feature playoff teams from Detroit, Milwaukee, and Phoenix, among lesser markets.  Part of the explanation: making the playoffs puts a team eleven wins away from a championship, far fewer than La Liga's thirty-eight matches.

A look into why MLB and La Liga have produced such disparate results below the jump:

Proposals:

I have not analyzed commingled structural factors such as attendance, merchandising, and TV coverage.  But a positive correlation is likely, suggesting a greater financial and marketing balance would help La Liga as a whole.  MLB's revenue-sharing model must work to some extent: we Baltimore Orioles fans are mildly content, even after fourteen straight losing seasons.

Why?  For starters, MLB negotiates its TV deal.  The league has tightwad owners and poor baseball markets- the Tampa Bay Rays may have both.  But with a highly-refined cantera, the Rays made the 2008 World Series.  Ensuring a revenue baseline allows clubs to make decisions with foresight, not at gunpoint.

Valencia is a great example in La Liga.  Knowing its creditors- banks and the local government- would not demand payment, the club has retooled and sold big-name players simultaneously (Juan Mata, David Silva, David Villa).  But down the road, the global economic crisis has hit Villarreal differently.  Despite a high probability of Champions League football, the club had to sell Santi Cazorla, arguably its best player, to league rival Málaga.

Another idea: include non-monetary considerations in player transfers.  One example is the sale of a foreign player spot for a period of time.  MLS fans recognize this as akin to the designated player rule.  This would reward smaller clubs for scouting low-cost replacements from non-European leagues.

By contrast, the proposal to eliminate transfer fees altogether would permanently destroy competitive balance.  The new normal for players would become: sign with a wealthy and prestigious club, go on loan (if necessary) with a non-compete clause, rinse, and repeat.  The rest of La Liga would become mere feeder clubs for the big two (if not already).

Most controversially: establish a luxury tax.  In MLB, the big spenders send millions to lower-budget teams and to the league, creating a baseline of parity.  As thirty-eight jornadas of Barcelona versus Real Madrid would lose its luster, the big two owe their status in part to big crowds and TV ratings in Getafe and Santander.  And if Barca and Madrid leave for a European "Super League," the rest of La Liga can do little to stop them.  The complaints of Florentino Pérez and Sandro Rosell that revenue sharing would inhibit profitability do not pass muster.

Counterarguments:

First, the transient nature of American life is unique.  For example, I saw a recent interview with Detroit Pistons guard Rodney Stuckey: he wore a Baltimore Orioles cap at a college football game in Seattle.  So it may be unreasonable for Villarreal to develop fans in Vigo or Jerez de la Frontera.

On the other hand, Villarreal now has fan clubs in Poland, Scotland, Slovakia, and the United States (that's us).  Not bad for a team from a town of 50,000 inhabitants.  And all it takes is one player, match, or friend or family member to establish lifelong ties.

Second, these solutions will not cure La Liga overnight.  Barcelona and Real Madrid will continue to dominate for the foreseeable future, as structural changes take time.  But Villarreal broke the top-two hegemony not too long ago: in 2007-08.  Now the league must create conditions which will increase that possibility in the future and build excitement in all of La Liga.

Conclusion:

MLB and La Liga share many structural difficulties.  Yankees-Red Sox is the only regular season match-up that attracts popular attention, yet the playoffs still garner great ratings.  And the World Series winner is often outside the top-third in payroll.

So money and on-the-field successes do not always coincide.  But even Orioles fans don't complain too much about Boston and New York: wealthy and successful teams breed rivalries and healthy doses of contempt.

No one wants to destroy the rich histories of Real Madrid and Barcelona.  But winning La Liga should not depend on goal difference away to Zaragoza.  Leveling the playing field will pay off in the long run, and MLB is an excellent guidepost.

Look out for part four, in which Arron will undoubtedly tear this counter-proposal to shreds.  Have your say: would revenue-sharing and the luxury tax work in La Liga?

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