The industry of football moves billions of dollars around the world each year – and, being a major product of the entertainmenthas its revenues generated mainly by the audience.
according to BTG Pactual (BPAC11), there is no doubt that revenues from media transmission are, and will remain, one of the main sources of money for the sports.
The bank reinforces the importance of assigning broadcasting rights to television channels and streaming platforms to maintain the operations of football clubs working.
Just to give you an idea of the size of the business, the six biggest football leagues in Europe (Premier League, La Liga, Bundesliga, Serie A, Ligue 1 and Call us), along with the top three sports leagues in the United States (NFL, NBA and MLB), recorded annual revenues from the assignment of broadcasting rights of € 20 billion, highlights BTG. The NFL alone makes €7 billion every year.
“This just shows how important broadcast revenues are in the sports industry, as they can directly impact a club’s revenue generation potential and, consequently, its performance on the field,” say analysts Carlos Sequeira and Eduardo Rosman. , in a report released on Thursday (23).
In Brazil, the assignment of rights to the Brazilian for broadcasting games, historically represents around 50% of total revenues (considering recurring revenues, ie, without transferring players). This dynamic is similar to what happens in Europe, with broadcasting rights representing the main source of revenue for the top five football leagues.
Field performance
Revenues directly influence performance on the field. Two main factors can affect the results, says BTG: the size of the revenue and the money distribution model.
“The higher the price negotiated for the broadcasting rights, the greater the revenue to be distributed among the teams. Also, depending on the way the rights are negotiated, the distribution of revenues can be more balanced between the teams, which helps to maintain competitiveness and boost performance”, comment Sequeira and Rosman.
There are two types of negotiation for transfer assignment: centralized negotiation and decentralized negotiation.
In centralized negotiation, clubs, normally organized into a league, negotiate all of their broadcasting rights together. In decentralized trading, each club is responsible for negotiating its broadcasting rights directly with the platforms.
In the second case, big clubs with the best performances have the strongest bargaining power, which means that they end up closing the best deals, while smaller clubs are left on the sidelines. This creates large discrepancies in revenue generation between clubs in the same league, says BTG.
New league in Brazil
In the report, BTG once again defends the need to create a new league in Brazil. In the bank’s opinion, the country’s soccer industry still needs to improve its revenue generation potential, financial sustainability and competitiveness.
BTG believes that the creation of a new Brazilian football league, following the European model, could increase revenues and reduce the disparity between clubs.
Expenses with broadcasts on TV channels, streaming platforms and other media vehicles end up consuming part of the clubs’ revenue, generating worse income distribution among teams.
With the creation of a new league, the teams could negotiate the broadcasting rights in a package, increasing the bargaining power and, consequently, the distribution of revenue for each club.
“In addition, in a football league model, the better distribution of revenues allows smaller clubs to invest more in infrastructure and employees,” says the bank, in a report released in April.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
