{"id":633903,"date":"2018-11-06T00:00:00","date_gmt":"2018-11-05T23:00:00","guid":{"rendered":"https:\/\/www.ie.edu\/insights\/latest-news\/articles\/soccer-or-netflix-our-conversation-with-the-president-of-laliga\/"},"modified":"2019-11-21T13:21:07","modified_gmt":"2019-11-21T12:21:07","slug":"soccer-or-netflix-our-conversation-with-the-president-of-laliga","status":"publish","type":"articles","link":"https:\/\/www.ie.edu\/insights\/articles\/soccer-or-netflix-our-conversation-with-the-president-of-laliga\/","title":{"rendered":"Soccer or Netflix? Our Conversation with the President of LaLiga"},"featured_media":636272,"template":"","meta":{"_has_post_settings":[]},"schools":[],"areas":[16,22,24],"subjects":[],"class_list":["post-633903","articles","type-articles","status-publish","has-post-thumbnail","hentry","areas-competitiveness-growth","areas-sales-marketing","areas-strategy"],"custom-fields":{"wpcf-article-leadin":["In professional soccer, there is a competition that extends well beyond the playing field. It is the ongoing battle to reach the greatest number of viewers with the optimal user experience. The sport competes with other major players in the increasingly global\u2014and digital\u2014leisure and entertainment industry. La Liga, the Spanish soccer league, is no stranger to this challenge. Javier Tebas, President of the association of professional soccer clubs in Spain, discusses his strategy with Juan Jos\u00e9 G\u00fcemes, President of the Center for Entrepreneurship and Innovation at IE University."],"wpcf-article-body":["Whenever people talk about numbers in soccer, they\u2019re usually referring to the money being spent on signing players. However, this sector of the leisure and entertainment industry has an enormous impact on the economy and its own set of competitive<\/a> challenges to deal with.\r\n\r\n \r\n\r\nJuan Jos\u00e9 G\u00fcemes:<\/strong> Javier, people are passionate about soccer. As a sport, it\u2019s capable of mobilizing cities and entire countries. It\u2019s also a major industry that creates wealth and employment.<\/span>\r\n\r\nJavier Tebas:<\/strong> That\u2019s right. It is a major industry. Just look at the impact that professional football has on the Spanish economy. According to a study by KPMG, it currently represents 1.07% of the country\u2019s GDP (data for the current 2018-2019 season), and is expected to reach 1.20% by 2020. This includes the 42 clubs and companies in the First and Second Divisions, which overall will contribute \u20ac1.3 billion for the 2018-2019 season and \u20ac1.5 billion for the 2019-2020 season. It also has a major impact on employment, with more than 230,000 direct and indirect jobs.\r\n\r\n \r\n\r\nJuan Jos\u00e9 G\u00fcemes:<\/strong> Those are definitely some impressive numbers. Much of the industry is managed in each country through entities like the one you preside over. What exactly are your responsibilities?<\/span>\r\n\r\nJavier Tebas:<\/strong> LaLiga is a private and regulatory business association. We are responsible for organizing the competition, managing players\u2019 licenses, monitoring the clubs\u2019 activities in the economic and social realm. And, since 2015, managing the clubs\u2019 most important asset\u2014their broadcasting rights. This is a big challenge, since it represents 40-95% of the clubs\u2019 income.\r\n
We have clear objectives: create more value, increase the number of followers, create business opportunities for the clubs, and strengthen our position as leaders in the entertainment industry.<\/blockquote>\r\nJuan Jos\u00e9 G\u00fcemes:<\/strong> LaLiga\u2019s competition for the television audience is increasingly global<\/a>. It\u2019s not just the other soccer leagues and different sports out there, but also non-sports-related content.<\/span>\r\n\r\nJavier Tebas:<\/strong> That\u2019s right. We have to compete for the viewer\u2019s time like any other business within the global<\/a> leisure and entertainment industry. And there are some very powerful competitors in this space. Like you said, it\u2019s not just within the sport itself. Our competition is everything from the Premier League to the NBA, Netflix and HBO. It\u2019s also the consumer who decides each month which of these options they\u2019re going to spend their leisure time and money on.\r\n\r\nIn the 2016-2017 season, according to the latest data, LaLiga had a net revenue of \u20ac2.9 billion per year, second only to the Premier League. As a sport, we are the number one league in the world. But economically, despite narrowing the gap with the Premier League, we still have a way to go.\r\n\r\nThe reason the Premier League is so far ahead is the revenue it gets from broadcasting rights. To qualify that, we should take into account the difference in population. The United Kingdom has 77 million inhabitants versus 44 million in Spain. So, it has an advantage over us in the local market. Then there\u2019s the difference in per capita income ($28,100 in Spain compared to $39,700 in the UK).\r\n\r\nAnother key factor is the penetration of pay television, which in this business is vital to reach fans around the world. The Premier League also has a considerably higher penetration rate for pay television, with 69% compared to 36% in Spain.\r\n\r\n \r\n\r\nJuan Jos\u00e9 G\u00fcemes:<\/strong> Therefore, your growth<\/a> strategy<\/a> revolves largely around the global<\/a> market. What markets are you focusing on?<\/span>\r\n\r\nJavier Tebas:<\/strong> That\u2019s right. Unless we increase the population, we\u2019ll need to work on our international strategy<\/a>. So, that\u2019s what we\u2019ve been doing. We might just be the top sector for goods and services in terms of highest net profits on exports. With an investment of \u20ac35 million, we can bring in around \u20ac1 billion.\r\n\r\nLaLiga is stronger in Latin America, but the Premier League is ahead in the Asian and Southeast Asian markets. We\u2019re also working hard in Africa and India.\r\n\r\nWe\u2019re developing what we call our \u201cglocal\u201d strategy<\/a>. We have 9 physical offices around the world and 45 international delegates in 43 strategic destinations to enhance our presence in these markets.\r\n\r\nWe\u2019ve also brought in talent<\/a> from leading digital companies like Facebook and Netflix, which demonstrates our commitment to this aspect.\r\n\r\nWe have clear objectives: create more value, increase the number of followers, create business opportunities for the clubs, and strengthen our position as leaders in the entertainment industry.\r\n
As a sport, we are the number one league in the world. But economically, despite narrowing the gap with the Premier League, we still have a way to go.<\/blockquote>\r\nJuan Jos\u00e9 G\u00fcemes:<\/strong> Facing the challenge you describe obviously requires developing digital capabilities. What technologies<\/a> you are primarily leveraging?<\/span>\r\n\r\nJavier Tebas:<\/strong> Data is key to our growth<\/a> strategy<\/a>. That\u2019s why we created the Business Intelligence & Analytics department. Think about this: We have millions of users and we need to have the same level of knowledge about their behavior<\/a> as Netflix or HBO, who know everything about their consumption patterns. We\u2019re also heavily leveraging social media and we\u2019re adding a client search engine that, along with geolocation, will allow us to determine where the clubs can have the greatest potential.\r\n\r\n \r\n\r\nJuan Jos\u00e9 G\u00fcemes:<\/strong> The way we watch television is changing. How is this affecting the soccer industry?<\/span>\r\n\r\nJavier Tebas:<\/strong> Right now, around 6% of the revenue from the broadcasting market comes from OTT (over-the-top) platforms, and the remaining 94% comes from the traditional pay TV model. The studies we\u2019ve seen project that by 2023 approximately 35% of the revenue will come from OTT channels. So, at LaLiga we\u2019re working to adapt to this new paradigm.\r\n\r\n \r\n\r\n\u00a9 IE Insights."],"wpcf-article-extract-enable":["1"],"wpcf-article-extract":["Conversation between Juan Jos\u00e9 G\u00fcemes<\/strong> and Javier Tebas<\/strong>. In professional soccer, there is a competition that extends well beyond the playing field. It is the ongoing battle to reach the greatest number of viewers with the optimal user experience."],"wpcf-article-summary-enable":["1"],"wpcf-article-summary":["Soccer is one of the most followed sports around the world. The games are followed by millions of fans, which means the industry faces another major competition: to create the optimal user experience by competing against huge companies in the leisure and entertainment industry. In this conversation with Juan Jos\u00e9 G\u00fcemes, President of the Center for Entrepreneurship and Innovation at IE University, Javier Tebas, President of LaLiga, Spain\u2019s professional soccer league, reflects on two of the greatest challenges facing the industry: Managing broadcasting rights and creating a value proposition in the world of entertainment that attracts millions of viewers around the globe."]},"_links":{"self":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles\/633903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/types\/articles"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media\/636272"}],"wp:attachment":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media?parent=633903"}],"wp:term":[{"taxonomy":"schools","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/schools?post=633903"},{"taxonomy":"areas","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/areas?post=633903"},{"taxonomy":"subjects","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/subjects?post=633903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}