Let’s look at the terrible state the La Liga’s finances are in.
If you’re a die-hard fan of Getafe, and let’s face it, there are millions and millions of you out there, you know about the bizarre situation of the club’s biggest star, Pedro Leon.
Pedro Leon hasn’t played a single minute this season because the league has determined that his contract puts Getafe over its allowed salary cap, and is therefore invalid. When this happened many people said, “Salary cap? I thought only American sports had that.”
So Marca, a schizophrenic Spanish newspaper culpable of the worst kind tabloid trash but also capable of doing actual journalism every once in a while managed to get a hold of the previously confidential salary caps for each team in La Liga. It was very interesting.
Barcelona top the list with $446 million annually, which speaks well for its financial health. Real Madrid is in second with $421. After the big two, there’s a big drop down to Atletico de Madrid, with Sevilla leading the pack of ‘everybody else’ at $100 million. The lowest on the list is Almeria. It’s only allowed to spend $15 million in payroll. Assuming a squad of 22 players that’s roughly $680,000 per player.
Contrast that with the English Premier League’s salaries. The difference is absolutely staggering. Southampton, which spends the least on salaries outside of the three newly promoted sides, will still shell out $85 million on payroll. That’s about as much as Valencia, the fifth highest spender in Spain. Think about that. Every single Premier League team spends more than 75 percent of the teams in Spain.
This is understandably causing a massive exodus of players from Spain to England. Some of them are even preferring to play in the English Championship, the second tier, instead of staying in La Liga. Often even teams in the Championship can offer double the wages of a middle or lower table team in Spain’s first division. Take the case of Adrian Colunga. Colunga was a very decent La Liga forward for many years. He was quick and a solid finisher. He’s still just 29 but left Getafe this season for the mighty, mighty Brighton & Hove Albion, a team I’ve never heard of.
Why is there such an imbalance? The key is in the way TV rights are negotiated. Way back in 1992, the English teams smartly realized that they all stood to gain if they banded together and negotiated their TV deals as a cohesive unit. They knew that globalization and satellite TV was going to bring an explosion in revenues. They negotiate the deals as a group and thus get more favorable terms. They then spread the wealth fairly, or at least more fairly.
In Spain, this is not the case. The teams negotiate their own deals individually. This has been very good for Real Madrid and Barcelona, but it’s very short-sighted. It leaves everyone else behind. In fact, Spain is the only major league that doesn’t negotiate its TV deals collectively, causing a massive spiral of wealth to the top. Have you noticed how the biggest stars in the world — Lionel Messi, Cristiano Ronaldo, Luis Suarez, Gareth Bale, Neymar, etc. — all play in Madrid or Barcelona. This is because they are the only major clubs in Europe that don’t have to share any of their TV revenue with other clubs.
The only way this will change is if the Spanish government steps in. There have been rumors of behind-the-scenes discussions to modify the so-called “law of sport,” which regulates professional sports in Spain. They want to impose a collective bargaining deal on soccer in the country. The problem is, it turns out it’s really hard to reform a system that overwhelmingly benefits massively rich and influential entities like Real Madrid and Barcelona. They will do everything in their power to block any sort of reform that lessens the amount of money they make.
It turns out people with lots of money also tend to have a lot of political sway. Which came as a surprise to me.