The 2018-19 football season has become something of a watershed for Spain’s LaLiga, underlining the finite nature of playing careers while confirming that the competition’s broad appeal goes beyond individuals.
With Cristiano Ronaldo’s transfer from Real Madrid CF to Juventus FC, the duopoly that included FC Barcelona’s Lionel Messi effectively came to an end. These two players dominated LaLiga for a decade, inspiring their clubs in what has been a golden era for Spanish football, at both international and club level. In this article, the KPMG Football Benchmark team takes a look at LaLiga’s current situation and future opportunities.
Changing of the guard
When Real Madrid CF and FC Barcelona met for the season’s first Clásico at the end of October 2018, it was the first time since 2007 that neither player had featured in Europe’s most celebrated derby. Furthermore, the annual Ballon d’Or was recently awarded to Luka Modric of Real Madrid CF – not since 2007 had a player other than Ronaldo and Messi won the top individual prize in world football. LaLiga has known for years there would come a time when its prize assets would come to the end of their playing careers but the league’s president, Javier Tebas, has openly stated that Ronaldo’s departure has not affected LaLiga as much as it would have done a few years earlier.
Indeed, aware of the passing of time and to make its core offering more marketable, LaLiga has attempted to internationalise itself and harness new technologies to make the competition more attractive to the current generation, across all continents. Moreover, the success LaLiga has had in securing more favourable broadcasting deals suggests sponsors and business partners have long since looked beyond the current era.
Although LaLiga’s match attendances – average 27,000 in 2017-18 – trail some way behind Germany’s Bundesliga (44,500) and the English Premier League (38,300), in terms of broadcasting revenues, LaLiga has the second highest level of income from TV. In six years, LaLiga more than doubled its broadcasting revenues from EUR 690m in 2011-12 to EUR 1.7 bn in 2016-17. Future growth perspectives are also appealing as the latest agreement, struck with Spanish telecommunications company Telefonica for the period 2019-2022, totalled EUR 3.4 bn, at EUR 1.14 bn per season. With only four of the eight packages awarded, this represents a 15% increase on the previous cycle according to an official statement from the league. At the same time, LaLiga renewed its contract with Mediapro for the sale of international broadcasting rights. This five-year deal (2019-2024) totalled EUR 4.5 bn, a 30% rise on the last three-year period. Both agreements underline the sustainability of LaLiga and its ability to capture new audiences beyond the time of Ronaldo and Messi. While this is an impressive trajectory, LaLiga’s revenues are still less than half those generated by the Premier League, which is indicative of a significant potential for improvement.
LaLiga’s attractiveness to broadcasters has also manifested itself in the form of a ground-breaking transaction with Facebook, which includes the screening of 380 matches in India, Pakistan, Sri Lanka and other parts of Asia. This coincides with a growth strategy that includes the opening of 30 football schools in the region, which not only reaches out to new fans, but also provides the opportunity to enhance the brand of LaLiga and its clubs.
Asia is an important part of an expansion narrative for LaLiga aimed at growing revenues, increasing sponsorship and media rights outside its traditional marketplace. The league is also securing partnerships that can develop youth academies, coaching programmes and marketing agreements, with a strong focus on China. Furthermore, among the many agreements between LaLiga and international organisations are tie-ups in Thailand and Japan, the latter being a vibrant market for Spanish football, as evidenced by a 59% increase in Japanese unique users visiting LaLiga’s official website.
Beyond Asia, the league has announced a 15-year joint partnership with Relevant Sports to promote football in North America, which includes the highly controversial ambition of playing LaLiga matches in the US, which would make it the first of the major football leagues to take its primary product abroad.
Interestingly, LaLiga has relied on one of its most ground-breaking projects called the LaLiga Global Network, which uses young people with a high level of technical expertise to spread the LaLiga word in key territories in order to further enhance brand development, generate commercial revenues and connect – through social media and marketing activations – with local fans. This program, through its local footprint and perspective, has been a main catalyst for the league’s successful internationalisation.
Equally relevant has been LaLiga’s drive for technical reinvention, starting with a more consistent approach to media – signalling and production – around the league’s stadiums. The league has also taken fan engagement to a new level, producing digital content for the current tech-savvy generation, in collaboration with Microsoft. Big data is also used to determine how fans are engaging with the content, which in turn enables the league to better target its product to fans worldwide. Importantly, LaLiga’s digital initiatives emphasise the need to promote all clubs and not just Real Madrid CF and FC Barcelona, who have very active programmes of their own.
Of course, cutting edge technology costs money – the agreement with Microsoft cost EUR 20m over four years – as does committing resources to ensure the league is able to remain competitive. Under Tebas, LaLiga has increased its headcount from less than 50 to more than 400. The president sees the league not as a purely football institution, but as a pivotal figure in the leisure and entertainment sector.
There is little doubt that LaLiga, spurred on by the desire to compete with the Premier League, has strong momentum to continue growing and to ensure the shift from the Ronaldo-Messi era – whenever that will completely come to an end – is as seamless as possible. With clubs of the profile and size of Real Madrid CF, FC Barcelona and Club Atlético de Madrid, LaLiga’s competitiveness on the field of play appears to be assured.
As the search for successors to Ronaldo and Messi gets underway, LaLiga’s challenge is to retain the glamour, the economic power and investor interest to keep pace with other major leagues. With football becoming ever more global, LaLiga, the Premier League and the Bundesliga are all competing for a worldwide audience. Although Spain may soon be shorn of both of its shining jewels, the league is arguably robust enough to handle the transition.