Presentación final sports economics


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Slides for the presentation of the Sports Economics class in the Copenhagen Business School, corresponding to the Workshop 3 Question 7.

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Presentación final sports economics

  1. 1. Workshop 3 Q7: Group B7 Marta Gómez-Guadalupe Izaguirre AnaEpalzaDiaz-Guardamino FélixBrezoFernández Peter Karsten Munch Christensen MadsØstrupChristensen
  2. 2. Is it possible in Europe to introduce the Financial fair play principles?
  3. 3. Even with the money earned from the Champions League, clubs still overspend. Right now, the debts between the clubs within the top leagues of England, Spain, Italy, Germany, and Franceis: 5.5 billion Euros
  4. 4. Financial fair play: Turn the dirty and relatively hidden debts into a clean balance in which youonly spend as much as you earn. If you don’t do it, you won’t get to play in European competitions. Theplanshavealreadybeenaproved. Underthe new rules, any club thatspends more thanitearnswouldbebarredfromEuropeancompetition.
  5. 5. MICHAEL PLATINI’s PLAN: no deficit by 2017
  6. 6. What counts as deficit? Building a new stadium, or investing in youth academies. Building a new stadium, or investing in youth academies. Buying players and paying their wages.
  7. 7. The amounts of money that clubs earn from the Champions League and the Europe League are incredible. This past season there were 746.4 million Euros distributed to clubs taking part in the Champions League.
  8. 8. PROS Faircompetition Control of earnings and spendings Leverageonwages
  9. 9. CONS Unrealisticplans Notplanying? Whatwill happenwith fans?
  10. 10. Discuss some expectable pro´s and con´s from major stakeholders.
  11. 11. Who are thestakeholders? Players Local businesses Media Owners Fans Coaches
  12. 12. Owners Therewillnotbeunfaircompetition Great wealth would not undermine the competition
  13. 13. Local business Withoutrisk of disappearance, they willstillhaveincomesthematchdays
  14. 14. Players/coaches Wages would decrease: the clubs will not be able to cope with such high costs
  15. 15. Media More teamsfightingforthetitle Matcheswillbe more exciting Audiencemaypaylessattentiontonowadays ‘superteams’ games
  16. 16. Fans Risk of club disappearance decreases More spread victories Big teamsupporters couldbedisappointed
  17. 17. Is The European Leagues ready to apply financial fair play, maximum players salaries and other similar “American diseases”?
  18. 18. Themainstartingpointis: are thesemeasuresnecessary?
  19. 19. We can take a look tothewealthiestteams in termsof revenue…
  20. 20. Real Madrid andFCBarcelonaareTop 2 in Europe in terms of revenue (mill. €)
  21. 21. Can yourememberlastseason’s classification in theSpanish “La Liga”?
  22. 22. There is a difference of 25 pointsbetweenthe top2 and the 3rd in the table…
  23. 23. Thisyear’strendisthesame…
  24. 24. Almost 2 matches in 13 gamesplayed…
  25. 25. Anotherstat: maximum scorersin the league are…
  26. 26. Messi: Cristiano: 15 goals 16 goals
  27. 27. Noteveryoneiscompetingusing thesameresources!
  28. 28. Whatshouldbe done tofacethisproblem?
  29. 29. Balancingtherevenuesto boostenthetrue product…
  30. 30. 74% of revenues includingmedia and mechandising
  31. 31. In some countries TV rights are negotiated separately…
  32. 32. TV revenues in million € byteam / league
  33. 33. Tocreate a strongcompetition, clubs shouldthink as a whole
  34. 34. Is it of any significance, that a national league makes a profit or is not too unprofitable?
  35. 35. 4. Is it of any significance, that a national league makes a profit or is not too unprofitable? EU Maybe Structure of the league US Yes Structure of the league
  36. 36. Explain individually for the major leagues the different trends and why you think Broadcasting and foreign investors have become such an important aspect?
  37. 37. Q7.5 England Divides half of the revenues amongst the clubs The League with the highest broadcasting revenues Looking to increase their revenue by 70%, benefiting all the clubs, over the next three years
  38. 38. Q7.5 Spain Barcelona and Real Madrid are the two top money league clubs Accounts for most of the broadcasting revenues in Spain Are looking at a large increase in broadcasting revenues Able to negotiate their own (TV) deals.
  39. 39. Q7.5 Italy Able to negotiate individually More competition amongst television- broadcasters Must Pay 19% of a negotiation to the other clubs Typically Italia, everything is uncertain at the moment, do to political pressure for redistribution
  40. 40. Q7.5 Germany 40 % increase Redistribution among the clubs More money to the top clubs Earns less money then the top money league clubs Are dependent on money from Champions League and Commercial rights Has one of the highest match day attendance
  41. 41. Q7.5 France New Deal (Canal Plus) 60% money increase
  42. 42. Q7.5 The foreign legion A trend of higher earnings (Commercial, tv broadcast, Sponsor) Needs to control wages. “A Billionaires playground” Revenues is seen as a good incentive to invest, even though wages are astronomical (This report is made prior to the financial crisis!)
  43. 43. Comment on the article in the upload “Balancing the books SB 2010-08”.
  44. 44. Q7.6 Sponership League sponsorship Sponsorships come from all kinds of places (including the public). Clubs need to activate their sponsorship better Recognition rate to low