Lega Serie A – Behind the breakaway: Part two

For Part one of Football Italiano’s report on the new breakaway Serie A, go here.

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In July 2007, Giovanna Melandri, at the time Italy’s Minister for Youth and Sports, passed a law that insisted the Lega Calcio had sales ownership of the TV rights for Italy’s top division, and that they were now responsible for selling a collective TV deal, starting in the 2010/11 season (when current TV deals expired). This law had therefore put an end to individual selling by each team. In addition, they also became responsible for defining the solidarity contribution – that is, the percentage of the revenue from the collective sale that is handed down to Serie B and the Lega Pro teams, the figure of which must be no less than 10%.

Such power afforded to the Lega Calcio in defining contributions to the lower leagues angered the Serie A members, who before had a large say in this decision, and thus a degree of control over how much of their income was to be diverted elsewhere (it was, after all, proportional to each club’s TV deal). The big clubs knew the change to collective selling would see a reduction in their domestic broadcasting revenues, and with no control over how much they would be handing down to the lower leagues, they stood to lose out substantially. So in 2008 they outlined a proposal which would see the Serie A clubs take over the role of the Lega Calcio in defining the solidarity contribution (amongst other commercially driven aspects of the league). The remaining Serie A outfits, having finally reached the situation of collective selling they had long desired, were now more than happy to back the driving forces behind the proposal – the amount they received from TV income was going to increase with the change to collective selling, so they saw no harm in backing moves to get that little bit more.

Unfortunately, the selfish mindset of those at the summit of Calcio hindered their ability to see the potential damage such a move could cause to Serie B and clubs lower down, because by pushing for more they were reducing the income that these teams would receive – an unwanted event due to the poor level of revenue earned through their own TV deal. Unlike Serie A, the Serie B TV deal is sold collectively. In 2005/06, this was worth €20m, which had to be split between 22 clubs. They did not even have a deal for the 2007/08 season, and a contract was only drawn up days before the start of the 2008/09 campaign. Regardless of whether it is in place or not, that TV deal is not worth anywhere near enough money to keep Serie B clubs in business. In short, they are totally dependent on the top division, and even with their support it is a massive struggle – the clubs lost an average of around €6m in 2008/09 even with the handout from Serie A.

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Understanding the implications it would have on their future, the Serie B clubs refused to countenance the idea of Serie A dictating the solidarity contribution. With the league’s governing body maintaining their position, and the two divisions refusing to budge, Serie A voted to break away from the Lega Calcio completely on April 30, 2009 – with 19 out of the 20 clubs in favour. Only Lecce, who at the time were 19th in the table, three points away escaping the relegation zone (they did eventually drop to the second tier), did not support the move, although ironically they will be one of the clubs who benefit from the new league having been promoted again last season. A new independent governing body was announced, the Lega Serie A, and on July 1, 2010 (the date when the league became operational) the Lega Calcio officially folded – the 20 top division clubs are no longer members, and so no longer subject to their regulations. As such, they now have ownership of and are responsible for selling their own TV rights, although not for another two years as the Lega Calcio had already struck a deal with Sky Italia for the collective sale of Serie A live matches worth €1.149bn over two seasons (as well as a €580m deal with Mediaset Premium and Dahlia TV for digital terrestrial packages), long before the split came into effect on July 1, 2010. They do, however, have control over this stream of income, and are free to decide how much of that money should be paid to Serie B and the lower leagues (if any).

So who gains from this move? The biggest beneficiaries are the medium-to-small Serie A clubs, who will see their TV revenues rise dramatically from the collective sale. The big clubs will still lose out, because their share from a collective deal will not be as great as the amount they were used to earning from the individual TV deals of the past. However, control over the distribution of monies to Serie B will partially offset this blow, as they can now reduce this sum to a figure far below what they were expecting the Lega Calcio to define.

Serie B is the huge loser, but it would be a surprise if the top tier decided to withdraw financial support to the league altogether. Even they realise the damage it could cause to the football structure in Italy, and it would open a can of legal worms that could see Serie B clubs attempt to take their top-flight counterparts to court for loss of income, but any possible handout is unlikely to be anywhere near the €90m that they were reportedly demanding as a solidarity contribution.

Lega Calcio Serie A – Behind the breakaway

Part one

Part two

Part three

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