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UNDERSTAND THE RULES OF THE GAME

La Liga’s media rights: the new law that prompted suspension of Spanish football

Published 11 June 2015 | Authored by: Lloyd Thomas Rosie Duckworth Fernando González

In the past month, the Spanish Government has approved a Royal Decree1 relating to the sale of the media rights of Spanish football clubs.

The new law will implement a system of collective commercialisation, and will channel fixed percentages of the revenue generated by the sale of media rights toward the secondary Spanish football league, and towards other specified purposes, with the aim of promoting the sport from grassroots up to professional level.

The practice of collective selling of media rights in football is well-established amongst La Liga’s European counterparts. Italy, France, and England have all adopted this approach and consistently generate significantly higher total media rights revenue than Spain. The English Premier League, for example, recently concluded a collective TV rights deal for 2016-2019 with Sky and BT Sport worth over £5.1 billion.2 Last season, Italy’s Serie A received a total of €846 million from the sale of media rights, compared to La Liga’s €800 million.3

Yet the proposal, and subsequent approval, of the Royal Decree prompted a dramatic “power struggle4 amongst Spanish Football’s governing bodies and stakeholders, which culminated in the declaration of strike action by la Real Federación Española de Fútbol (the Spanish Football Federation (“RFEF”)) supported by the Asociación de Futbolistas Españoles (“AFE”) and a number of high profile Spanish players.

Spain’s National Football League, la Liga Nacional de Fútbol Profesional (“LFP”), which strongly supports the collective bargaining system introduced by the Royal Decree, brought proceedings before the Spanish courts challenging the legality of the strike. On 14 May, the Spanish high court ruled in favour of the LFP, ordering the RFEF and AFE to call off the strike.

This article examines the mechanics of the reform, the content of the new law (including the revenue split), and the timetable for change.

The status quo

The existing Spanish legislation governing the sale of media rights allows individual clubs to negotiate their own contracts with television broadcasters for the rights to show games. This system has repeatedly seen La Liga’s two top clubs, Real Madrid and Barcelona, together take almost half of media rights revenue relating to La Liga.

A move to collective bargaining had been in the pipeline for a number of years,5 with Barcelona and Real Madrid previously signing an agreement to redistribute a portion of the revenue by lowering their 42% stake to 34%.

Whilst many of the stakeholders in Spanish Football continue to recognise the benefits of a move to collective bargaining, a key source of contention was the ratio of revenue split. The AFE, for example, contended6 that a greater share should be reserved for distribution to the clubs playing in the second division.

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About the Author

Lloyd Thomas

Lloyd Thomas

Lloyd Thomas is an associate in Squire Patton Boggs’ Litigation department and is part of the Sports Law team based in its London office.

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Rosie Duckworth

Rosie Duckworth

Rosie Duckworth is a trainee solicitor in the Sports Law team at Squire Patton Boggs in London.
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Fernando González

Fernando González

Fernando González leads the dispute resolution and intellectual property team in Squire Patton Boggs’ office in Madrid. Fernando has more than 25 years of litigation experience in commercial and IP law. He represents clients around the world in international arbitration proceedings.

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