The International Footy Climate: A Lament for Serie A
A glance at the other leagues leaves an uneasy feeling. As the Bundesliga prepares to sell its TV rights in the background shrouds, it's evident that other media markets face a financial crisis.
For instance, following Spain's La Liga's downfall, Italy's Serie A struggled as well. In France, they decided to cancel the tender due to a staggering shortage of bids.
The era of booming growth seems to be a distant memory. Steffen Merkel, the DFL's new managing director, acknowledged this while still uninformed about the Serie A results. "Italian football took a hit," he lamented.
"A blow to the pride of Italian soccer"
The much-anticipated multi-billion euro deal for Serie A didn't materialize. Instead, it will only receive 900 million euros annually from 2024/25 to 2028/29. Napoli's owner, Aurelio De Laurentiis, expressed his dismay: "It's a blow to the pride of Italian soccer." He was even more perturbed that the income was less than the old contract that yielded 927 million annually.
Serie A President Lorenzo Casini, on the other hand, saw a silver lining. "A victory," he claimed. The media reported that 700 million would come from DAZN and 200 million from Sky. De Laurentiis moaned, "They are not competent, they are not good enough for Italian soccer."
French football's woes are even more complicated. The tender was expected to generate 1 billion euros annually, but it failed in October due to a lack of eligible bids. Some say that Canal+, the league's long-term partner, chose not to bid.
DAZN aims to conquer the French market
DAZN now plans to enter the French market too. Amazon and beIN Sport are interested—but not at the desired prices. The league now must conduct individual negotiations.
The mess was even worse with the previous contract. When Mediapro, a newbie in everyone's eyes, won the bid, they failed to pay the auction's total. The emergency contract with Canal+ and Amazon Prime Video, currently in effect, produces only around 580 million annually instead of the anticipated 1.15 billion.
Financial decline also affected Spain's La Liga. The agreement now yields only around 995 million euros annually for six years, as reported by industry magazine Spobis. The Premier League, however, remains steady with its 1.63 billion pounds (currently 1.86 billion euros) for a comparable contract.
Considering the challenges Serie A, La Liga, and other top leagues face, a revenue increase for the Bundesliga seems unlikely. Merkel stated, "We don't have the easiest market environment for the tender." If the upcoming auction yields another 4.4 billion euros for four years, it would be considered a success.
- The worldwide landscape of top football leagues, including Serie A, La Liga, and the Bundesliga, faces a decline in revenue and a sudden decrease in the value of TV rights.
- Serie A recently reached an agreement for 900 million euros annually, which disappointed Napoli owner Aurelio De Laurentiis. He argued that it was less than the previous contract, which provided 927 million euros annually.
- France's TV rights tender for Ligue 1 was canceled due to insufficient bids. DAZN, a partner of the Bundesliga, is interested in joining the French market, but it's unsure whether the prices will be favorable.
- The Premier League is the only league that has maintained its revenue growth, demonstrated by its 1.63 billion pounds (currently 1.86 billion euros) contract for the 2022/23 season.
Source:
Enrichment Insights: The decline in revenue in Serie A, La Liga, and other top European leagues can be attributed to several factors.
- Market Over-saturation: The growing competition among streaming services and traditional broadcasters is leading to a decline in viewing figures for football matches, putting pressure on their revenue streams.
- Stagnation of Viewership: The stagnation in top-tier domestic football competition viewership is contributing to the decline in revenue for leagues like Serie A, La Liga, and the Bundesliga.
- Economic Factors: The overall economic climate, including inflation and the aftermath of the COVID-19 pandemic, has affected the willingness of advertising companies and media platforms to invest in sports media rights.
- Government Regulation: Government regulations and taxes have created obstacles for sports leagues, which could lead to a decrease in revenue and competitiveness.
- Foreign Investment: Foreign investors, eager to gain a foothold in the European sports media rights market, have led to significant changes in the ownership structure of football clubs and leagues. This has made it more challenging for these leagues to maintain a stable revenue stream.
These insights highlight the complex web of factors affecting the TV rights tender for the Bundesliga and other European leagues. Addressing these challenges will be crucial for leagues to remain competitive and ensure a sustainable future.
