Football tournaments: The battle for the revenues - Club football vs. the FIFA World Cup Harry Arne Solberg Trondheim Business School, Norway

Motivation Conflicting interests between Europe and other continents Africa/Asia/Carribean supporting Blatter Europe wants to get rid of him Comparison of patterns in Club Cootball and FIFA revenues

Some patterns: Media rights the dominating revenue for those at the top of the value chain (tabs) Club football: The “Big-five” more dominating than ever before Revenues from exporting TV football increasing Displacing domestic football in the importing nations? FIFA revenues equally distributed (development programmes)

Total revenues (€-million) 2013/14 Media rights: percentage of total English Premier League % Germany Bundesliga % Spanish La Liga % Italien Serie A % France Ligue % Netherlands Eresdivisie43918% Belgium Jupiler League28429% Austrian Bundesliga 16118% Denmark Super League 14918% Scottish Premier League 14731% Swedish Allsvenskan* 13316%

Media rights: Europe464 (46%)589 (45%)1289 (54%)1167 (48%) Asia / North Africa South / Central America North America / Caribbean Rest of the World7254 Total media rights: FIFA total revenues FIFA revenues and sources

Media rights – Big 5: From Domestic / International markets (€- mill.) Period 1Period 2Period 3Period 4 England 800 / 311 (72% / 28%) 796 / 591 (57% / 43%) 1299 / 908 (59% / 41%) 2211 / n.c. - Spain 435 / 65 (85% / 15%) 471 / 123 (74% / 26%) 532 / 235 (75% / 31%) n.c. / Italy 793 / 70 (91% / 9%) 817 / 91 (89% / 11%) 858 / 117 (88% / 12%) 1150 / 215 (84% / 16%) France 642 / 8 (99% /1%) 668 / 17 (97% / 3%) 607 / 33 (95% / 5%) 727 / 80 (91%/ 9%) Germany320 / 18 (94 % / 6%) 322 / 53 (85% / 14%) 470 / 71 (83% / 13%) 534 / 160 (77% / 23%)

The spendings on media rights from big- five as percentage of domestic leagues

Asian Markets Malaysia900% India800% Thailand700% Korea300% Japan100% South America Latin America21% Top-5 European markets France16% Italy2,7% Germany1,3% Spain1,3% UK1,2% Other European markets Nordics77% Holland70% Greece39% Belgium22% Turkey5%

The revenue of the average club compared to an average club in Premier League and Bundesliga English Premier LeagueGerman Bundesliga Netherlands12%19% Belgium9%14% Austria8%13% Denmark6%10% Scotland6%10% Sweden4%6%

Why? Technology innovations in media => increased capacity Economies of scale advantages Low transmission costs High degree of sunk costs in production of live sport Favourable for those that have the products of best quality – which in club football are the “big-five” Market forces “ruling” in club football

National team tournaments Democracy: One nation – one vote Not transparent Distribution of FIFA funds favouring the poor members Financial assistance programme: Equal distribution Goal project: Favouring low income members The majority of FIFA members have low revenues The Media Voter Theorem

Media voter theorem applied on the distribution of FIFA revenues Preferences Subsidising poor nations Equal distribtion Unequal distribution More unequal distribution Market-forces distribute VoterMedian voter in FIFA = somewhere here

Summary Two different distribution models Market forces distribute the revenues in club football Democracy, in national team tournaments (such as FIFA World Cup)