Independence: Bad Business for Catalonia.

Barça as metaphor: Independence would be an absolutely economic disaster.

  

Are you one of the massive Spanish League "La Liga" fans? What would you think about a Catalonia League? Could be interesting for you?

Nowadays Barça it is one of the most admired squads in the world. It is the dominator of last decade in Spanish League and has won three European championships in this century. But there is an unexpected trouble in the horizon. A virtual independence of Catalonia (still remote) would convert this powerful squad and this thriving business into a european small size team, champion of a marginal league.

Football Clubs have four main revenue streams:

  1.       Incomes for Season Tickets and Single Match Tickets.

  2.      Television broadcasting rights.

  3.      Incomes for Champions League.

  4.      Marketing, publicity, selling of shirts.

2011-2012 FC Barcelona Incomes

2011-2012 FC Barcelona Expenditures

    

  1.      Incomes for Season Tickets and Single Match Tickets.

In the season 2011-12, Barça entered €128,5 million. Even the most loyal supporter would not pay the same to see Real Madrid, Valencia, Sevilla, Atlético Madrid, Athletic Bilbao, Deportivo de La Coruña, etc, than to see Girona, Nástic, Sabadell and other neighborhood teams. It is very conservative say that the prices have to bring down 10%, and the average home attendances to the stadium will also be lower by 10%.

So in a very very very favorable case, incomes will be €104 million.

  2.     Television broadcasting rights.

Barça and Madrid receive each €135 million per year due to La Liga broadcasting rights. How much can Barça receive for the Catalonia League? From a national market of 47 million people to 7 million. Looking the Catalan’s teams in the Spanish football tiers, they can conform a league of two teams from the actual 1^st tier. Two teams from the 2^nd. 7 from the 3^rd, and to complete a small league of 18 teams, another 7 from the 4^th tier. Can you imagine Messi playing in 11 stadiums of less than 10,000 capacity? Me neither.

So, if Spanish League generates €617,5 million, it has sense and being very generous again, that Catalonia league would generate 20%, €123 million. With a deal of Barça 50%, Espanyol 30%, and all the other teams 20%, Barça would receive €62 million.

	Team	Season Ticket Holders	Stadium Capacity	Current Division
1	FC Barcelona	86.314	98.772	1st Tier
2	RCD Espanyol	32.000	40.500
3	Girona FC	6.000	9.500	2nd Tier
4	CE Sabadell FC	4.000	18.000
5	Lleida Esportiu	-	13.500	3rd Tier
6	CE L'Hospitalet	800	6.740
7	UE Sant Andreu	2.000	15.000
8	CF Reus Deportiu	800	4.847
9	AE Prat	400	1.000
10	Club Gimnástic	7.000	12.000
11	CF Badalona	3.000	10.000
12	UE Olot	-	2.000	4th Tier
13	UE Cornellá	500	1.500
14	CE Europa	1.200	7.000
15	UE Rubí	-	6.500
16	AEC Manlleu	750	3.000
17	UE Figueres	700	9.500
18	FC Santboiá	1.000	2.500

2011-2013 CL Incomes

  3.     Incomes for Champios League.

Let’s suppose that Barcelona will be in the semifinals of Champions League every year, they will earn €22.1 million. What we can assert is that the Market Pool will decrease significantly. Probably like the Scottish Premier League level (€10 million).

  4.      Marketing, publicity, selling of shirts.

The rest of Spain is the principal market for Barça products. It is assumed that Spanish will stop liking the main team of an independent Catalonia. In addition, a less attractive league against small teams will be less interesting for foreigners, and even for the own Catalonians. Let’s be generous again, and say that this only produces a fall of 20%, from €167 million to €134 million.

Conclusions:

1.       FC Barcelona Incomes first year since independence would be:

Tickets €104 + Television Broadcasting Rights €74 (Catalonia + Champions League) + Incomes CL €22 +Marketing €134 + Others €10 = €344 million.

2.      Expenditures of year 2011-2012 were €494 million, most of them salaries of players. Net debt for a hypothetical year 1 since independence, would be €150 million.

3.      Net debt this season 2012-2013 is €334 million. Increasing in short term by €150 million per year.

4.      This is a short term analysis. Effects in long term would be devastating. I just can’t imagine Messi, Iniesta, etc playing in these 4^th tier stadiums, even if Barça could afford their salaries by waving a magic wand.

5.      It would be harder every year to hold good players with the new low salaries, and would be harder to reach to the CL semifinal, so money from CL and from Marketing would be lower and lower.

6.      Effects for Spanish League would be deep, but not as dramatic. National market would be 40 million people, with traditional teams like Real Madrid, Atlético, Valencia, Sevilla, Betis, Athletic Bilbao, Deportivo de La Coruña, Mallorca, Real Oviedo…

7.      Football is a metaphor about the situation of Catalonia and the rest of Spain after independence. Catalonia has its biggest market in Spain, followed at a distance by European Union. The first consequence of independence is the rejection from the EU (in the same way as the expulsion from La Liga). Their products will be hardly sold in Spain and Europe, with the consequent economic disaster, and the bankrupt of a region with high debts (as the case of FC Barcelona). All without the social and political impact of fracturing a region with at least half of its population feeling like they are part of Spain in some way. My advice: think twice. 

  

More info:

http://www.futbolme.com/col/index_equipo.asp?modo_e=2&id_equipo=732&id_torneo=5

http://www.fcbarcelona.es/club/detalle/noticia/aprobadas-las-cuentas-2011-12

http://www.marca.com/2011/09/02/futbol/1adivision/1314948704.html