If U2 could play in India, so can a Barca or a Real: LaLiga India MD

Jose Antonio Cachaza on the rise of India as a market for the Spanish league and how it's looking to recover from the Covid-induced losses

Kathakali Chanda
Published: Jan 4, 2021 02:22:57 PM IST
Updated: Jan 4, 2021 05:01:26 PM IST

I've been a journalist for over a decade, working across newspapers and magazines. At Forbes India, I write and edit stories on varied themes. I am a sports buff — turning to the back pages of the newspaper first— and keenly follow current affairs, pop culture and new trends at the intersection of politics, business and culture. Being an inveterate foodie, I often end up writing about it.

opening_bgValencia's Serbian midfielder Uros Racic (L) vies with Barcelona's Argentinian forward Lionel Messi during the Spanish league football match between FC Barcelona and Valencia CF at the Camp Nou stadium in Barcelona; Image:LLUIS GENE / AFP

How has the new season beginning September panned out amid the pandemic and how has it impacted revenues?

The pandemic has impacted everything, not just revenues but also the look and feel of the game. For the footballers, it's quite weird to be playing in an empty stadium. Economically, clubs lost everything related to match-day revenues and all other associated revenues such as stadium tours, museum visits etc. The smaller clubs get a bigger share of their income from broadcast rights, some of them up to 85 or 90 percent. For them, the loss of match-day revenues is minimal. But to the bigger clubs, these losses can go up to 30 to 35 percent. 

As a league, we aren't going to be happy till the fans are back in the stadium. But we are satisfied we were able to resume the competition during the summer, and the current season, too, has been going well. Considering the situation around us, we’ve had minimal disruptions. If we weren't able to finish last season, the impact would be around 1 billion euros cumulatively for the clubs as well as LaLiga as an organisation. 

How is the league planning to recover the losses? When can you go back to pre-Covid levels?

We are working closely with Spain's ministries of sports and health to bring fans back to the stadium. It will probably be an incremental approach. There was a meeting last week and there will be meetings in early January to review the situation. But it's highly improbable that you'll see 100 percent capacity in stadiums in the current season.

As far as recovering revenues goes, that's a difficult answer. For that, you need to bring back match-day as well as its associated revenues. Till that is done, clubs have no other option but to cut down expenses. A couple of weeks ago, we came out with salary caps imposed on every first- and second-division club, lowering squad cost limits in 2020-21 by 22 percent (650 million euros) compared to the previous season. For example, Barca has had to undergo a 41 percent cut, while for Real Madrid it’s 27 percent. These are big numbers. The LaLiga clubs have also reduced spending by 66 percent for player transfer this season (but this parameter can vary greatly between seasons).

Realistically, when are you expecting fans back? 

If it is in phases, probably really soon. Maybe in one month or so, we could have a really small number of people in the stands. I don't feel things will be close to normal until next season, which is till the second half of 2021. 

You’ve read in the media that [Lionel] Messi has said playing in empty stadiums without fans is horrible. But the players are professionals and they also realise that playing behind closed doors is a way of keeping the business rolling. Yes, you have to suffer the big losses associated with match revenues but by playing you are at least able to preserve two important sources of revenue that account for anything between 65 and 80 percent of earnings: Broadcast rights and commercial rights like sponsorship etc.

la liga bg

How has LaLiga engaged with the fans during the pandemic?

In the first couple of weeks, we were completely lost, we didn’t know what the hell happened. Then, we began to keep in touch with our fans via both social and traditional media through competitions, online benefit shows, granting access to legends and top management to the media all over the world etc. We realised this had to be part of our strategy—there was no football, but we needed to remind our fans that we existed. 

Some of the biggest impacts during the year was through events. For example, we did a benefit show with Spanish stars, including Shakira (she's Colombian but married to FC Barcelona player Gerard Piqué). The impact of this in India was one of the highest.  

In India, since March 15 when LaLiga was suspended due to the pandemic, we have seen a 461 percent rise in the number of impressions per post on Facebook (LaLiga’s exclusive broadcast partners in India) and a 117 percent increase in engagement per post.  

Where does India rank as a market for LaLiga?

Economically, India for us is a future market, more than a present-day one. Although we are teaming with local corporates such as BKT Tires and Dream11 and have roped in Rohit Sharma as a brand ambassador in India (and the first non-cricket global brand ambassador for LaLiga), the volume of the Indian professional sports market, while it's growing, is still small compared to that of China or the US.

However, if you use the parameters of digital/social media, we have almost 5 million followers in India, which makes it the second highest after, curiously enough, Bangladesh. In fact, the Indian subcontinent accounts for 10 percent of overall social media followers for LaLiga, 5 percent of which is from India alone. Five years ago, we had 300,000 followers from India. So, that’s some growth. The idea is to keep growing this digital relationship and, as soon as circumstances allow us, to go back to face-to-face interactions, bringing fans closer by doing public screening of games, like we had done for the El Clasico [FC Barcelona vs Real Madrid matches] in Delhi, Mumbai and Kolkata, and bringing a LaLiga team to play in India.

Can we expect to see a Barca or a Real Madrid coming to play in India?

They will, but what I can’t say is when. Would you have even thought five years ago that U2 would come to give a full show in India, as they did in 2019? Probably not. But 42,000 fans turned up and paid a lot of money that made it viable for the promoters. If you can bring U2 to India, you can also bring a Real or Barca as well. The only thing is that it’s much easier to organise a music tour than a football tour because the dates are limited. But we’ll manage to do that. It may not be in the next two to three years, but eventually they'll come. 

Since 2018, Facebook has been your exclusive broadcast partner in India. Do you think the balance of power in the broadcast ecosystem is slowly shifting from TV channels to OTT platforms?

It’s changing, without doubt. You can no longer look at traditional broadcasters. Look at cricket. You can't understand Star without Disney+Hotstar, or Sony without SonyLiv. Also, if I'm not wrong, most of the growth that Star got from the last IPL came almost exclusively from its digital platform. That tells you a story. We are going into a more complex environment where, at least for a while, digital will lead the way ahead of traditional channels. Will we forget our traditional satellite channels in the process? I don't know. But clearly the balance has shifted and there are new entrants into the market. 

How has the new season beginning September panned out amid the pandemic and how has it impacted revenues?
The pandemic has impacted everything, not just revenues but also the look and feel of the game. For the footballers, it's quite weird to be playing in an empty stadium. Economically, clubs lost everything related to match-day revenues and all other associated revenues such as stadium tours, museum visits etc. The smaller clubs get a bigger share of their income from broadcast rights, some of them up to 85 or 90 percent. For them, the loss of match-day revenues is minimal. But to the bigger clubs, these losses can go up to 30 to 35 percent. 
 
As a league, we aren't going to be happy till the fans are back in the stadium. But we are satisfied we were able to resume the competition during the summer, and the current season, too, has been going well. Considering the situation around us, we’ve had minimal disruptions. If we weren't able to finish last season, the impact would be around 1 billion euros cumulatively for the clubs as well as LaLiga as an organisation. 
 
How is the league planning to recover the losses? When can you go back to pre-Covid levels?
We are working closely with Spain's ministries of sports and health to bring fans back to the stadium. It will probably be an incremental approach. There was a meeting last week and there will be meetings in early January to review the situation. But it's highly improbable that you'll see 100 percent capacity in stadiums in the current season.
 
As far as recovering revenues goes, that's a difficult answer. For that, you need to bring back match-day as well as its associated revenues. Till that is done, clubs have no other option but to cut down expenses. A couple of weeks ago, we came out with salary caps imposed on every first- and second-division club, lowering squad cost limits in 2020-21 by 22 percent (650 million euros) compared to the previous season. For example, Barca has had to undergo a 41 percent cut, while for Real Madrid it’s 27 percent. These are big numbers. The LaLiga clubs have also reduced spending by 66 percent for player transfer this season (but this parameter can vary greatly between seasons).
 
Realistically, when are you expecting fans back? 
If it is in phases, probably really soon. Maybe in one month or so, we could have a really small number of people in the stands. I don't feel things will be close to normal until next season, which is till the second half of 2021. 
 
You’ve read in the media that [Lionel] Messi has said playing in empty stadiums without fans is horrible. But the players are professionals and they also realise that playing behind closed doors is a way of keeping the business rolling. Yes, you have to suffer the big losses associated with match revenues but by playing you are at least able to preserve two important sources of revenue that account for anything between 65 and 80 percent of earnings: Broadcast rights and commercial rights like sponsorship etc.
 
How has LaLiga engaged with the fans during the pandemic?
In the first couple of weeks, we were completely lost, we didn’t know what the hell happened. Then, we began to keep in touch with our fans via both social and traditional media through competitions, online benefit shows, granting access to legends and top management to the media all over the world etc. We realised this had to be part of our strategy—there was no football, but we needed to remind our fans that we existed. 
 
Some of the biggest impacts during the year was through events. For example, we did a benefit show with Spanish stars, including Shakira (she's Colombian but married to FC Barcelona player Gerard Piqué). The impact of this in India was one of the highest.  

In India, since March 15 when LaLiga was suspended due to the pandemic, we have seen a 461 percent rise in the number of impressions per post on Facebook (LaLiga’s exclusive broadcast partners in India) and a 117 percent increase in engagement per post.  
 
Where does India rank as a market for LaLiga?
Economically, India for us is a future market, more than a present-day one. Although we are teaming with local corporates such as BKT Tires and Dream11 and have roped in Rohit Sharma as a brand ambassador in India (and the first non-cricket global brand ambassador for LaLiga), the volume of the Indian professional sports market, while it's growing, is still small compared to that of China or the US.
 
However, if you use the parameters of digital/social media, we have almost 5 million followers in India, which makes it the second highest after, curiously enough, Bangladesh. In fact, the Indian subcontinent accounts for 10 percent of overall social media followers for LaLiga, 5 percent of which is from India alone. Five years ago, we had 300,000 followers from India. So, that’s some growth. The idea is to keep growing this digital relationship and, as soon as circumstances allow us, to go back to face-to-face interactions, bringing fans closer by doing public screening of games, like we had done for the El Clasico [FC Barcelona vs Real Madrid matches] in Delhi, Mumbai and Kolkata, and bringing a LaLiga team to play in India.
 
Can we expect to see a Barca or a Real Madrid coming to play in India?
They will, but what I can’t say is when. Would you have even thought five years ago that U2 would come to give a full show in India, as they did in 2019? Probably not. But 42,000 fans turned up and paid a lot of money that made it viable for the promoters. If you can bring U2 to India, you can also bring a Real or Barca as well. The only thing is that it’s much easier to organise a music tour than a football tour because the dates are limited. But we’ll manage to do that. It may not be in the next two to three years, but eventually they'll come. 
 
Since 2018, Facebook has been your exclusive broadcast partner in India. Do you think the balance of power in the broadcast ecosystem is slowly shifting from TV channels to OTT platforms?
It’s changing, without doubt. You can no longer look at traditional broadcasters. Look at cricket. You can't understand Star without Disney+Hotstar, or Sony without SonyLiv. Also, if I'm not wrong, most of the growth that Star got from the last IPL came almost exclusively from its digital platform. That tells you a story. We are going into a more complex environment where, at least for a while, digital will lead the way ahead of traditional channels. Will we forget our traditional satellite channels in the process? I don't know. But clearly the balance has shifted and there are new entrants into the market. 

Click here to see Forbes India's comprehensive coverage on the Covid-19 situation and its impact on life, business and the economy‚Äč

Show More
Post Your Comment
Required
Required, will not be published
All comments are moderated
Adrift: The world we passed in 2020
From 'Laxmii' to 'Tiger King', here's your cringe-binge list