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La Liga becoming world class commercial commodity

| 31.07.2014

Spanish football’s top boss Javier Tebas is determined to attract all of the world’s best players, in order to rival the commercial power of the Premier League.

In the last two seasons, Gareth Bale and James Rodriguez (£85.3m and £71m to Real Madrid), plus Neymar and Luis Suarez (£48.6m and £75m to Barcelona) have all made the move to La Liga, increasing the league’s position as a powerful global entity.

Perhaps the frightening thing for other teams is that Real haven’t finished spending this season, and will continue to splash out on players they think will not only contribute to the team’s success, but their commercial performance.

Real’s president Florentino Perez has always maintained he will keep signing ‘Galacticos’, knowing they help to sell merchandise. Cristiano Ronaldo has become a product on his own, and it is likely that the club make more from Ronaldo sales than the Portuguese attacker’s salary.

In addition to the amount Real make from merchandise, another revenue stream directly involves the players themselves. Bale, for example, agrees to pay the club 40 percent of all of his sponsorship deals. Real justify this due to the fact that many of their modern ‘Galacticos’ have the image to attract advertisers, and from the moment they sign for the club they automatically become commodities. Every blue-chip company likes to associate themselves with success, and leading brands in the global marketplace to increase awareness and ultimately sales.

Due to Real being the biggest football entity in the world, and therefore attracting the best, most marketable players, it makes sense that companies want to be associated with their stars.

Because of this, the club, mainly under Perez, identified an opportunity to capitalise on this, and began charging percentages of each deal. David Beckham was one of the first to be brought in by Los Blancos for commercial purposes and, having only paid £25m for him, more than made their money back, cracking the Asian market simultaneously.

Barcelona by contrast, have a different model to their El Clasico rivals. The Catalan club have built a reputation by promoting from within, and putting more of a focus on La Masia, their world-renowned youth system. Building the team around their next generation of youth stars trained the ‘Barcelona way’, they add imports where necessary.

Victor Valdes, Carles Puyol, Xavi Hernandez and Andres Iniesta are products of the academy, while Argentine Lionel Messi was also recruited when he was 14. As a result, their players attract sponsorship deals purely by being the best, rather than Real’s players that are recruited for a combination of talent and marketability.

Barca’s ongoing partnership with charity Unicef has been a masterstroke, and a public relations 101 by the Nou Camp hierarchy. As well as allowing Unicef to have their name on the team shirt for free, Barcelona also donate €1.5m per year to the charity for new projects, which has further strengthened their position around the globe. They have shown recently that they are also willing to break the bank, after the £75m signing of Suarez proved commercially strong and gives them a competitive position in the marketplace.

In recent years, Atletico Madrid have started to make their move from a performance perspective. Although recent success has mainly been on the field with Europa League triumphs, their La Liga victory and Champions League final appearance last term, has catapulted them to stratospheric proportions. Any team that sells a 36-goal-a-season striker like Diego Costa, and undoubtedly one of the best in his position in world football, for a modest amount of £32m (when considering the fee for Suarez) would be expected to struggle to replace them. Admittedly, Costa had a release clause and all things considered Chelsea, in today’s world of inflated prices, have got themselves a bargain.

Atleti, however, were able to replace him with Mario Mandzukic, who will walk into the vacant centre forward spot with ease. Following this, talented French winger Antoine Griezmann has signed up at the Vicente Calderon, after scoring 16 times in 35 La Liga appearances last campaign. Diego Simeone is being linked with Arsenal’s Santi Cazorla, Javier Hernandez of Manchester United, and are also said to be considering a move to bring Fernando Torres back to his boyhood club, from Chelsea. In appointing Argentine, Simeone as boss, they played to their strengths. His style is somewhat similar to Jose Mourinho’s; the common denominator hard work, discipline and high energy, which provided a foundation for further flourishes. He alone has arguably been the key to their success, and now they need to capitalise on that, for prosperity and sustainability’s sake.

Although global television revenue in La Liga is mainly divided between Real Madrid and Barcelona, the door is open for other clubs that can become a brand, and strengthen their commercial position globally. Atletico seem to have got themselves into an enviable position to do likewise. Currently sponsored by Azerbaijan, after their recent success they can leverage that to renegotiate or source more lucrative deals.

Ideally, potentially primed to emerge from the wilderness are Valencia, owned by Singapore billionaire Peter Lim. Having strengthened strategically this summer, bringing in young Spanish striker Rodrigo Moreno to partner Paco Alcacer. Although the stadium is to be finished in 2016, it seems Lim is taking a sustainable approach similar to what Arsene Wenger has done with Arsenal. The location of Spain’s third city – a paradise for millionaires, is situated on an attractive part of the coastline, boasting a harbour littered with glamorous yachts and, until recently, was on the Formula One Grand Prix circuit. Going forward, it should be a draw to some of the world’s top footballing talent, if Valencia have a strategy and can be successful in their implementation.

This latest warning shot from Tebas should be heeded by the Premier League, who themselves need to devise their own strategy to combat La Liga’s lure.



Matt Haynes

A long-suffering Leeds fan, Matt studied Sports Journalism at university, and has a plethora of multi-industry experience. Having worked on behalf of multiple hedge funds and top-tier investment banks in executive search, he has also had a stint with the BBC and the Press Association. Outside of work, he pursues entrepreneurial activities and likes to keep fit.
Although he has interviewed current England manager Roy Hodgson as well as Rafa Benitez and a number of other names, he is honoured to have spent time in the company of Gordon Banks. Matt enjoys cultivating long-lasting professional and personal relationships, is solution orientated, and supports Coral’s sports content provision.