Research background:

Chapter 1: Introduction

1. Research background:

Football has a very relevant importance nowadays, it’s the number one sport in the world in terms of fans and practicing, and team have become city ambassadors and big multinationals money making machines. The activity of a football team towards society cannot resume to sports, they have to correspond, what they get from the fans and governments in terms of financial and supporting resources, with CSR programs. As shown, their giving back to the community through CSR takes many and different forms. Our two main field of study will be the English and Spanish football leagues.

The premier league¹

The English top professional league is the Premier League. It is formed from 20 clubs and it operates in a system of promotion and relegations with the football league under it. The Premier League work like a corporation in which the 20 member clubs act as shareholders.

Seasons starts on august and normally ends by may. Each team plays 38 games and the total of games played during the seasons is 380. Most games are played on Saturdays and Sundays, with a few games played during weekday evenings. From 1993 to 2007, the competition was known as the Premiership. Nowadays for commercial reasons, having Barclays Bank as a main sponsor is therefore officially known as the Barclays Premier League.

1 Source Wikipedia

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The premier league was created on 20 February 1992. The 20 teams forming the Football League First Division at that time broke up with The Football League, the league organizers, that was originally founded in 1888, in the seek of better and more lucrative television rights deals.

Currently it is considered to be the number one league in Europe based in the performance of the English teams in the in European competitions over the last five years by Union of European Football Associations (UEFA) coefficients . The second on the list is the Spanish La Liga and German Bundesliga. Worth mention is that the Premier League has the second highest average match attendance records after the German Bundesliga. Since the foundation of the professional football league in England by 1888, a total of 23 clubs have been crowned champions of the English football system. The current champions are

Manchester United, who won the title in the 2010–11 seasons.

The premier League has had a main sponsor figure since 1993. This sponsor was entitled to decide the name of the league. The list of sponsors since it re foundation is:

• 1993–2001: Carling (FA Carling Premiership)

• 2001–2004: Barclaycard (Barclaycard Premiership)

• 2004–2007: Barclays (Barclays Premiership)

• 2007–present: Barclays (Barclays Premier League)

Finances: Premier league financial strength is well known in the football world. As Deloitte Football report confirms the Premier League has the highest revenue of any football league in the world, with total club revenues of €2.479 billion in 2009–10, and is the second most profitable after the German Bundesliga. In 2010 the Premier League was granted the

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Queen's Award for Enterprise in the International Trade category by Her Majesty Queen Elizabeth II. This awards intendeted to thanks the premier League for its important role of developing and sharing the image of Britain overseas as well as fomenting international trade and English economy. Premier League has some of the wealthiest clubs in the world.

As Deloitte revealed in it annually football report, 7 out of the 20 richer football teams in Europe are in England. After the Premier League's new TV deal went into effect, the league-wide increase in revenues is expected to increase the Premier League clubs' standing in the list, and there is a possibility that a Premier League club will be top of the list.

Media coverage: The Premier sold its TV rights collectively, in contrast to the Spanish League and Italian Serie A, where clubs sell their rights individually. The television money is divided into three parts: half is shared equally between the clubs. A quarter is distributed according to the classification of teams at the end of the competition and the remaining quarter is paid based on the TV audiences, with the biggest clubs getting more money to be logically the most audience have. The money paid by foreign television is distributed equally among the 20 teams. The television money has steadily increased. The Football League received £ 6.3 million for four years in 1986, but the contract was renewed in 1988 and the price rose to 44 million for another 4 years. The 1988 negotiations were the first sign of rupture of the League. 10 clubs threatened to leave and create a "super league", but finally were persuaded to stay. The seed was planted the Premier and then, With the creation of the Premier decides to allocate the TV rights to Sky TV. Football faced serious charges. This was a totally new concept that was at first very unpopular with viewers, but the marketing campaign for Sky TV in which football was sold again, with the best players coming now because of the money they had teams of the Premier, showed that the measure

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would be the right one. The business initially was 191 million pounds over 5 years. For the period from 2007 to 2010, SKY and SETANTA SPORTS pay 1.7 billion pounds. Sky paid

£ 1.134 million by offering 92 games and Setanta 392 million to provide 46.

Internationally, the Premier League is particularly popular in Asia, where it is the most widely distributed sports program, especially in India and china. According to the UK tourism body VisitBritain up to 750,000 visitors to United Kingdom also went to a Premier League match in 2010, spending a total £595 million and an average of £766.

La Liga²

The Primera División (First Division) of the Liga Nacional de Fútbol Profesional (LFP), commonly known outside Spain as La Liga (The League) or, for sponsorship reasons, Liga BBVA (BBVA League) since 2008, is the top professional association football division of the Spanish football league system. It is contested by 20 teams, with the three lowest placed teams relegated to the Segunda División and replaced by the top three teams in that division.

A total of 59 teams have competed in La Liga, nine of which have been crowned champions. Since the 1950s, Real Madrid and Barcelona have dominated the championship.

Barcelona has won the last three seasons of La Liga.

La Liga is currently the second strongest league in Europe according to UEFA's league coefficient. La Liga is one of the most popular professional sports leagues in the world, with an average attendance of 28,286 for league matches in the 2009–10 seasons. This is the sixth highest of any domestic professional sports league in the world and the third highest of any professional association football league, behind the German Bundesliga and English Premier League.

2 Source Wikipedia

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Deportivo La Coruña, Hércules from Alicante, and Almería were relegated to the 2011–12 Segunda División after finishing in the bottom three spots of the table at the end of the 2010–11 season. Deportivo were relegated to the Segunda División after 20 seasons of continuous membership in the top football league of Spain, while Almería ended four-year tenure in La Liga and Hércules made their immediate return to the second level.

The three relegated teams were replaced by three 2010–11 Segunda División sides.The second division Champions, Real Betis, and runners-up Rayo Vallecano, earned direct promotion. The third promoted team was decided in the promotion play-offs, where Granada returned to the league for the first time in 35 years, having spent 26 of them in Segunda División B and Tercera División.

Finances: According to the study'' Annual Review of Football Finance'' by professional services firm Deloitte' 2012 the Spanish football league, despite the country economical situation, is the second league in Europe revenues generation after the English Premier League and the third more profitable after the German Bundesliga and the English premier League. According with this data, one could suppose that the Spanish league teams financial heath is robust and that the almost all the team enjoys large and considerable budgets. The reality couldn’t be farther from this assumption. As can be seen in the table 1, Spain has only three teams among the most profitable and money generation teams. One of them is Valencia situated in the 19^th position. The preponderant situation of the Spanish league in the Deloitte rankings comes for the existence in Spain the football colossus, Real Madrid and FC Barcelona, the two football clubs in the world with the largest incomes.

Real Madrid reached last season a turnover of 479.5 million Euros, up 9% from the season

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2009/10, and distributed as follows: 123.6 million Euros in tickets (4% less than last season), 183.5 million for TV rights (16%) and 172.4 million in advertising, sponsorship and merchandising (14%).

These figures consolidated Real Madrid, for the seventh consecutive year as the Football club with higher incomes in the world, standing to one year equal the record of Manchester United, who remained in first place in the ranking between the seasons 1996/97 and 2003/2004.

In the other hand, F.C. Barcelona remains the second football club in the world with more income for the third consecutive year. Its revenue rose 13% to 450.7 million Euros. Only for sold ticked they received 110.7 million (13% more than last season), television rights ascended to 183.7 million (up 3%) and advertising, sponsorships and merchandising 156.3 million (28 % more). The increase in the latter concept is due to the agreement signed with the Qatar Foundation, worth 30 million Euros. Looking ahead to the next edition of the 30 million agreements with three and a half million that is estimated to generate the victory of the FC Barcelona in Club World, can vary for the first time in seven years the leading position of this ranking.

Media Coverage: Spain is the only first world country football where each team negotiates its rights individually. The greater autonomy of clubs leads to disproportionate allocation of money, where the mighty Real Madrid and Barcelona are 140 million Euros each a year and little teams like Levante, Malaga and Real Sociedad are left with 12 million. Between the extremes, survives a middle class composed of Valencia and Atletico Madrid (42 million), Villarreal (25 million) and Seville (24 million). The differences that set the TV

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market, obviously have a determinant influence of much of what happens in the field of play during the season, and that based on the money raised is then assembled templates players.

The absence of a collective bargaining for the sale of television rights to both the Spanish and the rest of the world makes the Spanish teams lose millions of Euros each passing week.

It is risky to quantify how much more could join the club if they sold their rights in England.

Spanish clubs are currently negotiating a collective model for the distribution of La Liga broadcast revenues, potentially from 2015/16. The revenue advantage that

Real and Barca enjoy over their European peers indicates that a more even distribution of La Liga broadcast revenues would not necessarily challenge the two clubs’ dominance at the top of the Money League.